The Evolution of Litigation of Health Insurance Claims Involving Mental Health

A lengthy history of discrimination by health insurers against claims involving behavioral health conditions and substance use disorders led Congress to pass the Mental Health Parity and Addiction Equity Act [3] (MHPAEA) in 2008. [4] Prior to the passage of the MHPAEA, it was common for health insurers to either exclude or limit coverage for psychiatric conditions; [5] and despite the passage of an earlier federal mental health parity law in the 1990’s, that measure was mostly ineffective due to broad loopholes in the legislation. [6] Nor were the efforts of some states to mandate parity successful due to broad preemption [7] of state laws by the Employee Retirement Income Security Act (ERISA). [8] Although the Supreme Court’s ruling in Metropolitan Life Insurance Company v. Massachusetts [9] found that a Massachusetts law mandating minimum insurance coverage for mental health conditions was saved from ERISA preemption under ERISA’s savings clause provision, [10] that provision does not apply to self-funded plans, [11] and not all states enacted minimum coverage requirements. Thus, the battle to secure adequate health coverage for all Americans suffering from mental health conditions continued.

This paper will review the history of litigation prior to the passage of MHPAEA and will then discuss the impact on litigation brought about by the MHPAEA, along with greater focus by the courts on coverage for treatment of mental illness. Finally, this paper will conclude with some predictions as to the future of litigation involving coverage denials for behavioral health conditions.

Litigation Challenging Benefit Denials Prior to the MHPAEA

A. Challenges Based on Policy Ambiguity

Since there was no recognized right to receive health insurance coverage for behavioral health conditions, insurance policy provisions excluding or limiting such coverage made claim denials unchallengeable unless ambiguous policy language supported coverage under a doctrine of insurance law known as contra proferentem, which construes insurance policy ambiguities in favor of the insured and against the insurer.[12] In Kunin v. Benefit Trust Life Ins. Co.,[13] that rule of construction was applied to defeat a health insurer’s effort to limit coverage for treatment of autism based on a policy limitation applicable to “mental illness.” The court ruled that in the absence of a policy definition for that term, the limitation was inapplicable to conditions known to have an organic causation. [14]

Plaintiffs have also been successful in overcoming mental health exclusions or limitations by arguing their conditions were caused either by an injury or physical illness Disabling Medical Conditions. For example, in Phillips v. Lincoln National Life Insurance Co., [15] the court questioned whether an organic mental illness fell within an insurance policy limitation for “mental disorders” in the absence of a policy definition of that term inclusive of organic disorders. A somewhat contrary ruling, however, was issued in Brewer v. Lincoln National Life Insurance Co.,[16] which dealt with an adolescent’s psychiatric hospitalization due to a mixed organic brain syndrome. Ruling for the insurer, the court rejected a challenge to exclusion of the condition. The court found:

The cause of a disease is a judgment for experts, while laymen know and understand symptoms. Laymen undoubtedly are aware that some mental illnesses are organically caused while others are not; however, they do not classify illnesses based on their origins. Instead, laypersons are inclined to focus on the symptoms of an illness; illnesses whose primary symptoms are depression, mood swings and unusual behavior are commonly characterized as mental illnesses regardless of their cause.

Neither policy in this case limited the definition of “mental illness” to only those illnesses that have a non-organic origin, and the district court should not have adopted a definition that effectively imposed such a limitation. By focusing upon the disease’s etiology, the district court considered factors that are important to experts but not to laypersons. The court thus failed to examine the term “mental illness” as a layperson would have, which is the examination we conclude ERISA and federal common law require. [17]

B. Litigation Over the Consequences of Benefit Denials

While the Supreme Court found that state laws mandating minimum health insurance coverage for mental illnesses were not preempted by RISA, claims brought by insureds or their families for injuries sustained or suicide due to benefit denials, even where coverage existed, were found preempted. In Danca v. Emerson Hospital,[18] the court dismissed a suit for injuries sustained when an insurer denied authorization for treatment of bipolar disorder due to ERISA’s preemption of the injury claim.[19] The Supreme Court later ruled in Aetna Health Inc. v. Davila,[20] that all state law based claims alleging injuries resulting from a denial of health benefits were preempted by ERISA, leaving only claims seeking benefits due under the patient’s employee benefit plan. Thus, under plans that excluded or limited coverage for psychiatric conditions, the outcome in Davila resulted in the claimant receiving either no relief whatsoever or relief limited to benefits available under the plan.

