How UnitedHealth's playbook for limiting mental health coverage puts countless Americans' treatment at risk

By Annie Waldman, ProPublica

For years, it was a mystery: Seemingly out of the blue, therapists would feel like they'd tripped some invisible wire and become a target of UnitedHealth Group.

A company representative with the Orwellian title "care advocate" would call and grill them about why they'd seen a patient twice a week or weekly for six months.

In case after case, United would refuse to cover care, leaving patients to pay out-of-pocket or go without it. The severity of their issues seemed not to matter.

Around 2016, government officials began to pry open United's black box. They found that the nation's largest health insurance conglomerate had been using algorithms to identify providers it determined were giving too much therapy and patients it believed were receiving too much; then, the company scrutinized their cases and cut off reimbursements.

By the end of 2021, United's algorithm program had been deemed illegal in three states.

But that has not stopped the company from continuing to police mental health care with arbitrary thresholds and cost-driven targets, ProPublica found, after reviewing what is effectively the company's internal playbook for limiting and cutting therapy expenses. The insurer's strategies are still very much alive, putting countless patients at risk of losing mental health care.

Optum, its subsidiary that manages its mental health coverage, is taking aim at those who give or get "unwarranted" treatment, flagging patients who receive more than 30 sessions in eight months. The insurer estimates its "outlier management" strategy will contribute to savings of up to $52 million, according to company documents.

The company's ability to continue deploying its playbook lays bare a glaring flaw in the way American health insurance companies are overseen.

While the massive insurer — one of the 10 most profitable companies in the world — offers plans to people in every state, it answers to no single regulator.

The federal government oversees the biggest pool: most of the plans that employers sponsor for their workers.

States are responsible for plans that residents buy on the marketplace; they also regulate those funded by the government through Medicaid but run through private insurers.

In essence, more than 50 different state and federal regulatory entities each oversee a slice of United's vast network.

So when a California regulator cited United for its algorithm-driven practice in 2018, its corrective plan applied only to market plans based in California.

When Massachusetts' attorney general forced it to restrict the system in 2020 for one of the largest health plans there, the prosecutor's power ended at the state line.

And when New York's attorney general teamed up with the U.S. Department of Labor on one of the most expansive investigations in history of an insurer's efforts to limit mental health care coverage — one in which they scored a landmark, multimillion-dollar victory against United — none of it made an ounce of difference to the millions whose plans fell outside their purview.

It didn't matter that they were all scrutinizing the insurer for violating the same federal law, one that forbade companies from putting up barriers to mental health coverage that did not exist for physical health coverage.

For United's practices to be curbed, mental health advocates told ProPublica, every single jurisdiction in which it operates would have to successfully bring a case against it.

"It's like playing Whac-A-Mole all the time for regulators," said Lauren Finke, senior director of policy at the mental health advocacy group The Kennedy Forum. The regulatory patchwork benefits insurance companies, she said, "because they can just move their scrutinized practices to other products in different locations."

Now internal documents show that United, through its subsidiary Optum, is targeting plans in other jurisdictions, where its practices have not been curbed. The company is focused on reducing "overutilization" of services for patients covered through its privately contracted Medicaid plans that are overseen by states, according to the internal company records reviewed by ProPublica. These plans cover some of the nation's poorest and most vulnerable patients.

United administers Medicaid plans or benefits in about two dozen states, and for more than 6 million people, according to the most recent federal data from 2022. The division responsible for the company's Medicaid coverage took in $75 billion in revenue last year, a quarter of the total revenue of its health benefits business, UnitedHealthcare.

UnitedHealthcare told ProPublica that the company remains compliant with the terms of its settlement with the New York attorney general and federal regulators. Christine Hauser, a spokesperson for Optum Behavioral Health, said its process for managing health care claims is "an important part of making sure patients get access to safe, effective and affordable treatment." Its programs are compliant with federal laws and ensure "people receive the care they need," she said. One category of reviews is voluntary, she added; it allows providers to opt out and does not result in coverage denials.

ProPublica has spent months tracking the company's efforts to limit mental health costs, reviewing hundreds of pages of internal documents and court records, and interviewing dozens of current and former employees as well as scores of providers in the company's insurance networks.

One therapist in Virginia said she is reeling from the costly repercussions of her review by a care advocate. Another in Oklahoma said she faces ongoing pressure from United for seeing her high-risk patients twice a week.

