APA Files Amicus Brief Backing Lawsuit on Parity Violations

APA is supporting the New York State Psychiatric Association (NYSPA) appeal of a lower court decision in NYSPA’s lawsuit on behalf of member psychiatrists and their patients against United Behavioral Health for alleged violations of the federal parity law, which is part of the ERISA statute.

In an April 21 “friend of the court” brief filed with the U.S. Court of Appeals for the Second Circuit, APA supports NYSPA’s claim that it has legal standing to take action on behalf of its member psychiatrists and their patients. An earlier decision from a lower court said that NYSPA did not have legal standing in the case, ruling that only the patients could bring the claim under the ERISA statute.

The original lawsuit was brought by NYSPA and several individual patients, a member psychiatrist, and a psychologist in March 2013 alleging that UnitedHealth Group and subsidiaries, including United Behavioral Health, systematically violated the federal parity law and the Affordable Care Act. The class action, filed in the U.S. District Court for the Southern District of New York, was brought on behalf of three beneficiaries. NYSPA joined the suit on behalf of its members and their patients.

At that time, Seth Stein, J.D., executive director of NYSPA, told Psychiatric News that the district branch had fielded numerous complaints from its members about denial of mental health and substance use treatment by United (Psychiatric News, April 5, 2013).

At issue in last month’s appeal are three questions: whether United, as a third-party administrator on behalf of a self-insured company, can be held liable under the ERISA law or whether the self-insured employer must itself be named as the defendant; whether NYSPA as a professional member association has legal standing in the case to act on behalf of its members; and whether psychiatrists have legal standing to act on behalf of their patients who have an insurance-related claim under ERISA.

APA, in its amicus brief, focuses on the second and third questions, emphasizing that associations have traditionally been permitted to represent their members’ interest in litigation that is consistent with the mission of the association and that psychiatrists should be able to represent the interest of their patients for two reasons: because they have an “assignment of interest” from the patient (referring to the reimbursement and other policies set by the insurer) and because the nature of mental illness, and the stigma that can surround it, may make it difficult or impossible for patients to act on their own behalf.

“Our argument is that in the narrow area of mental illness, because of stigma and because of the nature of the illness itself, patients may be unable to speak for themselves,” Colleen Coyle, J.D., general counsel for APA, told Psychiatric News. “The special relationship between doctors and their patients allows them to represent the interest of individuals who otherwise, because of their illness, may be disinclined or unable to act for themselves.”

In its brief, APA states: “Psychiatrists have third-party standing to assert claims on behalf of their patients because: they suffer injury themselves; they stand in a ‘close relationship’ with the patients on whose behalf they seek to litigate; and those patients face ‘some hindrance to. . .asserting their own rights.’ ”

The district court, in its earlier ruling, held otherwise, in part because it determined that mental health and substance use disorder patients face “no hindrance to [their] ability to bring suit themselves.”

In its response to that decision, APA states, “That determination fails to recognize that social stigma and the inherent incapacities associated with mental health and substance use disorders constitute a substantial and often insurmountable obstacle to patients’ efforts to vindicate their own rights through litigation. These deterrent effects are supported by the scientific literature and have long been recognized by the courts. As a result, just as courts have recognized the third-party standing of nonpsychiatric doctors to litigate on behalf of patients, courts also have recognized the standing of psychiatrists to do the same.”

Further, APA’s brief states that

“[p]rofessional associations of psychiatrists like appellant NYSPA and amicus APA in turn have associational standing on the basis of the standing of their psychiatrist members, because their members would otherwise have standing to sue in their own right; the interests they seek to protect are germane to the organization’s purpose; and neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”

APA and NYSPA are supported in the suit by the AMA, which also filed an amicus brief. The AMA brief states, “The complaint here alleges systematic violations of federal and state law. These violations have injured members of NYSPA and their patients. The patients suffer social stigmas and other obstacles preventing their remedying these violations except through the aid of their psychiatrists. Due to the pervasive nature of the violations, an association of psychiatrists can and should lead the legal effort to right those wrongs.”

Also filing in support of NYSPA is the Department of Labor and former member of Congress Patrick Kennedy, one of the authors of the parity law. Both assert that Congress never intended third-party entities, such as an insurance company that is hired by self-insured companies—and that makes all decisions about employees’ options for medical and mental health treatment—to be exempt from legal liability. ■