C. Claims Under the Americans With Disabilities Act

After the passage of the Americans with Disabilities Act (ADA) in 1990,[21] there was a popular belief that the ADA would preclude insurers’ discrimination against mental illness under the public accommodations provisions of that law. Specifically, Section 302 of the ADA states that “no individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation.”[22] However, the federal courts quickly ruled that the ADA has no authority over the content of insurance policies. [23] Hence, policy limitations in disability insurance policies that provided for inferior benefits for disabilities due to behavioral health conditions were upheld in the face of ADA challenges. [24]

D. Litigation Under the Predecessor to the MHPAEA

• The Mental Health Parity Act of 1996,[25] was the first attempt by Congress to address the gaping disparity between insurance coverage for physical and mental health conditions. However, it suffered from numerous limitations:
  The law excluded plans offered by employers having fewer than 50 employees. [26]
• Alcohol and substance use disorders were exempted. [27]
• The law excluded plans that would incur a cost increase of 1% or greater as a result of providing parity in coverage. [28]
• While the law required parity in caps on payments for mental health and medical/surgical benefits, it had no impact on limits as to co-payments, as well as frequency and number of doctor/therapist visits. [29]
• The law had a built-in sunset provision providing for its expiration on September 30, 2001. [30]

The state of insurance coverage for mental health conditions, along with the foregoing shortcomings in the original Mental Health Parity Act, were brought to the attention of Congress in a report on the Mental Health Parity Act issued by the United States General Accounting Office [31] in May 2000. [32] The report recognized that even the plans which were compliant with the initial Mental Health Parity Act contained features that limited access to mental health treatment more restrictively than plan provisions relating to medical and surgical benefits. Common limitations included restrictions on outpatient visits or hospital days for mental health treatment. The GAO recognized that insurers were concerned about the costs associated with long-term mental health care.

Congress ultimately responded by passing the Mental Health Parity and Addiction Equity Act, [33] which applied to plans renewing on or after January 1, 2010. Final rules relating to MHPAEA were issued on November 13, 2013 [34] following passage of the Patient Protection and Affordable Care Act [35] which mandated that insurer-covered treatment for mental health conditions and substance use disorders be consistent with generally accepted standards of care for such conditions and covered in the same manner as medical and surgical benefits. Non-qualitative treatment limitations (NQTLs) were also required to be offered in parity with such limitations for medical/surgical benefits. Following the issuance of final regulations, lawsuits brought by individuals challenging health benefit denials burgeoned.

The MHPAEA changed the manner in which lawsuits challenging coverage for treatment of mental health conditions were framed. Under ERISA, most benefit denial claims are brought under ERISA § 502(a)(1)(B), [36] seeking to recover benefits due under the terms of the plan. However, the MHPAEA law gave plaintiffs a tool that they did not previously have at their disposal – the ability to challenge a denial even if the coverage decision was made in conformity with plan terms.

Litigation Following the Enactment of the Mental Health Parity and Addiction Equity Act

The first issue the courts have addressed is how to plead a MHPAEA violation. The statute itself does not specifically authorize victims of MHPAEA violations to sue for redress. However, the courts have mostly concluded that plaintiffs can plead a claim for violation of MHPAEA pursuant to ERISA § 502(a)(3). [37] There are two types of claims that can be pled under MHPAEA – facial violations and “as applied” challenges.

Facial violation claims challenge policy terms that explicitly provide for inferior coverage – such as a blanket exclusion for residential behavioral health treatment – which is analogous to post-surgery rehabilitation, which is typically covered. [38] A leading case on that issue is Harlick v. Blue Shield of California, [39] where the U.S. Court of Appeals for the Ninth Circuit ruled that a health insurance plan violated MHPAEA by excluding coverage for treatment of anorexia nervosa in a residential treatment center.