"There's no real clinical rationale behind this," said Tim Clement, the vice president of federal government affairs at the nonprofit group Mental Health America. "This is pretty much a financial decision."

Former care advocates for the company told ProPublica the same as they described steamrolling providers to boost cost savings.

One said he felt like "a cog in the wheel of insurance greed."

Under ALERT

The year 2008 was supposed to mark a revolution in access to mental health care.

For decades, United and other insurers had been allowed to place hard caps on treatment, like the number of therapy sessions. But after Congress passed the Mental Health Parity and Addiction Equity Act, insurers could no longer set higher copays for behavioral services or more strictly limit how often patients could get them; insurers needed to offer the same access to mental health care as to physical care. The law applied to most plans, regardless of whether federal or state regulators enforced it.

As access to services increased, so did insurers' costs. Company documents show United was keenly aware of this threat to its bottom line.

But there was a loophole: Insurers could still determine what care was medically necessary and appropriate.

Doing so case by case would be expensive and time-consuming. But United already had a tool that could make it easier to spot outliers.

Called ALERT, the algorithmic system was created years earlier to identify patients at risk of suicide or substance use. The company redeployed it to identify therapy overuse.

Company and court filings reveal that ALERT comprised a suite of algorithms — totaling more than 50 at one point — that analyzed clinical and claims data to catch what it considered unusual mental health treatment patterns, flagging up to 15% of the patients receiving outpatient care.

The algorithms could be triggered when care met the company's definition of overly frequent, such as when patients had therapy sessions twice a week for six weeks or more than 20 sessions in six months. Therapists drew scrutiny if they provided services for more than eight hours a day, used the same diagnosis code with most clients or worked on weekends or holidays — even though such work is often necessary with patients in crisis.

The system was originally designed to save lives, said Ed Jones, who co-developed the algorithm program when he worked as an executive at PacifiCare Behavioral Health, which later merged with United. Using ALERT to limit or deny care was "perverting a process that was really pretty good," he told ProPublica.

Once patients or therapists were flagged, care advocates, who were licensed practitioners, would "alert" providers, using intervention scripts to assess whether care was medically necessary. The calls felt like interrogations, therapists told ProPublica, with the predetermined conclusion that their therapy was unnecessary or excessive.

ProPublica spoke with seven former employees from Optum who worked with the ALERT system from 2006 through 2021. They requested not to be named in order to speak freely, some citing fears of retaliation.

Even though the reviews were purportedly intended to identify cases where care was inappropriate or violated clinical standards, several former care advocates said these instances were rare. Instead, they questioned care if it passed an allotted number of sessions.

"It had to be really extreme to help the client be able to continue with the care," said one former care advocate, who was troubled by the practice. "Not everyone with depression is going to be suicidal, but they still need therapy to support them."

The advocates often overruled a provider's expertise, a former team manager said. "There was always this feeling, 'Why are we telling clinicians what to do?'" he said. "I didn't think it was OK that we were making decisions like that for people."

If the advocates found fault with therapists' explanations — or couldn't persuade them to cut back on care — they elevated the case to a peer-to-peer review, where a psychologist could decide to stop covering treatment.

According to court records, regulators alleged United doled out bonuses to care advocates based on productivity, such as the number of cases handled, and pushed workers to reduce care by modifying a therapist's treatment or referring therapists to peer review in 20% of assigned cases.

At one point, care advocates were referring 40%, regulators alleged in court filings. Each peer review tended to last less than 12 minutes, offering providers little time to prove they had a "clear and compelling" reason to continue treatment.

Former advocates described feeling like parts of a machine that couldn't stop churning. "Literally, we had to tell the company when we were going to the restroom," one advocate said, "and so you would do that and come back and your manager would say, 'Well, that was a little long.'"

The former workers told ProPublica they were pressured to keep calls brief; the rush added to the tension as therapists pushed back in anger.

"There was an expiration date on those jobs because there was such a pull on you emotionally," one former care advocate said.

Three of them quit, they told ProPublica, citing damage to their own mental health.

New York and federal regulators started looking into the practice around 2016. A California regulator and the Massachusetts attorney general's office soon followed.

