June 18th 2024 | Nicole Pastoressa
Edited by Jacqueline Rosenkranz
In 2008, the Mental Health Parity and Addiction Equity Act was ratified, warranting that insurance coverage for mental health conditions— including substance use disorders— should be no more restrictive than insurance coverage for other medical conditions [1]. This federal parity law established the principle that both mental and physical health must receive equal treatment and coverage. However, the act was violated in the class action lawsuit Wit v. United Behavioral Health.
The legal case is named after David and Natasha Wit, the eponymous plaintiffs who challenged the denial of mental health coverage; it was brought to light when Natasha, the daughter of David Wit, sought coverage for treatment at Monte Nido Vista, an eating disorder treatment facility in California. United Behavioral Health (UBH) denied the coverage for Natasha’s treatment from April 2013 forward. The plaintiffs referenced UBH’s Level of Care guidelines that stated, “it is my determination that the member’s treatment does not meet the medical necessity criteria for residential mental health treatment per UBH Level of Care Guidelines for Residential Mental Health Treatment…” [7]. The case also cites that many other individuals faced similar issues as Natasha Wit with denial of treatment from the facility. UBH responded to each patient’s appeal with the same response: “this is the Final Adverse Determination of your internal appeal. All internal appeals through UBH have been exhausted” [7].
UBH, a subsidiary of UnitedHealth Group, was found to have wrongfully denied coverage for mental health and substance use disorder treatment by using overly restrictive guidelines. This restriction of coverage applied to over 50,000 patients, half of whom were children [3]. United Behavioral Health also violated the Employee Retirement Income Security Act (ERISA) by denying benefits based on its guidelines, which were more restrictive than the criteria mandated by state laws [7]. The facility improperly denied mental health services, which it deemed as “not medically necessary.” Ultimately, the United States District Court of Northern California ruled the creation of stricter guidelines as a violation of ERISA. The court also determined that UBH was required to provide coverage that is in accordance with the generally accepted standards of care developed by professional medical and the medical community. It was concluded that UBH’s revised guidelines were created without input from Plan sponsors, and the subsidiary had amended guidelines without the proper authority to do so [7]. Therefore, UBH was required to undergo a reprocessing procedure for up to 67,000 claims for about 50,000 enrollees. Reprocessing is a system that identifies if claims are renegotiable, were paid incorrectly, or not at all [6]. This was initiated in the states of Connecticut, Illinois, Rhode Island, and Texas. The reprocessing was required to adhere to independent clinical guidelines, rather than UBH’s previous, restrictive ones [5].
In response to the order of reprocessing claims, UBH stated that their insurance plan guidelines were never officially required to be consistent with the generally accepted standards of care (GASC). In March 2022, a three-judge panel ruled that it was “not unreasonable” for the insurance guidelines to not align with the GASC; the court cited previous cases to support the idea that UBH’s interpretation was “not unreasonable” [8]. The plaintiffs argued that UBH had a conflict of interest because it served as both the plan administrator and the insurer for fully insured plans, which were the main sources of its revenue. However, the court concluded that even if UBH had a conflict of interest, it would not change the outcome of the case based on the facts presented. The court cited precedent to explain that it viewed the conflict of interest with a low level of skepticism since there was no evidence of malice, self-dealing or a history of denying claims for financial reasons. Based on these reasons, the court decided to reverse the previous decisions. The reprocessing of claims therefore would no longer take place [8].
After remanding, the district acknowledged that some treatment which aligned with GASC could be excluded under insurance plans; it ultimately ruled that “UBH abused its discretion because the Guidelines did not require coverage for all care consistent with GASC” [9]. However, in January 2023, the three-judge panel court of appeals ruled this language as erroneous. They stated that the district court substituted its own interpretation of the plans for UBH’s interpretation, which they found was faulty. The district court’s ruling was overturned because it incorrectly interpreted the insurance plans and guidelines regarding coverage consistent with GASC standards, and substituted its own interpretation for UBH’s. The higher court found this to be an erroneous judgment. Since many decisions made in the district court were based on inaccuracies, their judgments were reversed. Therefore, individuals who were denied coverage were not granted the right to reprocess their claims [9].