Even if the plan terms appear neutral, there may still be an “as applied” violation of MHPAEA. [40] Often, plaintiffs allege both facial violations of MHPAEA, as well as “as applied” violations. [41]

In the regulations accompanying MHPAEA, the Department of Labor presented an example of a plan provision requiring the use of “evidentiary standards” “based on clinically appropriate care for a condition” to determine medical necessity for certain types of behavioral health treatment. [42] The example states the use of such criteria would not violate MHPAEA. Unsurprisingly, immediately after the regulation’s promulgation, insurers began to adopt clinical care guidelines that were used as the basis for determining the medical necessity for more intensive levels of care for behavioral health treatment. The principal example of such guidelines are the Milliman Care Guidelines (MCG), which are used by a number of health insurers. [43] When such criteria were applied, most courts sided with the insurers when claim denials were challenged. [44]

In situations where courts reviewed claim denials under an arbitrary and capricious standard of court review, insurers’ compliance with clinical guidelines has been especially problematic for claimants due to findings made by courts concerning the reasonableness of the insurer’s determination.[45] Courts were unwilling to find an abuse of discretion when plan administrators acted in accordance with care guidelines that were represented as evidence- based. All of that changed, however, with the issuance of Wit v. United Behavioral Health. [46]

Wit v. United Behavioral Health

In Wit, plan participants from a number of plans insured or administered by UnitedHeathcare and its subsidiaries brought a class action lawsuit against United Behavioral Health (UBH), one of the country’s largest managed healthcare organizations. [47] UBH administers behavioral health benefits, that is, benefits for mental health conditions and substance use disorders, for a variety of commercial and self-funded health benefit plans. [48] In its role as administrator, UBH decides whether the plans cover treatment sought by plan participants. [49] UBH developed and implemented Level of Care Guidelines and Coverage Determination Guidelines (collectively “Guidelines”) to make such coverage decisions. [50]

The plan participants challenged UBH’s Guidelines. Specifically, the plan participants argued that UBH’s use of the Guidelines was inconsistent with generally accepted behavioral health standards and thus (1) violated ERISA’s fiduciary standards, and (2) resulted in the arbitrary and capricious denial of benefits. With respect to the breach of fiduciary duty claim, plan participants contended that UBH violated its duty of prudence and duty to act solely in the interest of plan participants and beneficiaries by (a) developing standards that were far more restrictive than generally accepted standards of care, and (b) prioritizing cost savings over providing participants benefits. [51] With respect to allegations that benefit denials were arbitrary and capricious, the participants maintained that using the Guidelines was arbitrary and capricious because (a) the health plans provided for coverage consistent with generally accepted standards of care, and (b) some of the plans were subject to state law mandates that required the use of American Society of Addiction Medicine (ASAM) or Texas Department of Insurance (TDI) clinical criteria. [52]

The District Court’s Rulings

The judge assigned the Wit case, Chief Magistrate Judge Joseph Spero of the U.S. District Court for the Northern District of California, issued three lengthy opinions – in the first decision, the court certified three separate classes challenging the Guidelines. [53] The first class (“Wit Guideline Class”) consisted of members of ERISA- governed health benefit plans who were denied coverage for residential treatment for a mental illness or substance abuse disorder between May 20, 2011 and June 1, 2017 based upon the application of the Guidelines. [54] The first class did not include individuals covered by the second class. The second class (“Wit State Mandate Class”) consisted of members of fully-insured plans subject to state law mandates in Connecticut, Illinois, Rhode Island, and Texas who were denied coverage for treatment of substance use disorders based upon the Guidelines. [55] The third class (“Alexander Guideline Class”) differed from the first two classes in that it consisted of members who were denied coverage for outpatient or intensive outpatient services rather than residential treatment. [56] The third class also excluded members of plans that were fully-insured and subject to state law mandates in Connecticut, Illinois, Rhode Island, and Texas.

In the second opinion, which was issued following a 10-day bench trial, the court addressed the merits of the plan participants’ ERISA claims. [57] Before reaching the substance of the claims, the court first addressed a number of preliminary issues. First, the court determined that UBH’s Guidelines were not consistent with generally accepted standards of care.[58] For example, the court found the Guidelines deviated from generally accepted standards of care and treatment by placing an “excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.” [59] Second, the court found that the Guidelines violated the state mandates in Illinois, Connecticut, Rhode Island, and Texas by failing to apply the criteria required by the law in those states in making coverage determinations related to substance use disorders. [60] Third, the court determined that the process UBH utilized to develop its Guidelines was “fundamentally flawed because it [was] tainted by UBH’s financial interests.”[61] Finally, the court excused any applicable claim exhaustion requirements. [62]

Addressing the substance of the breach of fiduciary duty claim, the court first found that UBH, as claims administrator, was a plan fiduciary, and that it was acting as a plan fiduciary when it adopted the Guidelines and applied them to the plan participants’ claims. [63] The court then applied the abuse of discretion/arbitrary and capricious standard in its consideration of whether UBH breached its fiduciary duties of loyalty and due care as well as its duty to follow the terms of the plan. [64] However, the court first determined that significant skepticism of UBH’s decision- making was warranted in assessing whether UBH abused its discretion when it adopted the Guidelines [65] based on three separate rationales. First, the court pointed out that UBH acted under a structural conflict of interest because a large portion of UBH’s revenues came from fully insured plans, and even with respect to self-funded plans, UBH felt pressure to keep costs down in order to remain competitive.