All concluded that while United may not have set official caps on coverage, it had done so in practice by limiting mental health services more stringently than medical care. Therefore, it was breaking the federal parity law.

While California and Massachusetts got United to scale back its use of ALERT within their jurisdictions, New York was able to stretch its reach by teaming up with the U.S. Department of Labor to investigate and sue the insurer. Together, they found that from 2013 through 2020, United had denied claims for more than 34,000 therapy sessions in New York alone, amounting to $8 million in denied care.

By using ALERT to ration care, United calculated that it saved the company about $330 per member each time the program was used, the regulators said in court records. Cut off from therapy, some patients were hospitalized. The regulators did not specifically address in court filings whether the treatment denials met medical guidelines.

The company, which denied the allegations and did not have to admit liability or wrongdoing, agreed to pay more than $4 million in restitution and penalties in 2021. Notably, it also agreed to not use ALERT to limit or deny care.

The final terms of the settlement, however, only applied to plans under New York and federal regulators' jurisdiction.

Rebranded Reviews

In the three years since the settlement, the company has quietly rebranded ALERT.

The Outpatient Care Engagement program continues to use claims and clinical data to identify patients with "higher-than-average intensity and/or frequency of services," according to internal company documents, to ensure "that members are receiving the right level of care at the right time."

Up to 10 percent of cases are flagged for scrutiny, public company documents show. If care advocates take issue with a case, they can elevate it to a peer review, which can result in a denial.

The advocates' script is nearly the same as the one used for ALERT.

Care advocates are even calling therapists from the same phone number.

Overseen by the former director of ALERT, the team's more than 50 care advocates are tasked with ensuring that "outpatient care follows clinical and coverage guidelines" and "reduces overutilization and benefit expense when appropriate," according to company documents.

The team conducts thousands of reviews each month, targeting plans that are mostly regulated by states and fall outside of the jurisdictions of previous sanctions. Patients impacted include workers with fully insured plans and people covered by Medicaid.

Nearly 1 in 3 adults in the Medicaid program has a mental health condition, and a fifth of its members have a substance use disorder. "This is probably disproportionately sweeping up those that are most distressed, most ill and most in need of care," Clement said.

Private insurers that manage Medicaid plans, also known as managed care organizations, are often paid a fixed amount per person, regardless of the frequency or intensity of services used. If they spend less than the state's allotted payment, plans are typically allowed to keep some or all of what remains. Experts, senators and federal investigators have long raised concerns that this model may be incentivizing insurers to limit or deny care.

"They basically manage the benefits to maximize their short-term profit," said David Lloyd, chief policy officer with the mental health advocacy group Inseparable and an expert on state-level mental health parity laws.

State regulators are supposed to be making sure private insurers that manage Medicaid plans are following the mental health parity laws. But this year, a federal audit found that they were failing to do so. "They are not well designed to essentially be watchdogs," Lloyd said. "There's very little accountability. Insurers can run roughshod over them."

The internal records reviewed by ProPublica show the plans and geographic areas now scrutinized by the rebranded program. The team conducts two types of reviews, those considered "consultation" and those that question medical necessity.

For the first kind, the team flags members with high use (more than 30 sessions in eight months) or high frequency (twice-a-week sessions for six weeks or more) to engage their providers in "collaborative" conversations about the treatment plan.

Internal records indicate that the company uses this "consultation" model for about 20 state Medicaid programs, including Washington, Minnesota, Mississippi, Virginia and Tennessee. The company is also deploying the program with Medicaid plans in Massachusetts and, as of the fourth quarter of this year, New York, which are outside of the jurisdiction of the earlier state agreements.

While the Department of Labor does not have jurisdiction over Medicaid, a spokesperson said it "would be concerned about 'consultation' reviews that are conducted in a way that violates [the mental health parity act]." The department did not comment on whether it was investigating the insurer, as a matter of agency policy.

Company records show Optum is applying its more stringent review method, questioning medical necessity, to psychological testing services and a type of therapy to treat children with autism, known as applied behavior analysis, for people with Medicaid coverage in about 20 states. It is doing the same for routine therapy for its members with dual Medicare-Medicaid plans in about 18 states and Washington, D.C. Such plans are largely overseen by the Centers for Medicare & Medicaid Services, the federal agency responsible for overseeing both Medicare and Medicaid programs. While the dual plans are not subject to federal mental health parity laws, a CMS spokesperson said the agency was taking steps to "ensure that people enrolled in these plans have timely access to care."

