Ruling in California Lawsuit Could Boost Access to Care

APA is carefully watching the progress of a lawsuit working its way through federal courts in California, a case that addresses how one large insurer authorized care for patients with mental health diagnoses but that could have broader implications for psychiatrists and their patients everywhere.

A federal judge granted class certification to plaintiffs in two related cases that “improperly denied coverage for mental health and substance use disorder treatment” to patients by applying nonquantitative restrictions.

The September 19 decision might seem merely procedural, but if it is ultimately decided in favor of the plaintiffs, it could bolster parity and lead to changes in how insurance companies operate.

Chief Magistrate Judge Joseph Spero of the Northern District of California ruled that the complaint against United Behavioral Health (UBH) could go ahead as a class action suit. (UBH operates in some areas as Optum or OptumHealth.) The plaintiffs had argued that UBH had “improperly denied [them] coverage for mental health and substance use disorder treatment” by using overly restrictive guidelines that were not “consistent with generally accepted standards of care.”

Among other points, the court noted that UBH’s guidelines focused on the patients’ presenting problems rather than their underlying mental health conditions, failed to provide coverage for treatment of chronic conditions in the absence of an acute crisis, and did not include prevention of deterioration as a goal for covered treatment.

The final story may be bigger than one company, however. As many as 3,000 health insurance plans and millions of potential beneficiaries may be affected by the class action, according to the judge’s order.

“This creates an opportunity to make systemwide changes across multiple health care plans, even for people who are not parties to the litigation,” said Colleen Coyle, J.D., APA’s general counsel.

Cases like these ordinarily require individuals to bring suit for perceived injustices, explained Coyle. When handled one by one in the courts, they rarely have a widespread impact on practice, even with rulings in the plaintiff’s favor. Achieving class action status means that individuals don’t have to litigate separately, and the full class can benefit from the decision.

The next step in this case will be discovery, during which attorneys for each side gather evidence. Then the plaintiffs will have to prove their case in court.

APA for the moment is simply following the case. It has filed friend of the court briefs in other significant cases but can only do so during an appeal, said Coyle.

“APA supports resolving issues relating to the Mental Health Parity and Addiction Equity Act [MHPAEA] in a class action, group, or representative plaintiff manner because many of the MHPAEA violations we see are based on nonquantitative treatment limitations that the plans apply to all mental health patients and not merely to single individuals,” said Marvin Swartz, M.D., a professor of psychiatry and behavioral sciences at Duke University School of Medicine and chair of APA’s Committee on Judicial Action.

Lack of funding has limited enforcement of MHPAEA by federal and state agencies, said Swartz.

“Collective actions would allow private MHPAEA enforcement in a more uniform manner, encourage MHPAEA compliance across the United States, and provide mental health and substance use disorder patients the insurance coverage that they paid for and desperately need,” he said. ■