Second, UBH used a uniform set of Guidelines to make coverage decisions regardless of whether plans were fully insured or self-funded. Third, financial considerations played an important role in its development and adoption of its Guidelines. Indeed, the only reason UBH declined to adopt ASAM criteria, according to the court, was that its finance department would not agree to the change. Applying the abuse of discretion standard with considerable skepticism, the court ruled that UBH breached its fiduciary duty of loyalty, duty of due care, and duty to follow plan terms by “adopting Guidelines that are unreasonable and do not reflect generally accepted standards of care.” [66] With respect to the final element of the breach of fiduciary claims, the court found that the breach caused harm to the plan participants. Specifically, the plan participants were harmed by “the denial of their right to fair adjudication of their claims for coverage based on Guidelines that were developed solely for their benefit.” [67]

With respect to the second claim relating to the denial of benefits, the court explained that it was applying an abuse of discretion standard with significant skepticism for the same reasons as in the breach of fiduciary claims. The court found that one condition for coverage under the plans was that coverage be consistent with generally accepted standards of care and/or standards mandated by state law. The court then found that UBH was interpreting the terms of the plans when it applied its Guidelines to the plan participants’ requests for coverage. The court then found, by a preponderance of the evidence, “that UBH’s Guidelines [as applied to plans without a state mandate] were unreasonable and an abuse of discretion because they were more restrictive than generally accepted standards of care.” [68] The court found that UBH’s application of its Guidelines in states with mandates was an abuse of discretion because the Guidelines failed to conform to the state law requirements. [69]

In its third opinion in Wit, the court addressed the relief to which the plan participants were entitled. [70] The plan participants sought four categories of relief: (1) a declaration that UBH violated plan terms requiring coverage be consistent with generally accepted standards of care and clarifying the rights of class members under the terms of the plans; (2) an order remanding coverage determinations for reprocessing using standards consistent with generally accepted standards of care; (3) injunctive relief to prevent UBH from imposing the same harm on class members in the future; and (4) appointing a special master to monitor UBH’s compliance with the court’s order. [71] Following briefing by the parties and a hearing, the court awarded the plan participants declaratory relief, [72] ordered that the any and all adverse benefit determinations be remanded to UBH for reprocessing, [73] awarded injunctive relief, [74] and announced that it would appoint, at UBH’s expense, a special master to oversee and verify UBH’s compliance with the court’s order. [75] The court subsequently awarded attorneys’ fees to class counsel in the amount of $19,628,071.88. [76]

Impact of the District Court’s Decision

Former Congressman and mental health rights advocate Patrick Kennedy described the district court’s opinion in Wit as “the Brown v. Board of Education for the mental health movement.” [77] According to Tom Britton, CEO of American Addiction Centers, the district court’s decision in Wit “rippled throughout every single state, throughout every single payer.” [78] The decision inspired similar litigation, [79] regulatory action, and even state legislation. [80] Not surprisingly, UBH disagreed with the district court’s rulings and appealed the case to the Ninth Circuit Court of Appeals. After hearing oral argument in the matter, in March 2022, the Ninth Circuit issued a very brief unpublished memorandum decision reversing the district court. [81] After a petition for rehearing was filed that was joined by a host of amicus curiae briefs from a number of prominent medical societies, provider organizations, and mental health advocates, the Ninth Circuit withdrew its memorandum decision and issued a more comprehensive ruling in January 2023 that reversed, in major part, the district court’s landmark decision and remanded the case to the lower court. [82]

The Appellate Court Decision

In its January 2023 decision, the Ninth Circuit Court of Appeals addressed UBH’s standing and class certification challenges before turning to the merits of the plaintiffs’ claims. With respect to standing, the appellate court affirmed the district court’s holding that the plaintiffs had Article III standing. [83] With respect to the class certifications challenge, the appellate court held the district abused its discretion in certifying the denial of benefits claims as class actions because the plaintiffs’ request for reprocessing was not truly the remedy that they were seeking but simply a means to that remedy. [84]

