United Behavioral Health Sued for Restrictive Bundled Payment Policy
United Behavioral Health is being sued for allegedly denying claims for medically necessary treatment under its bundled payment policy.
Source: UnitedHealthcare Logo
- United Behavioral Health is being sued for allegedly denying mental healthcare and substance abuse care claims through its bundled payment policy.
United Behavioral Health administers UnitedHealth Group’s substance abuse care benefits and mental healthcare benefits for employer-sponsored health plans. It is wholly owned by UnitedHealth Group.
“This case arises from UBH’s deliberate development of policies designed to reduce the number and value of claims UBH would approve, thereby serving the financial interests of UBH, its affiliates, and the employer plan sponsors they consider their customers,” the complaint explained.
“The UBH policies at issue in this case all disregard or directly flout the terms of the Plaintiffs’ Plans, and were developed to serve UBH’s interests and those of its plan sponsor customers rather than those of the plan members. As a result, the policies all breach the fiduciary duties UBH owes to all ERISA plan members, including Plaintiffs.”
The complaint argues that the guidelines which United Behavioral Health employed to deny these claims were excessively restrictive. The legal team pointed to a previous case in which the court determined that United Behavioral Health’s practices were too restrictive and contended that the guidelines had not loosened much since then.
The lawsuit also opposes United Behavioral Health’s bundled payment policy. Employers can use episode of care models or bundled models to control costs. However, the lawsuit argues that United Behavioral Health used bundled payments to avoid covering medically necessary treatments.
According to the legal team, United Behavioral Health’s bundled payment model tied together all services completed in a single day. These services could include inpatient, residential, or partial hospitalization services.
If the level of care provided in that day exceeds United Behavioral Health’s standards, the behavioral health company denied all of that day’s services, not merely the services that United Behavioral Health considered unnecessary.
“Using this all-or-nothing policy, UBH rejects services that it concedes are medically necessary by forcing them to be linked together with others that UBH may have a legitimate reason to deny,” D. Brian Hufford, partner at Zuckerman Spaeder, the law firm that will uphold the plaintiffs’ position, explained in the press release.
“If UBH properly authorized coverage for at least some of the services provided in residential treatment, more patients would be able to afford this level of care, which is often a life-saving option for patients.”
UnitedHealth Group intends to defend United Behavioral Health’s actions.
“We are committed to ensuring all our members have access to care consistent with the terms of their health plan and state and federal rules—and will vigorously defend ourselves in this case,” a UnitedHealth Group spokesperson told HealthPayerIntelligence in an emailed statement.
“As part of our broader commitment to quality care, we continue to support our members with increased access to providers and new ways to quickly get the effective behavioral support they need.”
This is not the first time that United Behavioral Health’s coverage policies have been at the center of a lawsuit. In August 2021, UnitedHealthcare settled a lawsuit with the US Department of Labor and the New York State Attorney General regarding reimbursement parity. The case ended with United Behavioral Health doling out $13.6 million to beneficiaries and $2 million in penalties.
Despite the conflict over United Behavioral Health’s approach, experts have supported using bundled payment models to improve coverage for behavioral healthcare and substance use disorders, particularly for members with co-occurring conditions.
“Bundled payment models work because they tend to help reduce waste in terms of stacking codes or keeping people in the hospital longer than they should be,” Caroline Carney, MD, chief medical officer at Magellan Health, told HealthPayerIntelligence in a separate interview.
Although these models could be well-suited to covering behavioral healthcare, substance abuse care, and co-occuring conditions, Carney acknowledged that it is much more difficult to build a bundled payment model for these conditions compared to treatments such as joint replacements.
