San Francisco, California: In a damning decision, a Northern District of California Court has ruled that the mental illness and addiction arm of health insurer UnitedHealth Group had denied benefits to tens of thousands of patients based on its overly restrictive guidelines in order to improve its bottom line.
U.S. Chief Magistrate Judge Joseph C. Spero said in the ruling that United Behavior Health had breached its fiduciary duty under the law by exhibiting “arbitrary and capricious” behavior in denying benefits under its guidelines.
The ruling highlighted how many of its guidelines did not mirror generally accepted standards of care, specifically concerning the administration of care for addiction, which many insurers use the American Society of Addiction Medicine to determine treatment.
“UBH’s refusal to adopt the ASAM Criteria was not based on any clinical justification,” the decision said. “Indeed, all of its clinicians recommended that the ASAM Criteria be adopted. The only reason UBH declined to adopt the ASAM Criteria was that its Finance Department wouldn’t sign off on the change.”
It also said that it did not accurately differentiate requirements for treatment of children.
“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 decision said.
Concerning the testimonies of United Behavior Health’s expert witnesses, Spero said that they were “evasive” and at times even “deceptive” when shown evidence counter to their claims.
The 106-page decision follows the October 2017 trial before Spero who ruled over the class-action lawsuit filed by Zuckerman Spader and Psych-Appeal, Inc. on behalf of patients who were denied treatment between 2011 and 2017.
Zuckerman Spader partner D. Brian Hufford hailed the ruling as a positive for anyone who suffers from mental health issues.
“This is a monumental win for mental health patients, who face widespread discrimination in attempting to get the coverage they were promised and that the law requires,” he said in a statement. “For the first time, an insurer was forced to stand trial for denying thousands of mental health and substance use disorder claims, and the court delivered a strong message: what you’re doing is harmful and illegal, and it must end.”
This is not a solitary case, Zuckerman Spade partner Jason Coward said, adding the practice of manipulating internal coverage criteria to deny claims is widespread.
“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,” he said.
However, United Behavior Health implied in a statement that it will appeal.
“We look forward to demonstrating in the next phase of this case how our members received appropriate care. We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders,” it said.