For far too long, health insurers have been treating people with mental health and substance use disorders like second-class citizens. A federal court recently ruled that this must stop. Employers and regulators, take note.
The ruling came in the case of Wit v. United Behavioral Health (UBH). A federal court in Northern California found that UBH, which manages behavioral health services for UnitedHealthcare and other health insurers, rejected the insurance claims of tens of thousands of people seeking mental health and substance use disorder treatment based on defective medical review criteria. In other words, the largest managed behavioral health care company in the country was found liable for protecting its bottom line at the expense of its members.
What this case really boils down to, of course, is discrimination and the perpetuation of a separate and unequal system of care that would never be tolerated for the treatment of cancer or heart disease. For the mental health and addiction communities, this ruling shines a much-needed spotlight on the insidious nature by which insurers deny care for those most vulnerable to death by suicide or overdose.
In Wit v. United Behavioral Health, 11 plaintiffs sued UBH on behalf of more than 50,000 individuals whose claims were denied based on the flawed review criteria. Natasha Wit had sought coverage for treatment for a number of chronic conditions, including depression, anxiety, obsessive-compulsive behaviors, a severe eating disorder, and related medical complications. UBH repeatedly denied coverage for her treatments. Like other families experiencing such denials, the Wits paid nearly $30,000 out of pocket for Natasha’s treatment, despite having health insurance coverage.
The court found that UBH’s internally developed guidelines, specifically its level of care guidelines and coverage determination guidelines, were “unreasonable and an abuse of discretion” and “infected” by financial incentives meant to restrict access to care. At the heart of the case was UBH’s reliance on and manipulation of these internal guidelines and its failure to use national evidence-based guidelines for outpatient, intensive outpatient, and residential treatment of mental health and substance use disorders that have been developed by nonprofit, clinical specialty organizations such as the American Society of Addiction Medicine.
For many individuals needing mental health or substance use disorder treatment, an insurer’s flawed criteria or guidelines can mean the difference between life and death. This case should prompt employers to take a closer look at their health plans and make important decisions about who they are doing business with. UBH isn’t the only offender.
Wit v. United Behavioral Health is a landmark case that sends a powerful message about the fight for parity to health insurers regarding how they make coverage determinations. It was filed under the Employee Retirement Income Security Act of 1974 (ERISA), the federal law that governs group health insurance policies issued by private employers, alleging that UBH violated its obligations under this federal law.
ERISA requires plan administrators to function in a fiduciary capacity when overseeing employee benefit plans, including insurance coverage for mental health and substance use disorder treatment. In this case, the court held that UBH breached its fiduciary duties by developing and employing flawed medical necessity criteria for behavioral health services.
Among other concerns, the judge highlighted how UBH was circumventing the Mental Health Parity and Addiction Equity Act of 2008, also known as the Federal Parity Law (we were its lead bipartisan sponsors). It requires insurers to cover illnesses of the brain, such as depression or addiction, no more restrictively than illnesses of the body, such as diabetes or cancer. In his ruling on Wit v. United Behavioral Health, Judge Joseph C. Spero wrote 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” in order to keep benefit costs down.
Due to UBH’s flawed approach, the court ruled in favor of the plaintiffs, stating that under generally accepted standards of care, chronic and comorbid conditions should be effectively treated, even when those conditions persist, respond slowly to treatment, or require extended or intensive levels of care.
UBH’s medical-necessity criteria failed to provide coverage in such situations. Instead, its guidelines were designed to approve coverage solely for “acute” episodes or crises, such as when individuals are actively suicidal or suffering from severe withdrawal. We wouldn’t dare treat someone with type 1 diabetes who went into insulin shock, then send her home without further treatment and expect a full recovery. Why are those with mental health and substance use disorders treated differently?
The court also ruled that UBH’s guidelines improperly required reducing the level of care, such as removing patients from residential treatment programs to some form of outpatient therapy, even if the providers who were treating them believed — consistent with generally accepted clinical standards — that maintaining a higher level of care was more effective.
Insurers should not be calling the shots when it comes to treatment options.
In addition, the court found that UBH failed to follow specific guidelines mandated by certain states for evaluating the medical necessity of behavioral health services. For example, Connecticut, Illinois, and Rhode Island require that when reviewing substance use disorder claims for medical necessity, insurers must apply criteria consistent with the American Society of Addiction Medicine’s standards of care.
It is important to note that the Wit v. United Behavioral Health ruling applies only to individuals covered by employer-sponsored insurance plans, due to the scope of ERISA. What will happen to those covered by non-ERISA plans, such as government employees, families and individuals with non-group policies, and those in plans managed by Medicaid or Medicare when their mental health and substance use disorder treatment is improperly denied coverage because of defective “medical necessity” criteria? Who is looking out for them?
Although just a handful of insurers manage behavioral benefits across the board, the regulation and oversight of these companies is fragmented and meager. Federal and state regulators should not accept self-reports by insurers as evidence of compliance with anything — let alone with parity laws intended to protect those with mental health and substance use disorders. Given UBH’s violations, regulators must immediately start examining the market conduct of all health plans across the country.
Insurers should also be barred from creating or buying special behavioral health review criteria developed for managed care when generally accepted medical-necessity criteria are readily available from nonprofit, clinical specialty organizations such as the American Society of Addiction Medicine.
We must apply the lessons learned from Wit v. United Behavioral Health to the entire behavioral health care system in the U.S. And the Federal Parity Law must be enforced far more vigilantly than it is today.
Insurers should now get the message loud and clear that there will be major consequences for discriminating against those with mental health and substance use disorders. Thanks to Wit v. United Behavioral Health, the tide is turning. Families are now being empowered with the knowledge and inspiration they need to stand up for their rights.
Patrick J. Kennedy is the founder of The Kennedy Forum and, while serving as a U.S. representative (D-R.I.) from 1995 to 2011 was a co-sponsor of the Federal Parity Law. The forum’s Don’t Deny Me campaign educates consumers about their rights under the Federal Parity Law and connects them with essential appeals guidance and resources. Jim Ramstad is a former U.S. representative (R-Minn., 1991 to 2009) and a co-sponsor of the Federal Parity Law. He is a former fellow of the Harvard Institute of Politics.