Class Action Complaint: UnitedHealthcare Violated Federal Mental Health Parity Law

Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...

May 23 — UnitedHealthcare Insurance Co. and United Behavioral Health are “systematically and improperly” denying claims for mental health and substance-abuse related health benefits in violation of federal mental health parity law, a new class action complaint alleged .  

According to the complaint, these benefit denials are motivated by a desire to avoid the “often high costs associated with the treatment of chronic conditions.”

The complaint, filed May 21 in the U.S. District Court for the Northern District of California, seeks class treatment for three proposed classes of health plan participants and beneficiaries who were denied coverage for nutritional counseling or for residential treatment for mental health or substance use disorders.

A spokesperson for UnitedHealthcare told Bloomberg BNA May 23 that the company is currently reviewing the complaint.

‘Restrictive' Internal Policies

The complaint was filed by three individuals who had been denied coverage for mental health and/or substance abuse treatment by Employee Retirement Income Security Act-governed health plans administered by UnitedHealthcare.

They accused the insurer of violating the federal Mental Health Parity and Addiction Equity Act of 2008 in two broad ways.

First, they alleged that UnitedHealthcare routinely violated plan terms covering mental health benefits by adjudicating claims “based on internal practices and policies that are much more restrictive than those generally accepted by the mental health community.”

Second, they argued that the insurer violated the federal parity act by imposing “disparate and more restrictive internal policies and practices” to claims for mental health and substance abuse benefits.

According to the plaintiffs, UnitedHealthcare's internal policies effectively provided that coverage would be denied for residential treatment if a lower level of treatment would be safe, regardless of whether it would be similarly effective. Further, they contended that the internal guidelines focused on “acute changes” in claimants' circumstances and failed to properly account for “chronically severe impairments.”

The guidelines also provided that coverage for residential treatment will be denied unless a claimant can show that he or she will imminently suffer a “significant deterioration in function,” the plaintiffs argued.

These “restrictive” guidelines discriminate against patients with mental illness, the plaintiffs asserted, because they aren't imposed upon patients seeking coverage for medical or surgical benefits. Further, they aren't in line with generally accepted standards for assessing appropriate levels of mental health care, the plaintiffs argued.

The complaint was filed by Psych-Appeal Inc., Zuckerman Spaeder LLP and the Maul Firm P.C.

Text of the complaint is at http://www.bloomberglaw.com/public/document/Wit_et_al_v_UnitedHealthcare_Insurance_Company_et_al_Docket_No_31.