Approximately 50 percent of Americans receive health insurance through their employer, making most of those plans subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). After passage of the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”), the majority of health plans that cover mental health treatment, including large employer- sponsored plans, must do so in parity to medical/ surgical treatments. The Patient Protection and Affordable Care Act (“ACA”) also requires that small group plans (in addition to individual plans) cover “essential health benefits,” including treatment for mental health and substance use disorders.
Nonetheless, and until recently, expanding coverage for mental health and substance use disorder treatment has been difficult. In a groundbreaking case filed in the Northern District of California, Wit v. United Behavioral Health, Federal Magistrate Judge Joseph C. Spero presided over a class action alleging that United Behavioral Health (“UBH”) breached its fiduciary duties under ERISA in its administration of mental health treatment claims. A claim for benefits was also brought under ERISA. Following a 10-day bench trial, Magistrate Judge Spero found UBH liable on both claims. The district court determined that UBH breached its fiduciary duties by implementing guidelines for making coverage determinations for mental health treatment that were inconsistent with generally accepted standards of care and “tainted by UBH’s financial interests.”
The district court also found that UBH violated the laws of certain states, including Illinois. For those claims, a class was certified for plan members of fully insured health plans governed by both ERISA and state law. Illinois law requires that all “[m]edical necessity determinations for substance use disorders shall be made in accordance with appropriate patient placement criteria established by the American Society of Addiction Medicine,” and that “[n]o additional criteria may be used to make medical necessity determinations for substance use disorders.” Yet, Magistrate Jude Spero determined that UBH’s guidelines for substance use disorder treatment claims deviated from the ASAM criteria “in a multitude of ways,” and thus were not compliant with the “level-of-care” criteria mandated by Illinois law. As noted by the district court, “[t]he American Society of Addiction Medicine (“ASAM”) is a society of physicians and other professionals who specialize in the treatment of substance use disorders;” and “[t]he ASAM Criteria are the most widely accepted articulation of the generally accepted standards of care for how to conduct a comprehensive multidimensional assessment of a patient with substance related disorder, translate that into patient treatment needs and match those needs to the appropriate level of care.” The district court also stressed that UBH decided not to adopt the ASAM Criteria despite its consulting specialists’ recommendations to do so, which was a “telling example of the emphasis UBH placed on financial considerations in its decision making with respect for the Guidelines.” While this case is far from over, the decision issued by the district court should help expand access to mental health care for those covered under group healthcare plans, particularly in Illinois.