Turning to “the merits of the plaintiffs’ claims,” [85] the court first observed that UBH did not appeal the portions of the district court’s decision finding that the Guidelines were inconsistent with state mandates and thus that portion of decision remained intact. [86] The court then addressed the standard of review issue. Specifically, the appellate court affirmed the lower court’s finding that the appropriate standard of review was abuse of discretion that should be tempered by UBH’s structural conflict of interest and financial interest creating an incentive to keep costs down.[87] However, the Court of Appeals rejected the district court’s application of that standard. [88] The appellate court noted that the plans exclude treatment that is inconsistent with generally accepted standards of treatment but do not compel coverage that is consistent with generally accepted standards of treatment. Thus, according to the appellate court, the district court erred by substituting its interpretation of the plans for UBH’s standard because UBH’s interpretation was consistent with the plans’ language. [89]

The appellate court also reversed the lower court’s judgment that UBH wrongfully denied benefits based upon the district court’s finding that the Guidelines impermissibly deviate from generally accepted standards of care. [90] The court held the district court’s determination with respect to the fiduciary breach claim was also erroneous because it relied heavily on its determination that the Guidelines are not consistent with generally accepted standards of care. [91] In addition, the appellate court also found that the district court erred in excusing unnamed class members’ failure to exhaust administrative remedies. [92]

The Petition for Rehearing and Later Developments

Despite the Ninth Circuit’s rejection of most of Magistrate Judge Spero’s sweeping rulings, plaintiffs have been faring well in litigation involving healthcare coverage for behavioral health treatment. The most significant ruling issued since the Ninth Circuit’s Wit decision is D.K. v. United Behavioral Health. [93] In D.K., the Tenth Circuit castigated United for failing to “engage” with the treating doctors’ opinions. The court determined that ERISA regulations written specifically for disability benefit claims [94] requiring that plan administrators explain the basis for disagreeing with the opinions of treating doctors apply to health benefit claims as well. Thus, even under a deferential standard of review, a benefit decision will not be upheld if the administrators ignore the plaintiff’s medical evidence, even if the denial is supported by contrary evidence. That view comports with a concurring opinion in Michael J.P. v. Blue Cross and Blue Shield of Texas, [95] another case involving a denial of behavioral health coverage authored by Judge Andrew Oldham in the Fifth Circuit where the concurrence maintained that substantial evidence needed to support a claim denial must consider the entire record and not just look at whether there is some evidence in the record to support a claim denial.

Nor is the Ninth Circuit’s opinion the final word. Presently pending before the Ninth Circuit is a petition for rehearing filed by the plaintiffs with accompanying amicus curiae support from the U.S. Department of Labor, the American Medical Association, the American Psychiatric Association, the American Psychological Association, [96] the American Hospital Association, and a joint amicus brief filed by the states of Rhode Island, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, new Jersey, New York, Oregon, Vermont, Washington, and the District of Columbia (States’ Amicus). The petition for rehearing argued that the appellate panel’s ruling gave excessive deference to UBH’s claim determination and failed to acknowledge that the services at issue were all covered by the benefit plans and were consistent with generally accepted standards of care and treatment (GASC) recognized by authoritative medical societies. The petition for rehearing framed the issue as putting the determination of “medical necessity in the hands of UBH’s finance department rather than the medical community.”[97] Plaintiffs also questioned certain technical aspects of the appellate panel’s decision, such as whether each class member was required to exhaust appeals and whether the remedy ordered by the district court, which required United to reprocess over 50,000 denied claims, was an appropriate ERISA remedy.

The amicus brief filed by the states echoed the petition for rehearing in raising “the serious implications of this case for access to mental health and substance use treatment in the States and for enforcement of the rights of beneficiaries enrolled in ERISA-governed plan.” [98] The states expressed concern about the burden that will fall upon the states if people suffering from mental illness cannot get insurance coverage for treatment. “The human and financial toll associated with unmet mental illness and substance use disorder treatment is staggering. Individuals who are unable to access treatment often experience avoidable disability, encounters with the criminal justice system, poverty, worse health outcomes, and even death.” [99]

