After Delivering Landmark Win for Mental Health Patients, Judge Orders UnitedHealth to Reprocess Over 50,000 Claims and Reform Claims Handling

D. Brian  Hufford
Brian Hufford
Jason S. Cowart_bio
Jason Cowart
Caroline E. Reynolds_bio
Caroline Reynolds

Zuckerman Spaeder Continues Mental Health Parity Legal Fight; Says Government Action is Needed

Following a ruling last year that United Behavioral Health (UBH), a subsidiary of UnitedHealth Group (NYSE: UNH), illegally denied tens of thousands of mental health and substance use disorder coverage claims, a federal court has provided plaintiffs with the full extent of relief available under the law. UBH must now reprocess the claims in question, reform its handling of behavioral health claims, and improve employee training. The court also says it will appoint a Special Master to oversee the reprocessing and reforms. 

Zuckerman Spaeder partner Caroline E. Reynolds, who led the case through trial and the remedy phase, said, “Today’s ruling imposes as strong a remedy against UBH as the law allows and delivers everything the plaintiffs asked for. The class members will get the relief they deserve and United has been forced to change its dangerous and self-serving behavioral health practices.”

D. Brian Hufford, who heads up Zuckerman’s health insurance practice and has overseen the case from its inception along with partner Jason S. Cowart, commented, “The nation’s largest insurer has been exposed for deliberately limiting coverage, knowing thousands of people would be left with inadequate or incredibly expensive care, or no care at all. But the real shock of this case is that it’s actually not much of a shock at all. For-profit insurers have been blatantly discriminating against mental health patients for years, while facing virtually no government scrutiny.”

Chief Magistrate Judge Joseph Spero of the U.S. District Court for the Northern District of California, who also presided over last year’s trial, explains in today’s ruling that the case “arises out of pervasive and long-standing violations of ERISA” in which “UBH denied mental health and substance use disorder treatment coverage…using internal guidelines that were inconsistent with the terms of the class members’ health insurance plans. UBH engaged in this course of conduct deliberately, to protect its bottom line. To conceal its misconduct, UBH lied to state regulators and UBH executives…deliberately attempted to mislead the Court at trial...”

In his order, Judge Spero says he will appoint a Special Master to oversee all ordered reforms and requirements, and that UBH must “proceed diligently with reprocessing” plaintiffs’ claims and complete the process within one year. The company must also reform its claims processing so that coverage decisions are based on generally accepted standards of care and, with the oversight of the Special Master, implement a training program for all personnel with input into clinical coverage determinations.

“This relief can’t undo the pain United inflicted on thousands of adolescents and adults, but it will give them meaningful help and offer new hope for all who suffer from mental illness or addiction,” Ms. Reynolds continued. “This case should serve as a strong warning to all insurers that the courts are recognizing their discriminatory schemes and it’s time to clean up their act.”

Under ERISA, plaintiffs have the right to recover benefits owed to them and to force administrators like UBH to correct their illegal behaviors. The statute does not provide plaintiffs with the ability to collect punitive monetary awards.

During last year’s trial, the court considered two consolidated lawsuits—Wit, et. al. v. UnitedHealthcare et. al. and Alexander, et al. v. United Behavioral Health—brought by Zuckerman Spaeder and co-counsel Meiram Bendat of Psych-Appeal, Inc. The lawsuits argued that tens of thousands of UBH’s behavioral health coverage decisions were being made based on intentionally flawed internal guidelines. The March 5th, 2019 ruling against UBH was a landmark mental health decision and a resounding win for the more than 50,000 plaintiffs.

Wit/Alexander is at the vanguard of the firm’s nationwide effort on behalf of clients to force insurer compliance with their fiduciary duties under federal law.  This work is led by Messrs. Hufford and Cowart, and their trial team included Carl S. Kravitz, Aitan D. Goelman, and Adam Abelson, along with Ms. Reynolds.

“Last year’s breakthrough win has fueled our ongoing efforts to force health insurer accountability, but private legal action alone can’t deliver systemic change,” Mr. Hufford said. “The spotlight is now squarely on political leaders and regulators. Only with the weight of government can we hope to make certain insurance companies finally and fully live up to their legal and moral responsibility.”

Under the direction of Mr. Hufford, Mr. Cowart, and Ms. Reynolds, Zuckerman Spaeder has achieved several other class certifications, delivered multiple settlements, and is pursuing additional mental health-related lawsuits against insurers. The mental health effort is part of a national practice representing patients and health care providers in disputes with health insurance companies. The firm’s cases have received high-level support from former U.S. Representative Patrick Kennedy and the U.S. Department of Labor, which has filed four amicus briefs supporting Zuckerman Spaeder cases in the Second, Third, Fifth and Eighth Circuit Courts of Appeals, with the firm obtaining successful decisions each time. 

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Kalie Walrath
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