Zuckerman Spaeder Files Class Action Complaint Against UnitedHealth Group for Violation of Mental Health Parity Laws

Zuckerman Spaeder LLP, and Psych-Appeal, Inc. today filed a class-action complaint in the U.S. District Court for the Eastern District of New York, alleging that UnitedHealth Group Inc. and its Oxford subsidiaries (“UnitedHealth”) have systematically violated the legal duties owed to plan participants by imposing arbitrary reimbursement penalties on psychotherapy rendered by psychologists and master’s level counselors.

The complaint was filed by Zuckerman Spaeder partners D. Brian Hufford, Jason Cowart, and Carlos Angulo, along with co-counsel Meiram Bendat from Psych-Appeal, Inc., on behalf of an individual insured by UnitedHealth (“the plaintiff”) and a class of claimants who have similarly been subject to arbitrary reimbursement penalties. This case is part of Zuckerman Spaeder’s ongoing effort to defend the rights of behavioral health patients from improper denials and discrimination by health insurers.

The dispute in this lawsuit concerns the amount UnitedHealth would pay for plaintiff’s covered treatment for her eating disorder, which included individual and family counseling from a psychologist with 17 years’ experience and a Licensed Clinical Social Worker (LCSW) with post-graduate training. These providers are considered out-of-network, and therefore benefits are determined based on an “allowed amount,” which is the maximum amount eligible for reimbursement.

The plaintiff in this case alleges that UnitedHealth has a policy in place that reduces the “allowed amount” of covered charges by 25 percent when provided by a psychologist and 35 percent when provided by a master’s level counselor (i.e., an LCSW). As a result, anyone receiving psychotherapy services from a psychologist or social worker is subject to reduced reimbursements. The plaintiff argues that these arbitrary reimbursement penalties violate the Federal Parity Act, the Affordable Care Act and Timothy’s Law (the New York Parity Act) by discriminating against certain behavioral health providers and patients.

“We believe it is clear that UnitedHealth violated its duty to plan holders by imposing arbitrary reimbursement penalties,” said lead counsel for the plaintiff, D. Brian Hufford. “Through these penalties, UnitedHealth is devaluing psychotherapy and is ultimately limiting access to an essential health benefit.”

“We also believe that this is another example of private insurance companies taking steps to systematically deny mental health benefits to plan holders,” said Cowart, co-counsel for the plaintiff. “The purpose of this lawsuit is to continue our efforts to hold insurers accountable for this type of discriminatory behavior.”

Zuckerman Spaeder has developed a national practice representing patients and health care providers such as doctors, hospitals, and medical equipment companies in disputes with health insurance companies. Their groundbreaking application of ERISA and other related federal and state laws has resulted in numerous precedent-setting wins, including two of the largest recoveries ever obtained in health insurance class actions.

Psych-Appeal, Inc. is a Los Angeles-based law firm exclusively dedicated to mental health insurance claims, advocating on behalf of patients, clinicians, and treatment facilities.

Copies of the complaint can be obtained by contacting Lori Duignan of Zuckerman Spaeder at lduignan@zuckerman.com.