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Diana L. Courson

Classes Certified in ERISA Lawsuits Against United Behavorial Health

September 20, 2016

The United States District Court for the Northern District of California yesterday certified a class of plaintiffs in each of two companion lawsuits against United Behavioral Health (UBH). In Wit et al. v. UnitedHealthcare et al. and Alexander et al. v. United Behavioral Health, plaintiffs allege that UBH systematically denies coverage for mental health treatment by developing and applying “medical necessity” criteria that are far more stringent than generally accepted standards of care.

“This order represents a tremendous step forward in the fight to force insurers to live up to their obligations to insured patients who suffer from mental health and substance abuse issues,” said Zuckerman Spaeder partner D. Brian Hufford, lead counsel for the plaintiffs. “The court has affirmed our belief that health insurers can be held responsible, on a class-wide basis, for their systematic denial of mental health coverage. This class certification is important because few (if any) patients have the resources necessary to individually challenge this type of industry-wide misconduct.”

The plaintiffs’ health plans, governed by the Employee Retirement Income Security Act (ERISA), require UBH to evaluate medical necessity according to generally accepted standards of care. UBH’s proprietary medical necessity criteria purport to reflect these standards. However, the plaintiffs allege that a push for profits has led UBH to develop criteria that overemphasize acute mental health and substance use disorder symptoms and disregard chronic or complex conditions that require ongoing care, in contravention of generally accepted standards.

UBH is a subsidiary of UnitedHealth Group and is the country’s largest managed behavioral health care organization, serving more than 60 million members.

Zuckerman Spaeder and Psych-Appeal, Inc. have been appointed class counsel by the federal court and also represent plaintiffs in similar cases against Health Care Service Corporation (Blue Cross and Blue Shield of Illinois, Texas, New Mexico, Montana and Oklahoma), Magellan Health Services of California and Blue Shield of California.

Leading Zuckerman Spaeder’s efforts are partners D. Brian Hufford, Jason Cowart and Caroline Reynolds, who have pioneered unique applications of ERISA to hold insurance companies accountable for the internal rules and procedures that drive so many decisions affecting patient health and provider reimbursements. This work has led to precedent-setting wins for health providers and two of the largest settlements of ERISA benefit class actions in history. Their work on behalf of mental health patients has gained high-profile support, including from the Department of Labor and former U.S. Rep. Patrick Kennedy.