Ninth Circuit Overturns Behavioral Health Care Rulings That Required Insurer To Reconsider Thousands Of Claims

Ninth Circuit overturns behavioral health care rulings that required insurer  to reconsider thousands of claimsSource: San Francisco Chronicle, by Bob Egelko

A federal appeals court has overturned rulings that would have required an insurer to reconsider its denials of tens of thousands of claims for mental health, drug and alcohol care.In decisions in 2019 and 2020, Chief U.S. Magistrate Judge Joseph Spero of San Francisco said United Behavioral Health, which manages mental health services for insurance giant UnitedHealthcare, had acted “to protect its bottom line” by using its own restrictive criteria to deny claims in multiple states from 2011 to 2017. He said the company then “lied to state regulators” and made misleading statements during a nonjury trial in his court.

Spero ordered the company, under supervision by a court-appointed monitor, to reconsider about 67,000 claims from 50,000 patients, using “generally accepted standards of care” adopted by behavioral health professionals and their organizations.

But on Monday, the Ninth U.S. Circuit Court of Appeals in San Francisco said the insurance policies United Behavioral Health was administering allowed the company to use its own reasonable criteria for coverage.

“UBH’s interpretation — that the (insurance) Plans do not require consistency with GASC (generally accepted standards of care) — was not unreasonable,” the three-judge panel said.

“The Plans exclude coverage for treatment inconsistent with the GASC,” the court said. But the patients in a class-action suit “did not show that the Plans mandate coverage for all treatment that is consistent with the GASC.”

In response, UnitedHealthcare, the parent company of UBH, said in a statement, “we are pleased with the court’s ruling and continue to support our members with the mental health support they need, when they need it, as part of our broader commitment to accessible, quality care.”

Lawyers for the plaintiffs have not responded to requests for comment.

The ruling comes at a time of increasing anxiety, stress and other psychiatric impacts of the coronavirus pandemic.

The American Psychiatric Association, which filed arguments supporting the plaintiffs’ case, said it was “extremely disappointed in the Ninth Circuit’s ruling, particularly as the nation faces a mental health and substance use disorder crisis in the aftermath of COVID-19.” The group said Congress and state legislatures should pass laws based on Spero’s ruling “to ensure fair and equitable treatment of patients with mental health and/or substance use disorders and hold insurance companies accountable.”

In another filing on the plaintiffs’ side, state Attorney General Rob Bonta’s office cited a study as saying two-thirds of Californians reported they or a close family member had been denied mental health services they sought.

Other medical organizations and President Biden’s Labor Department also filed arguments supporting the plaintiffs, while the U.S. Chamber of Commerce and insurance groups argued in support of United Behavioral Health.

During the trial before Spero, a mental health professional testified for the company that its criteria for coverage were actually consistent with the generally accepted standards of care. But Spero said in his ruling that the generally accepted standards mandated treatment that was “reasonably necessary” to keep a patient’s mental health from declining, while United Behavioral Health required “compelling evidence” that the treatment was needed.

The company’s policies favored “crisis stabilization” and did not provide coverage once a mental health crisis had passed, even though the underlying condition still existed, Spero said. He said its practices showed that “its financial self-interest was a critical consideration.”

But the appeals court said that even if the company had a financial conflict of interest, it was entitled to use its own standards under the terms of the insurance plans. The court said Spero should not have substituted his own “interpretation of the Plans for UBH’s.”

The panel consisted of Judges Morgan Christen and Danielle Forrest and U.S. District Judge Michael Anello of San Diego, temporarily assigned to the appeals court.

Last Updated 05/25/2022

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