These practices, by a former health insurance company of mine destroys lives. Usually class action lawsuits like this are settled, rather than resolved on the merits, in this case following a 10 day bench trial.
LOS ANGELES, March 05, 2019 (GLOBE NEWSWIRE) --
In a landmark mental health ruling, a federal court held today that health insurance giant United Behavioral Health (UBH), which serves over 60 million members and is owned by UnitedHealth Group, used flawed internal guidelines to unlawfully deny mental health and substance use treatment for its insureds across the United States. The historic class action was filed by Psych-Appeal, Inc. and Zuckerman Spaeder LLP, and litigated in the U.S. District Court for the Northern District of California.
The federal court found that, to promote its own bottom line, UBH denied claims based on internally developed medical necessity criteria that were far more restrictive than generally accepted standards for behavioral health care. Specifically, the court found that UBH’s criteria were skewed to cover “acute” treatment, which is short-term or crisis-focused, and disregarded chronic or complex mental health conditions that often require ongoing care.
The court was particularly troubled by UBH’s lack of coverage criteria for children and adolescents, estimated to number in the thousands in the certified classes.In its decision, the court also held that UBH misled regulators about its guidelines being consistent with the American Society of Addiction Medicine (ASAM) criteria, which insurers must use in Connecticut, Illinois and Rhode Island. Additionally, the court found that UBH failed to apply Texas-mandated substance use criteria for at least a portion of the class period.
While the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requires parity for mental health and substance use benefits, insurers are permitted to evaluate claims for medical necessity. However, by using flawed medical necessity criteria, insurers can circumvent parity in favor of financial considerations and prevent patients from receiving the type and amount of care they actually require.
In his decision, Chief Magistrate Judge Joseph Spero concluded that “the record is replete with evidence that UBH’s Guidelines were viewed as an important tool for meeting utilization management targets, ‘mitigating’ the impact of the 2008 Parity Act, and keeping ‘benex’ [benefit expense] down.”
The court’s ruling stems from two consolidated class-action lawsuits, Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health, brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016 and tried in October 2017. The ruling affects UBH insureds who were denied outpatient, intensive outpatient and residential treatment from 2011 to 2017.
Only ERISA participants and beneficiaries are class members in this lawsuit, requiring non-ERISA insureds, such as government employees, who were denied coverage under the same flawed guidelines to rely on regulators to hold UBH accountable.
From an AP press release. Docket here. The public version of the ruling was redacted for patient privacy reasons.
The Court found on the issue of liability (not damages) that:
UBH has breached its fiduciary duty by violating its duty of loyalty, its duty of due care, and its duty to comply with plan terms by adopting Guidelines that are unreasonable and do not reflect generally accepted standards of care. . . . UBH’s Guidelines were unreasonable and an abuse of discretion because they were more restrictive than generally accepted standards of care.
UBH’s experts. . . . had serious credibility problems. The Court found that with respect to a significant portion of their testimony each of them was evasive – and even deceptive – in their answers when confronted with contrary evidence. . . .
Mr. Niewenhous’s testimony . . . that the Guidelines were developed solely to reflect generally accepted standards of care was not credible. As discussed further below, internal UBH communications involving Mr. Niewenhous make it crystal clear that the primary focus of the Guideline development process, in which Mr. Niewenhous played a critical role, was the implementation of a “utilization management” model that keeps benefit expenses down by placing a heavy emphasis on crisis stabilization and an insufficient emphasis on the effective treatment of co-occurring and chronic conditions.
. . .Dr. Alam’s testimony on the subject of whether the Guidelines cover certain lower levels of residential treatment set forth in the ASAM Criteria, and his testimony about Mr. Shulman’s conclusions on this subject, was evasive and at times untruthful. His testimony at trial also revealed that he had misrepresented material facts in his expert report when he stated that UBH contracts with “few, if any” providers of lower-intensity residential treatment, namely, at the 3.3 and 3.5 levels under ASAM; at trial, in contrast, he conceded that UBH does contract with such providers. Dr. Alam also repeatedly offered interpretations of the Guidelines that were inconsistent with their plain meaning and dismissed changes to the Guidelines proposed by Mr. Shulman as “just changing words.” . . .
[T]he testimony of some UBH witnesses that Peer Reviewers can deviate from the Guidelines based on their clinical judgment was not credible.
Damages will be decided later. The case was filed May 21, 2014.