In August of 2023, a three-judge panel in the Court of Appeals for the Ninth Circuit released a third ruling where they reconsidered portions of the district court’s findings. The panel ordered remand of claim reprocessing “where a plaintiff has shown that his or her claim was denied based on the wrong standard and that he or she might be entitled to benefits under the proper standard” [10]. They stated that although the plaintiffs claimed that they were denied coverage by insurance due to aspects of guidelines, they never displayed proper demonstration that they were denied a complete and fair assessment review of their claims. UBH argued that the breach of fiduciary duty claim was “a disguised benefit claim”, and the judges ruled for further investigation of this [10]. As a result, the case was to be remanded back to the district court in order to determine whether the breach of fiduciary duty claim was actually a claim for benefits and, if so, whether the plaintiffs exhausted their administrative remedies. This gives slight progress to those who were denied their right to care previously as it gives the possibility to reprocess their claims in the future. The ruling gives the plaintiffs the opportunity to go through the administrative process before bringing their fiduciary duty claim to court. If the district determines that they are subject to the administrative exhaustion requirement, the plaintiffs may need to reprocess their claims before proceeding with their claim in court [10].
There has been no further information released regarding the case since August, since the court is currently in the process of examining if reprocessing is a possibility. As we await these decisions, it is imperative to acknowledge the importance of reducing barriers to mental health and substance use disorder treatment. The denial of insurance coverage acted as a barrier to tens of thousands of individuals throughout the United States from receiving proper treatment for their impaired conditions. Without adequate, accessible, and affordable treatment for those suffering from mental health and substance use disorder, quality of life could be significantly diminished.
In one qualitative analysis of insurance barriers to substance use disorder after passage of parity laws investigated the effects of insurance barriers to substance use disorder (SUD) treatment on those who suffer from it, researchers found that “Insurance is the biggest reason why a lot of larger health systems don’t provide significant outpatient behavioral services” [2]. This statement underscores the significant impact of insurance on the availability of outpatient behavioral services within larger health systems. It highlights a major challenge in achieving parity in SUD treatment: ensuring that coverage for SUD treatment aligns with coverage for other medical treatments of similar nature. However, the issue is that many services such as residential treatment, intensive outpatients therapy, and peer support specialists do not have obvious counterparts in medical treatments. Level of coverage is often calculated by “medical necessity” which can be capriciously defined and punitive to people with SUD [2]. Rather than advocating for SUD treatment to be treated with parity in comparison with other treatments, a minimum level of coverage for SUD treatment that is in line with best practice should be promoted in policy regarding insurance coverage.
The National Alliance on Mental Illness (NAMI) advocates for the numerous consequences that can result if mental illnesses are left untreated. Mental illnesses interfere with a person’s day-to-day thinking and functioning, which can result in a diminished capacity for coping with the ordinary demands of life. It is important to acknowledge that mental health can affect anyone, ranging from different incomes, races, ages, or religions. However, most people who are diagnosed with a serious mental illness can experience relief by actively participating in a treatment plan [4]. Unfortunately, untreated mental health conditions can lead to various consequences such as unnecessary disability, unemployment, substance abuse, homelessness, inappropriate incarceration, suicide, and poor quality of life. Those who are unable to access proper treatment for their mental illnesses may be at risk for these consequences if their insurance acts as a barrier to accessing treatment. NAMI also puts an emphasis on the importance that illnesses should be identified as early as possible and that treatment must be administered in a timely manner. If this occurs, recovery is accelerated and further harm due to the illness is minimized [4]. However, Wit v. United Behavioral Health shows that insurance can implement barriers to necessary, timely treatment. A long amount of time may pass between the coverage for treatment request and the actual approval, provided it is even granted. Symptoms can worsen over the long wait that an individual sustains as insurance decides whether to approve or deny the coverage. Quality of life of those suffering from mental illness can be severely diminished if they are unable to be provided with adequate treatment due to insurance barriers.