Many of the same points were echoed in the amicus brief filed by the AMA, the APA, and several allied medical societies. Those organizations expressed concern about the growing mental health crisis in the United States and warned that while the criteria for determining coverage utilized by UBH was ostensibly designed to weed out care that is not medically necessary, those criteria “are in reality far more restrictive than generally accepted standards of care, leading to denial of benefits for care that is covered (that is, not excluded) under plan terms.” [100] The medical societies also warned that permitting the use of UBH’s guidelines will perpetuate discrimination against mental illness and substance use disorders. [101] Likewise, the amicus brief filed by a consortium of other medical associations, hospitals, and mental health advocates asked, “what is the point of even having insurance if the insurer can override recommendations for covered treatment that are based on expert consensus opinions and which are made by medical professions who have first hand knowledge of their patients’ needs?” [102] The amicus brief added, “Put plainly, if insurers are permitted to deny treatment based on self-interested clinical standards rather than GASC, even fewer patients will receive adequate treatment and the mental health crisis will further worsen.” [103] The brief concluded by observing, “Neither law nor logic permits a regime that elevates an insurer’s discretionary authority above the medically necessary needs of individual patients.” [104] As of the date of this article, the petition for rehearing remains pending.

Predictions and Conclusions

It would be surprising if the Ninth Circuit were to deny the petition for rehearing and reject the request for en banc reconsideration of the Wit ruling by the entire Ninth Circuit. The importance of the issues involved, the number of people potentially affected by the outcome, and the authoritativeness of the amici who supported the petition for rehearing make it extremely difficult for the Ninth Circuit to let the existing opinion remain in place. And if rehearing is granted, it is likely that Magistrate Judge Spero’s rulings will be upheld. However, even if rehearing is denied, the mental health and substance use crisis in the U.S. is so severe that the trend in favor of increasing coverage is likely to continue unabated. The Mental Health Parity and Addiction Equity Act has established a firm public policy that stands strongly against discrimination against mental illness and substance use disorders, and represents a huge step forward in ending stigmatization of those conditions. To paraphrase a pension ruling from 35 years ago, coverage for healthcare creates rights “are too important these days for most employees to want to put them at the mercy of a biased tribunal subject only to a narrow form of “arbitrary and capricious” review, relying on the company’s interest in its reputation to prevent it from acting on its bias.” [105] The consequences of untreated mental illness and substance use disorders are too dire to tolerate placing decisions on who gets treatment in the hands of insurers that have unfettered discretion to make life and death decisions. While the die in favor of expanding coverage for treatment of behavioral health and substance use conditions has been cast, there still remains much work to be done.

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This article was first published in Bender’s Labor & Employment Bulletin (July 2023, Volume 23 • Issue No. 7) and co-authored by Mark DeBofsky, shareholder at DeBofsky Law Ltd, and Kathryn L. Moore, Stites & Harbison Professor of Law at the University of Kentucky Rosenberg College of Law.

1 Mark D. DeBofsky is a member of the law firm of DeBofsky Law, Ltd. based in Chicago, Illinois which practices primarily in the area of employee benefits law, and served as an adjunct professor at the University of Illinois-Chicago School of Law for more than 20 years.

2 Kathryn L. Moore is the Stites & Harbison Professor of Law at the University of Kentucky Rosenberg College of Law. She teaches Employee Benefits, among other subjects, and her research focuses on employee benefits law.

3 Pub. L. No. 110-343 §§ 511-512, 122 Stat. 3381 (codified at 26 U.S.C. § 9812, 29 U.S.C. § 1185a, 42 U.S.C. § 300gg-26).

4 Patrick Kennedy, “Insurance system still discriminates against mental illness. Time to fight back,” USA Today October 3, 2018. Patrick Kennedy is a former Congressman from Rhode Island and a principal author of the MHPAEA law. Kennedy is also the founder of the Kennedy Forum, an organization that promotes parity in healthcare between physical conditions and behavioral health illnesses, including substance use disorders. See, The Kennedy Forum at https://www.thekennedyforum.org/.

5 Health Policy Brief, April 3, 2014; available at https://www.healthaffairs. org/do/10.1377/hpb20140403.871424/full/healthpolicybrief_112.pdf.

6 Id.

7 29 U.S.C. § 1144(a).

8 29 U.S.C. § 1001 et seq.

9 471 U.S. 724 (1985).

10 29 U.S.C. § 1144(b)(2)

11 29 U.S.C. § 1144(b)(3).

12 Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 538 n.6 (9th Cir. 1990) (citing several insurance law treatises).

13 910 F.2d 534 (9th Cir. 1990).
14 The policy holder’s expert witness had “testified that ‘mental illness’ refers to ‘a behavioral disturbance with no demonstrable organic or physical basis…[It] stems from reaction to environmental conditions as distinguished from organic causes.” Id. at 536.

