UnitedHealth Group recently lost a large class action suit alleging that it violated federal law by failing to provide adequate mental health coverage for its insured patients. A federal judge ruled against the insurer in a landmark case brought by approximately 50,000 plaintiffs. The plaintiffs received denials of treatment by United when seeking help for behavioral and substance abuse issues. While United will likely appeal the decision, this may lead to further lawsuits against insurers for failure to provide the necessary mental health coverage.
In 2008, Congress passed a law called the Mental Health Parity and Addiction Equity Act, mandating that insurers afford the same treatment to illnesses of the brain as they would to illnesses of the body. This meant that depression or addiction should receive the same level of coverage as diabetes or cancer. Insurers could not impose less favorable benefit limitations for mental health than they would for medical and surgical benefits.
The lawsuit alleged that United was making coverage decisions based on internal guidelines that were designed to maximize profits at the expense of coverage. The judge agreed with the plaintiffs, holding that the internal care considerations were unreasonable and “infected” by a financial motive. The judge explained that United was not fully complying with the statute that placed mental health on par with physical health.
United violated the law by authorizing coverage only for “acute” instances of mental health distress. Routine care, such as therapist visits, were not always covered by the insurer. Over a six-year period, United denied claims for residential and outpatient treatment. The court found that United improperly intervened to reduce the level of care afforded to certain patients. For example, if the patient was in residential care, United mandated that they receive outpatient care to lessen the financial commitment of the insurer. The insurer included individuals from its finance departments on the panels that were making coverage decisions, evidencing an improper financial motives in its decisions.
The lawsuit was brought under the Employee Retirement Income Security Act of 1974. This statute imposes a fiduciary duty for employer sponsored health insurance plans. United violated this duty when it denied employees and their families the necessary treatment. The court’s holding does not apply beyond those who have group health insurance policies from private employers. The judge also found that United was in violation of certain state laws as well.
The lawsuit is significant going forward as there may have been other insurers following the same practices as United. The judge’s holding is a landmark decision that may alter the legal landscape for insurers going forward. The implications will be felt by other insurers.
It is likely that United will attempt to appeal the ruling given the financial impact that it will have on the insurer. For now, United awaits a ruling from the judge as to what the appropriate remedies are given that the court has found United to be liable for its actions. Companies will now know that their decisions as to whether or not to cover mental health services are subject to judicial review, and they can be held liable if they fail to uphold law and regulation in reaching these decisions. Given the precedent that has been set, there may be additional class action lawsuits against other insurers for similar practices. Anyone who has been denied mental health coverage should contact an attorney at The Law Offices of Sadaka Associates to discuss their legal rights, including a possible claim against the insurer that denied coverage.
Learn more about Drug Safety News.