The district court’s ruling highlights the detrimental effects of restrictive guidelines on mental illness and SUD coverage. Pre-authorization requirements, limited provider networks, and arbitrary coverage limitations hinder access to mental health care, which leads to delays in treatment and exacerbation of symptoms. Wit v. United Behavioral Health also underscores the importance of aligning coverage with evidence-based treatment approaches. Insurance companies should prioritize coverage for treatments proven to be effective in addressing these health issues, rather than imposing arbitrary restrictions that limit access to care. The debates and restrictive guidelines surrounding coverage have significant negative consequences on those seeking care. Delays in treatment due to insurance denials can result in worsening symptoms, impaired functioning, and risk of adverse outcomes. However, the individuals in this case may derive solace in the prospect of diminishing these consequences through the potential reprocessing of their denied claims.
Wit v. United Behavioral Health has shed light on the challenges individuals face in accessing mental health and SUD care due to debates and restrictive guidelines imposed by insurance companies. Advocacy should support mental health and substance abuse care coverage as a fundamental aspect of healthcare. An emphasis must be placed on the need for removing barriers and aligning insurance coverage with evidence-based treatment approaches. By following this approach, policymakers can help improve mental health outcomes, enhance quality of life, and reduce societal costs associated with untreated mental illness and SUD. It is time to prioritize these health issues as a fundamental aspect of healthcare, and to ultimately ensure that all individuals have access and coverage for the care they need.
Sources:
[1] American Psychological Association. “Mental Health Parity.” Psychiatry.org – Mental Health Parity, October 17, 2023. https://www.psychiatry.org/psychiatrists/advocacy/federal-affairs/health-insurance-coverage-access-to-care/mental-health-parity.
[2] Dickson-Gomez, Julia, Margaret Weeks, Danielle Green, Sophie Boutouis, Carol Galletly, and Erika Christenson. “Insurance Barriers to Substance Use Disorder Treatment after Passage of Mental Health and Addiction Parity Laws and the Affordable Care Act: A Qualitative Analysis.” Drug and Alcohol Dependence Reports 3 (June 3, 2022): 100051. https://doi.org/10.1016/j.dadr.2022.100051.
[3] The Kennedy Forum. “Wit v. United Behavioral Health.” The Kennedy Forum. Accessed April 8, 2024. https://www.thekennedyforum.org/wit/.
[4] NAMI. “About Mental Health Conditions.” NAMI California, July 26, 2021. https://namica.org/what-is-mental-illness/#:~:text=Untreated%20mental%20health%20conditions%20can,and%20poor%20quality%20of%20life.
[5] Wiseman, Jennifer, and Leena Bhakta. “Big Litigation Win for UBH, but Mental Health Parity Risks Continue.” Big Litigation Win for UBH, But Mental Health Parity Risks Continue, April 14, 2021. https://www.mercer.com/en-us/insights/us-health-news/do-more-with-less-3-steps-to-reducing-low-value-care1/?size=n_20_n.
[6] Zealie. “Claims Reprocessing.” Zealie, December 22, 2021. https://zealie.com/claims-reprocessing/#:~:text=We’ve%20built%20a%20proprietary,our%20clients%20find%20very%20valuable.
[7] David Wit, et al., v. United Behavioral Health, No. 14-cv-02346-JCS, 2024 U.S. Dist., (N.D. Cal. Feb. 6, 2024).
[8] David Wit, et al., v. United Behavioral Health, No. 20-17364, 2022 U.S. App., (9th Cir. Mar. 22, 2022).
https://cases.justia.com/federal/appellate-courts/ca9/20-17363/20-17363-2022-03-22.pdf?ts=1647979262
[9] David Wit, et al., v. United Behavioral Health, No. 20-17364, 2022 U.S. App., (9th Cir. Jan. 26, 2023).
[10] David Wit, et al., v. United Behavioral Health, No. 20-17364, 2022 U.S. App., (9th Cir. Aug. 22, 2023).https://cdn.ca9.uscourts.gov/datastore/opinions/2023/08/22/20-17363.pdf
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