15 Phillips v. Lincoln National Life Insurance Co., 978 F.2d 302 (7th Cir. 1992).

16 Brewer v. Lincoln National Life Insurance Co., 921 F.2d 150 (8th Cir. 1990).

17 921 F.2d at 154.

18 Danca v. Emerson Hosp., 9 F. Supp. 2d 27(D. Mass. 1998).

19 See also Tolton v. American Biodyne, 854 F. Supp. 505 (N.D. Ohio 1993) (holding state law claims were preempted by ERISA)

20 Aetna Health Inc. v. Davila, 542 U.S. 200 (2004).

21 42 U.S.C. § 12181.

22 42 U.S.C. § 12182(a).

23 See, e.g., Doe v. Mut. of Omaha Ins. Co., 179 F.3d 557 (7th Cir. 1999).

24 See, e.g., Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9th Cir. 2000). Weyer was the last in a series of rulings issued by nearly every federal circuit which determined the ADA was not an available vehicle to be used to challenge discrimination against mental illness in insurance.

25 P.L. 104-204, 110 Stat. 2944.

26 29 U.S.C. §1185a(c)(1).

27 29 U.S.C. §1185a(e)(4).

28 29 U.S.C. §1185a(c)(2).

29 29 U.S.C. §1185a(e)(1).

30 29 U.S.C. §1185a(f).

31 Now known as the Government Accountability Office.32 GAO/HEHS-00-95, available at https://www.gao.gov/assets/hehs-00-95.pdf.

33 Codified at 29 U.S.C. § 1185a (ERISA § 712); 42 U.S.C. 300gg-5 (Public Health Service Act); and 26 U.S.C. § 9812 (Internal Revenue Code).

34 78 FR 68239 (November 13, 2013).

35 P.L. 111-148, 124 Stat. 119.

36 29 U.S.C. § 1132(a)(1)(B).

37 29 U.S.C. § 1132(a)(3). See, e.g., Christine S v. Blue Cross Blue Shield of New Mexico, 2019 U.S. Dist. LEXIS 220144 (D. Utah Dec.19, 2019).

38 29 C.F.R. § 2590.712(c)(4).

39 Harlick v. Blue Shield of CA, 686 F.3d 699 (9th Cir. 2012).

40 See, e.g., 29 C.F.R. § 2590.712(c)(4) Example 1.

41 See, e.g., K.K. and I.B. v. Premera Blue Cross, 2022 U.S. Dist. LEXIS 95710 (W.D. Wash. May 27, 2022) (finding requirement of an acute crisis prior to admission into a residential behavioral health treatment program was both a facial and an as-applied MHPAEA violation because no such criterion was applied to analogous medical/surgical treatment).

42 29 C.F.R. § 2590.712(c)(4) – Example 4.

43 See, mcg at https://www.mcg.com/.

44 See, e.g., Doe v. Harvard Pilgrim Health Care, Inc., 974 F.3d 69 (1st Cir. 2020).

45 For example, in Stephanic C v. Blue Cross Blue Shield of Mass. HMO Blue, Inc., 852 F.3d 105, 117 (1st Cir. 2017), the court declared: We agree that BCBS’s decision to follow its internal policy was reasonable…[T]he dispositive issue here is not whether M.G.’s course of treatment at Gateway was beneficial to him but, rather, whether that course of treatment was covered under the Plan.

46 2019 U.S. Dist. LEXIS 35205 (N.D. Cal. Mar. 5, 2019).

47 Wit v. United Behavioral Health, 58 F.4th 1080, 1088 (9th Cir. 2023).

48 58 F.4th at 1088.

49 58 F.4th at 1088.

50 2019 U.S. Dist. LEXIS 35205, *6.

51 317 F.R.D. 106, 114 (N.D. Cal. 2016).

52 317 F.R.D. at 115.

53 317 F.R.D. 106.

54 317 F.R.D. at 116.

55 317 F.R.D. at 116.

56 317 F.R.D. at 116-17.

57 2019 U.S. Dist. LEXIS 35205 (N.D. Cal. Mar. 5, 2019).

58 2019 U.S. Dist. LEXIS 35205, at **112-58.

59 2019 U.S. Dist. LEXIS 35205, at **87-88.

60 2019 U.S. Dist. LEXIS 35205, at **169-81.

61 2019 U.S. Dist. LEXIS 35205, at *186.

