- A federal court has found that United Behavioral Health (UBH), a unit owned by UnitedHealth Group, used a flawed methodology to deny mental health and substance abuse treatment services to beneficiaries.
UBH, which also operates as OptumHealth Behavioral Solutions, employed overly-strict criteria for denying care to individuals, potentially excluding thousands of members, including children, from accessing behavioral health services.
The class action suit, filed in San Francisco District Court, found that UBH violated its fiduciary obligations under the Employee Retirement Income Security Act (ERISA) by employing medical necessity criteria that “overemphasize[d] acute mental health and substance use disorder symptoms, while disregarding chronic or complex conditions,” says Zuckerman Spaeder, a law firm involved in the case.
UBH’s internal guidelines (“Guidelines”) also failed to take into account the unique needs of children and adolescents, the court’s decision added.
“One of the most troubling aspects of UBH's Guidelines is their failure to address in any meaningful way the different standards that apply to children and adolescents with respect to the treatment of mental health and substance use disorders,” the ruling said.
“UBH failed to adopt separate level-of-care criteria tailored to the unique needs of children and adolescents. Nor do the Guidelines instruct decision-makers to apply the criteria contained in the Guidelines differently when the member is a child or adolescent.”
The court also contended that UBH misled regulators about its compliance with treatment criteria set by the American Society of Addiction Medicine (ASAM), the standard framework required for insurers operating in Connecticut, Illinois, and Rhode Island.
Overreliance on internal guidelines that routinely denied mental health and substance abuse care undercut the intention of legislation that requires parity between behavioral health and medical care benefits, the court added.
The judgement asserts that UBH prioritized keeping beneficiary costs low instead of focusing on the wellness and care needs of plan members.
“The very fact that the Guidelines were riddled with requirements that provided for narrower coverage than is consistent with generally accepted standards of care gives rise to a strong inference that UBH’s financial interests interfered with the Guideline development process,” wrote Joseph C. Spero, Chief Magistrate Judge, in his decision.
“Other decisions by UBH during the class period further support the conclusion that its financial self-interest was a critical consideration in deciding what criteria would be used to make coverage decisions and when Guidelines would be revised.”
The court cited routine denials of coverage for FDA-approved treatments such as transcranial magnetic stimulation (TMS).
“[An internal committee] recommended that UBH approve TMS claims only for members of self-funded plans, that is, plans where UBH was not responsible for paying the benefits, and not for members of the fully insured plans,” the document says, after UBH found that the per-beneficiary cost for the treatment could reach $14,000.
The lawsuit also accuses UBH of repeatedly refusing to adopt the ASAM criteria for treatment decisions due specifically to the fact that following the industry criteria could result in higher spending.
The finance department refused to sign off on using the ASAM framework because “they could not estimate the financial impact on [beneficiary expenses] in changing from using the UBH guidelines to ASAM,” according to testimony.
As a result of UBH’s actions, coverage was routinely denied to tens of thousands of individuals, lawyers for the plaintiffs said.
“For far too long, patients and their families have been stretched to the breaking point, both financially and emotionally, as they battle with insurers for the mental health coverage promised by their health plans,” said Meiram Bendat of Psych-Appeal, Inc. and co-counsel for the plaintiffs.
“Now a court has ruled that denying coverage based on defective medical necessity criteria is illegal.”
Jason Cowart, partner at Zuckerman Spaeder, pointed out that other payers may also be engaging in similarly non-compliant behavior.
“United is not alone in this sort of behavior — manipulating internal and/or proprietary coverage criteria to increase claim denials is a widespread industry practice,” he asserted.
“Our cases demonstrate that even though the written terms of a health plan may appear adequate and lawful, many insurers make nearly all coverage decisions based on internal guidelines. The court's ruling reveals how important those guidelines are. Hopefully, it will serve as a warning to all insurers that their internal guidelines are subject to judicial review.”