Big litigation win for UBH, but mental health parity risks continue 

United Behavioral Health (UBH) chalked up a major victory in the landmark class action lawsuit, Wit v. United Behavioral Health, when the US Court of Appeals for the Ninth Circuit overturned a district court’s decision ordering UBH to reprocess more than 67,000 denied behavioral claims using independent clinical guidelines instead of UBH’s clinical guidelines. In 2020, the district court held that UBH violated ERISA’s claim-review and fiduciary standards by applying its own overly narrow guidelines when making coverage and payment decisions for requested behavioral and mental health services, such as residential treatment, instead of using guidelines that were consistent with generally accepted standards of care. A Ninth Circuit three-judge panel found that the district court erred in failing to properly defer to UBH, and that UBH’s plan interpretation—namely, that the administration of behavioral and mental health claims did not require consistency with generally accepted standards of care—was “not unreasonable.”  

The 2020 Wit decision spawned lawsuits by individual plaintiffs challenging their plan’s clinical guidelines, as well as class action lawsuits demanding the reprocessing of denied behavioral health claims. It’s not clear yet that UBH’s big win in the Ninth Circuit will reverse either trend. The Ninth Circuit’s unpublished opinion has limited precedential value, and the Wit plaintiffs might ask for a rehearing or appeal to the US Supreme Court. And the Ninth Circuit, while ruling in UBH’s favor, may have left the door open for similar class actions, depending upon the facts involved. The Ninth Circuit upheld the plaintiffs’ standing to sue and the lower court’s decision to certify the class, and expressly declined to resolve the issue of whether reprocessing of claims is an appropriate remedy.

Whether or not we’ve heard the last of Wit, employers should continue to focus on ensuring that their health plan’s behavioral health benefits comply with applicable law. As we reported here, during 2021, the Department of Labor (DOL) requested mental health parity comparative analyses from more than 150 plans and issuers. This effort is expected to continue in 2022. And it appears that DOL now seeks – a as part of a standard DOL investigation – a broad range of documents related to mental health parity, including analyses of both quantitative and nonquantitative treatment limits compared with medical/surgical limitations. Under President Biden’s proposed fiscal 2023 budget, federal regulators would also get the power to levy fines against insurers and plan sponsors that violate mental health parity rules, as well as additional enforcement funding – although Congress will have the last word on whether these budget proposals become law.