62 2019 U.S. Dist. LEXIS 35205, at **199-200.

63 2019 U.S. Dist. LEXIS 35205, at **204-05.

64 2019 U.S. Dist. LEXIS 35205, at *205.

65 2019 U.S. Dist. LEXIS 35205, at **208-09.

66 2019 U.S. Dist. LEXIS 35205, at *212.

67 2019 U.S. Dist. LEXIS 35205, at **212-13.

68 2019 U.S. Dist. LEXIS 35205, at *215.

69 2019 U.S. Dist. LEXIS 35205, at **215-16.

70 2020 U.S. Dist. LEXIS 205435 (N.D. Cal. Nov. 3. 2020).

71 2020 U.S. Dist. LEXIS 205435, at *7.

72 2020 U.S. Dist. LEXIS 205435, at **18-19, 181-82.

73 2020 U.S. Dist. LEXIS 205435, at **172-74.

74 2020 U.S. Dist. LEXIS 205435, at **181-82.

75 2020 U.S. Dist. LEXIS 205435, at *186.

76 Wit v. United Behavioral Health, 578 F. Supp. 3d 1060 (N.D. Cal. 2022)

77 Wayne Drash, In Scathing Ruling, Judge Rips Insurer for Putting ‘Bottom Line’ Over Patients’ Health, CNN Health (Mar. 6, 2019, 3:04 PM), https://www.cnn.com/2019/03/06/health/unitedhealthcare-ruling-mental-health-treatment/index.html.

78 Chris Larson, How Wit v. United Behavioral Health Could Impact the Future of Behavioral Health Parity (Aug. 19, 2022), available at https://bhbusiness.com/2022/08/19/how-wit-v-united-behavioral-health-could-impact-the-future-of-behavioral-health-parity/.

79 See, e.g., S.B. v. Oxford Health Insur., Inc., 419 F. Supp. 344, 362 (2019) (citing Wit with approval and holding that UBH guidelines’ focus on the “why now” factors in approving residential treatment exceeded its discretion under plan with medical necessity definition focused on “what is
necessary to treat a patient’s underlying condition”).

80 Xavier Baker & Jarrod Brodsky, Less is More: Brevity is the Soul of Wit, The National Review (Apr. 14,2022), available at https://www.natlawreview.com/article/ less-more-brevity-soul-wit. See, e.g., SB-855 § 5 (adding § 1374.721 to California Health and Safety Code requiring that medical necessity determination be based on “current generally accepted standards of mental health and substance use disorder care”).

81 2022 U.S. App. LEXIS 7515 (9th Cir. Mar. 22, 2022). 82 58 F.4th 1080 (9th Cir. 2023).

83 58 F.4th at 1092-1093.

84 58 F.4th at 1094-1095.

85 58 F.4th at 1095. The court described its decision as addressing the merits of the plaintiffs’ claims. In considering the merits, however, the court did not delve into the facts of the case. Instead, it just addressed proper application of the standard of review.

86 58 F.4th at 1096.

87 58 F.4th at 1096.

88 58 F.4th at 1097

89 58 F.4th at 1097.

90 58 F.4th at 1097.

91 58 F.4th at 1097.

92 58 F.4th at 1098.

93 D.K. v. United Behavioral Health, 67 F.4th 1224 (10th Cir. 2023).

94 29 C.F.R. § 2560.503-1(g)(1)(vii)(A)(i).

95 Michael J.P. v. Blue Cross and Blue Shield of Texas, 2021 U.S. App. LEXIS 28704 (5th Cir. Sept. 22, 2021) (unpublished).

96 Co-author Mark DeBofsky wrote an amicus brief in support of rehearing on behalf of the National Association for Behavioral Healthcare, American Hospital Association, American Psychological Association, American Association for the Treatment of Opioid Dependence, California Hospital Association, Federation of American Hospitals, National Association of Addiction Treatment Providers, National Council for Mental Wellbeing, and REDC Consortium (“Consortium amicus brief”).

97 Petition for Rehearing at 15.

98 States’ Amicus at 1.

99 States’ Amicus at 5.

100 AMA/APA amicus brief at 4.

101 AMA/APA amicus brief at 15.

102 Consortium amicus brief at 14.

103 Consortium amicus brief at 14-15.

104 Consortium amicus brief at 17

105 Van Boxel v. Journal Co. Employees’ Pension Trust, 836 F.2d 1048, 1052 (7th Cir. 1987).