Appeals court overturns ruling against UnitedHealth in landmark mental health parity class action

A federal appeals court has overturned a lower court's ruling against a UnitedHealth subsidiary over behavioral health coverage denials.

A district court judge ruled in 2019 that United Behavioral Health committed "pervasive and long-standing violations" of the Employee Retirement Income Security Act by denying thousands of claims to protect its bottom line between 2011 and 2017. The company was ordered to reprocess all of the claims included in the lawsuit as well as reform its protocols for processing claims.

Advocates called the ruling a landmark decision for mental health parity.

However, the 9th Circuit Court of Appeals ruled this week that United Behavioral Health followed plan terms in issuing the coverage denials in question.

The initial case encompassed two consolidated class action suits that claimed United Behavioral Health had a conflict of interest as denying claims allowed it to boost profits, and the district court agreed.

However, the 9th Circuit argued that the company does not have to cover every service as long as it follows generally accepted standards of care. The plaintiffs did not prove that the plans in question mandate coverage for all services under generally accepted standards of care, according to the order.

"Even if UBH has a conflict of interest because it serves as plan administrator and insurer for fully insured plans that are the main source of its revenue, this would not change the outcome on these facts," the court said.

A similar class-action suit for more recent claims was filed late last year.