A federal judge issued a stern rebuke to UnitedHealth this week over its coverage denials for people with behavioral health or substance abuse needs, and the ruling could set the stage for a major shift in the industry, experts say.
In the 106-page ruling (PDF), Judge Joseph C. Spero of the U.S. District Court in Northern California said United Behavioral Health, the company’s subsidiary that administers behavioral healthcare coverage, unlawfully deployed internal policies that amounted to discrimination against patients with these needs to cut costs.
Testimony by UnitedHealth representatives in the class action suit, which was first filed in 2014, was at times “evasive—and even deceptive,” Spero said.
“In each version of the Guidelines at issue, in this case, the defect is pervasive and results in a significantly narrower scope of coverage than is consistent with generally accepted standards of care,” Spero said.
In a statement to FierceHealthcare, UnitedHealth said it “looks forward to demonstrating in the next phase of this case how our members received appropriate care.”
“We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders,” UnitedHealth said.
The move to mental health parity has been slow-going and years in the making. The Mental Health Parity and Addiction Equity Act of 2008 aims to block insurers from hindering access to behavioral health, and the Affordable Care Act also included provisions to enhance coverage.
Though both laws are a decade old, insurers have found ways around the requirements, and state and federal oversight of access has been limited. Plaintiffs in the suit against UnitedHealth said they were often denied care as soon as they were deemed “stable,” though behavioral healthcare often requires long-term care management.
However, Tuesday’s ruling may finally mark a turning point, David Lloyd, director of policy and programs at the Kennedy Forum, told FierceHealthcare. The forum’s founder, Rep. Patrick Kennedy, spearheaded the 2008 law.
The judge’s decision puts payers on notice, Lloyd said.
“We think that these standards really need to be based on generally accepted standards of care,” he said. “We can’t have insurers basically creating their own.”
The ruling, he said, is a “major landmark in the coverage of mental health and substance use treatment across the country.”
But it’s also just one of the first steps toward the forum’s goal of mental health parity. So what’s next? The case’s 11 plaintiffs will go into the remedy phase, where they will determine what they expect as compensation for the denied claims. Lloyd said the Kennedy Forum and other advocates expect that they'll push for an end to coverage guidelines determined by the insurers themselves.
“It should not be just suppressing costs,” he said. “That is not an acceptable reason to create your own criteria.”