Federal Court Orders Remedies for 67,000 Mental Health Denials

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ngd- This should apply to all insurance companies. Also, the idea of independent criteria setting should be the rule in utilization management in Michigan’s Behavioral health System….

Federal Court Orders UnitedHealth to Fix 67,000 Mental Health Denials

We told you last year about a legal victory for mental health parity in the case of Wit v. UnitedHealth Group (UBH). In a ruling last week to determine remedies for members of the class-action suit, the judge ordered that the company must replace their guidelines with independent rules that will lead the nation’s largest insurer to pay for more treatment. This ruling will also pave the way for more challenges to health insurers’ ability to set their own guidelines for what treatment is medically necessary.

This case arose out of pervasive and long-standing violations of the Employee Retirement Income Security Act (ERISA). According to the ruling, UBH used overly restrictive internal guidelines that were inconsistent with the terms of members’ health insurance plans and denied coverage of mental health services to tens of thousands of people which could be covered had the insurer used generally accepted standards. The company’s guidelines allowed them to only cover treatment that stabilized the patient while ignoring the effective treatment of members’ underlying conditions. This verdict gave peers and their providers a tool to push back after years of letting insurance companies dictate what is medically necessary. While nearly 50,000 ERISA beneficiaries will be eligible for relief in this case, non-ERISA beneficiaries (such as government employees) who were impacted by these defective guidelines must rely on state and federal regulators to intervene on their behalf.

In its 99-page ruling, the court required:

  • application of medical necessity criteria developed by non-profit clinical specialty associations for the next 10 years;
  • appointment of a special master to monitor UBH’s compliance with the Court’s remedies order;
  • training of UBH in the proper use of court-ordered medical necessity criteria; and
  • reprocessing of nearly 67,000 mental health and substance use disorder benefit claims.

The strategy to make other insurers adopt new guidelines is being tested in court. Psych Appeal, which represented the plaintiff in this class-action lawsuit, has already brought other cases against insurers. Several have been settled and several more are pending. Advocates who want insurance companies to use these standards also won a victory outside the courtroom in September. California Governor, Gavin Newsome, signed a law that requires all state-regulated insurers to use independent treatment guidelines in the same way that United Behavioral Health will be required by this court ruling.

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