Federal Court Certifies Nationwide Class Action Filed by Psych-Appeal and Zuckerman Spaeder Challenging United Behavioral Health Coverage Criteria

Insurance Weekly News

By a News Reporter-Staff News Editor at Insurance Weekly News -- In a significant mental health ruling, the United States District Court for the Northern District of California has come one step closer to ordering health insurance giant United Behavioral Health (UBH) to revamp its medical necessity criteria and reprocess thousands of outpatient, intensive outpatient and residential treatment claims it denied since 2011. Plaintiffs in two companion class-action lawsuits, Wit et al. v. UnitedHealthcare et al. and Alexander et al. v. United Behavioral Health, allege that UBH systematically denies coverage for mental health treatment by developing and applying "medical necessity" criteria that are far more stringent than generally accepted standards of care.

"Yesterday's class certification order is an important victory in the fight for mental health parity," said Meiram Bendat, president of Psych-Appeal, Inc. and co-counsel for the plaintiffs. "It signals that health insurers can be held responsible, on a class-wide basis, for denying insurance coverage for mental health treatment to those desperately in need. Without class certification, few, if any, patients will have the financial or emotional resources necessary to challenge this type of misconduct individually."

The plaintiffs' health plans, governed by the Employee Retirement Income Security Act (ERISA), require UBH to evaluate medical necessity according to generally accepted standards of care. UBH's proprietary medical necessity criteria purport to reflect these standards. However, the plaintiffs allege that a push for profits has led UBH to develop criteria that overemphasize acute mental health and substance use disorder symptoms and disregard chronic or complex conditions that require ongoing care, in contravention of generally accepted standards.

UBH is a subsidiary of UnitedHealth Group and is the country's largest managed behavioral health care organization, serving more than 60 million members.

Psych-Appeal, Inc. and Zuckerman Spaeder LLP have been appointed class counsel by the federal court and also represent plaintiffs in similar cases against Health Care Service Corporation (Blue Cross and Blue Shield of Illinois, Texas, New Mexico, Montana and Oklahoma), Magellan Health Services of California and Blue Shield of California.