The internal company records reveal that Optum has continued to use quotas with its medical necessity reviews, setting productivity targets for how many cases its employees scrutinize. According to records from this year, the target was 160 reviews per employee, which the company exceeded with 180 reviews per employee.

Several state agencies that oversee Medicaid programs, including those in New York and Massachusetts, told ProPublica that they follow federal mental health parity laws and have strong monitoring practices to ensure that the private insurers that manage benefits are in compliance.

Katie Pope, a spokesperson for Washington's Health Care Authority, told ProPublica that ALERT was discontinued three years ago but did not directly respond to questions about the current iteration of the program. Scott Peterson, a spokesperson for Minnesota's Human Services Department, said that while United's policies were compliant with federal parity laws, the company's contract would expire at the end of the year. Last May, the state blocked for-profit insurers, like United, from participating in its Medicaid program.

Amy Lawrence, a spokesperson for Tennessee's Medicaid program, said United's outlier review practice entailed "voluntary collaborative conversations on best practices" and did not question the medical necessity of services nor result in denials of treatment. "There are no adverse consequences for providers who elect not to participate," she said.

Mississippi's, Louisiana's and Virginia's state Medicaid agencies did not respond to ProPublica's questions. (Read all state responses.)

In response to ProPublica's questions about its oversight of state Medicaid programs, a spokesperson for CMS said it was "actively engaged with states and other stakeholders to improve compliance and oversight of parity requirements." (Read the full responses of federal agencies.)

Hauser, the spokesperson for Optum, told ProPublica that the company is committed to working with state Medicaid programs to ensure access to effective and necessary care. She said its new program was separate from ALERT, which she said had been discontinued. (She did not explain why the original ALERT program appears to be still operational in Louisiana, according to a recent company manual.) When the team conducts medical necessity reviews, she said, they are compliant with mental health parity law. (Read the company's full response.)

Ringing Phones

Therapists who underwent the reviews told ProPublica that they felt the practice was intended to discourage them from providing necessary care, interfering with their ability to treat their patients.

This year, Oklahoma therapist Jordan Bracht received multiple calls from the team related to the care of two patients, who were both on United's dual Medicare-Medicaid plan. "If we don't hear back from you within a week," a care advocate said in a voice message, "then the case will be forwarded to the peer review process to make a decision based upon the information available."

Both of Bracht's patients had diagnoses of dissociative identity disorder and required therapy twice a week. "Many of my clients are suicidal and would be hospitalized if I had to cut down the care," Bracht told ProPublica.

Reviewers pushed for end dates for their therapy. "They really wanted me to nail down a discharge date," she said. "We are really trying to keep this person alive, and it felt like they were applying their one-size-fits-all model. It doesn't feel right."

Virginia therapist Chanelle Henderson got a voice message in 2022 from the same number about her care of a patient with state Medicaid coverage. "We'd like to complete a clinical review," the caller said. "We'll follow up with one more call before the case is referred to the peer review process."

When Henderson called back, a reviewer informed her that her practice had been flagged for providing longer sessions. Henderson tried to explain they were necessary to treat trauma, her practice's specialty. "She had no trust in me as a clinician," Henderson said of the reviewer.

The inquiry progressed to questions about other patients, including one who was being treated by a therapist under Henderson's supervision. The reviewer said that the company did not cover sessions of supervised therapists at practices with less than 12 therapists. At the time, Henderson's practice had eight.

The reviewer elevated her case, triggering an aggressive audit of the entire practice going back two years that threatened to shut it down.

Citing issues with supervision and longer sessions, United demanded the practice pay back about $20,000 for services it had already provided. Henderson and her business partner pushed back, hiring a biller to help submit hundreds of pages of additional notes and documentation. They also pointed out that during the audit, the company had even changed its policy to allow smaller practices to supervise therapists. United eventually decreased the penalty by half. Neither Optum, United nor Virginia's Medicaid program directly responded to ProPublica's questions about the case.

Bethany Lackey, who co-founded the practice with Henderson, said that the reviews felt like a pretext for additional scrutiny. "It's all set up in order to catch someone doing something so that they can take back payments," she said. "We all know that behind it is this more malicious intent of getting their money back."