The availability of health insurance coverage for treatment of mental health conditions recently took a huge step forward with the entry of judgment by the U.S. District Court for the Northern District of California in Wit v. United Behavioral Health.
After the issuance of a ruling in 2019 finding United Behavioral Health, or UBH — a UnitedHealth Group Inc. subsidiary — liable for wrongfully denying benefits on a classwide basis, in its most recent decision, the court imposed wide-ranging remedies that included an order requiring that UBH reconsider at least 50,000 denied claims.
The underlying decision, which was reiterated in the court’s judgment, was that UBH, which also does business as OptumHealth Behavioral Solutions, engaged in “pervasive and long-standing violations of [the Employee Retirement Income Security Act].” Specifically, the court determined that UBH used “overly restrictive guidelines to make coverage determinations.”
After the court held a bench trial, the court distilled several generally accepted standards of care applicable to behavioral health and substance use disorder treatment from the expert testimony that had been presented. Those standards enumerated various aspects of behavioral treatment, particularly with respect to subacute residential treatment that have presented the greatest disparities between recommended treatment and insurance reimbursement.
Such situations arise when patients require a high level of supervision and monitoring but at a lower level of acuity than hospitalization would entail. Many of those claims relate to eating disorders, substance use disorders and adolescent behavioral disorders.
After enumerating recognized standards of care, the court articulated how the reimbursement guidelines developed and used by UBH deviated from those standards. For example, the key findings criticized UBH for focusing on managing symptoms without addressing underlying medical conditions.
The court further determined that the UBH guidelines favored lower levels of care that were not geared toward effective treatment. Relatedly, the UBH guidelines were found to have neglected risks of relapse or the likelihood of decline in the event treatment were reduced to a lower level of care.
Each of the standards of care enumerated by the court, and each of the findings as to where UBH fell short, are critical in establishing Wit’s significance in addressing gaps and shortfalls in insurance coverage for mental health treatment.
Trial lawyer Rick Friedman has written and lectured extensively about how he uses the “rules of the road” in trials to address complexity, confusion and ambiguity, and how enumerating each rule that all can agree upon and then flagging each violation magnifies the deviation and builds a stronger case.
Chief Magistrate Judge Joseph Spero of the Northern District of California adopted that approach both to focus on what was wrong with the UBH guidelines that were ostensibly based on neutral and objective principles in order to both identify the problems and prescribe solutions.
The two Wit rulings are perhaps the most significant court decisions ever issued in cases involving health insurance benefits.
The court’s judgment goes directly to the heart of America’s health care system, which does not always render coverage decisions that are consistent with medical necessity and in accordance with treatment recommended by patients’ medical providers but instead has, as the Wit cases illustrate, put insurers’ profits ahead of patients’ health. The Wit rulings are also a major step toward bringing an end to the stigmatization of those with mental illness and fulfilling the promise of the Mental Health Parity and Addiction Equity Act.
Individuals with behavioral health and addiction disorders can no longer be relegated to receiving second-class treatment when it comes to their health care needs. The Wit decisions found the largest health insurer in the U.S. disregarded its contractual and fiduciary obligations to reimburse patients for medically necessary treatment.
Consequently, UnitedHealth has been ordered to reassess tens of thousands of denied claims in order to make matters right. The ruling is also forward-looking in that it bars UnitedHealth and its peers, who will no doubt take note of this ruling, from withholding reimbursement for treatment under guidelines that are inconsistent with and more restrictive than generally accepted standards of care and treatment.
The broader issue exposed in Wit extends beyond health insurance for behavioral health conditions, though. Regardless of which side of the political spectrum you may be on, the recent Wit ruling and last year’s liability ruling expose a glaring fault in America’s health care system: Private health insurers are rendering benefit decisions for over 175 million Americans in nongovernmental health care plans in a manner that may not be consistent with generally accepted standards of medical care and treatment.
Many of those insurers are organized as for-profit companies that are listed on the New York Stock Exchange. No other developed country in the world has such a system — for good reason. Profits should not dictate medical care; science should.
When illness strikes, every patient has a right to expect their doctor will recommend and implement treatment measures that are consistent with generally accepted standards of care. If not, and the patient suffers harm as a result, a noncompliant physician faces potential medical malpractice liability — but not insurance companies.
They have been immunized against such liability by U.S. Supreme Court rulings such as Aetna Health Inc. v. Davila in 2004 and Pegram v. Herdrich in 2000, which found that ERISA-governed plans are not liable for denying reimbursement for necessary medical treatment.
Is this the health care system Americans deserve? Wit decisively answers that question with a resounding no, and puts the critical decisions about the care patients need to receive back in the hands of the doctors rather than the patient’s insurance company.
This article was published in Law360 on Novmeber 25, 2020 https://www.law360.com/articles/1331626/print?section=benefits
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 2020 U.S. Dist. LEXIS 205435, 2020 WL 6479273 (N.D. Cal. November 3, 2020).
 Wit v. United Behavioral Health , 2019 U.S. Dist. LEXIS 35205, 2019 WL 1033730 (N.D. Cal. March 5, 2019).
 The court’s generally accepted standards of care include:
a. Effective treatment requires treatment of the individual’s underlying condition and is not limited to alleviation of the individual’s current symptoms.
b. Effective treatment requires treatment of co-occurring behavioral health disorders and/or medical conditions in a coordinated manner that considers the interactions of the disorders and conditions and their implications for determining the appropriate level of care.
c. Patients should receive treatment for mental health and substance use disorders at the least intensive and restrictive level of care that is safe and effective. Placement in a less restrictive environment is appropriate only if it is likely to be safe and just as effective as treatment at a higher level of care in addressing a patient’s overall condition, including underlying and co-occurring conditions.
d. When there is ambiguity as to the appropriate level of care, the practitioner should err on the side of caution by placing the patient in a higher level of care.
e. Effective treatment of mental health and substance use disorders includes services needed to maintain functioning or prevent deterioration.
f. The appropriate duration of treatment for behavioral health disorders is based on the individual needs of the patient; there is no specific limit on the duration of such treatment.
g. The unique needs of children and adolescents must be taken into account when making level of care decisions involving their treatment for mental health or substance use disorders.
h. The determination of the appropriate level of care for patients with mental health and/or substance use disorders should be made on the basis of a multidimensional assessment that takes into account a wide variety of information about the patient.
 The deviations include:
a. UBH’s Guidelines place excessive emphasis on acuity and crisis stabilization, while ignoring the effective treatment of members’ underlying conditions.
b. UBH’s Guidelines fail to address the effective treatment of co-occurring conditions.
c. UBH’s Guidelines fail to err on the side of caution in favor of higher levels of care when there is ambiguity and, instead, push patients to lower levels of care where such a transition is safe, even if the lower level of care is likely to be less effective.
d. UBH’s Guidelines preclude coverage for treatment to maintain level of function.
e. UBH’s Guidelines from 2014 to 2017 preclude coverage based on lack of motivation.
f. UBH’s Guidelines fail to address the unique needs of children and adolescents.
g. UBH’s Guidelines use an overly broad definition of “custodial care,” coupled with an overly narrow definition of “active” treatment and “improvement.”
h. UBH’s Guidelines impose mandatory prerequisites for coverage rather than determining the appropriate level of care based on a multidimensional approach.
 Friedman, Rules of the Road – available at Rules Of The Road – Friedman | Rubin PLLP – Trial Lawyers.
 See, “Health Insurance Coverage of the Total Population” at https://www.kff.org/other/state-indicator/total-population/?dataView=1¤tTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
 542 U.S. 200 (2004).
 530 U.S. 211 (2000).