Court Rules Against UBH in Precedent-Setting Case
The ruling sets a precedent for plans regulated by the federal mental health parity law by establishing that mental and substance use disorders are chronic conditions and should be treated by insurance companies as such.
The United States District Court for the Northern District of California handed down a decision on February 28 that United Behavioral Health (UBH/Optum), the country’s largest managed behavioral health care organization, illegally denied coverage for mental and substance use disorders based on flawed medical necessity criteria.
In the case, David Wit, et. al. v. United Behavioral Health, Chief Magistrate Judge Joseph C. Spero said in his ruling that UBH used internally developed medical necessity guidelines that comprehensively fell short of accepted standards of care to deny outpatient, intensive outpatient, and residential treatment to UBH beneficiaries. Plaintiffs in the case were individuals insured by UBH.
The court looked to clinical guidelines from APA, the American Society of Addiction Medicine, other professional associations, and the Centers for Medicare and Medicaid Services to establish the applicable standards of care. Spero outlined specific aspects of coverage that the accepted standards call for but were not met by UBH. Those items include the following:
Effective treatment requires treatment of the individual’s underlying condition and is not limited to alleviation of the individual’s current symptoms.
Effective treatment requires treatment of co-occurring behavioral health disorders and/or medical conditions in a coordinated manner that considers the interactions of the disorders and conditions and their implications for determining the appropriate level of care.
Patients should receive treatment for mental and substance use disorders at the least-intensive and -restrictive level of care that is safe and effective. The fact that a lower level of care is less restrictive or intensive does not justify selecting that level if it is also expected to be less effective. Placement in a less restrictive environment is appropriate only if it is likely to be safe and just as effective as treatment at a higher level of care in addressing a patient’s overall condition, including underlying and co-occurring conditions.
When there is ambiguity as to the appropriate level of care, the practitioner should err on the side of caution by placing the patient in a higher level of care.
Effective treatment of mental and substance use disorders includes services needed to maintain functioning or prevent deterioration.
Appropriate duration of treatment for behavioral health disorders is based on the individual needs of the patient; there is no specific limit on the duration of such treatment.
The unique needs of children and adolescents must be taken into account when making level-of-care decisions involving their treatment for mental health or substance use disorders.
The determination of the appropriate level of care for patients with mental health and/or substance use disorders should be made on the basis of a multidimensional assessment that takes into account a wide variety of information about the patient.
“Having reviewed all of the versions of the Guidelines that Plaintiffs challenge in this case and considered the testimony of the witnesses addressing the meaning of the Guidelines, the Court finds, by a preponderance of the evidence, that in every version of the Guidelines in the class period, and at every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions,” Spero wrote. “[I]n 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.”
This case is significant for mental health patients and providers who have long advocated for the use of medical necessity guidelines developed by professional organizations rather than those created by the insurance industry. A crucial finding with implications for plans that are subject to the federal Mental Health Parity and Addiction Equity Act is that mental and substance use disorders are to be treated like other chronic conditions.
As Spero wrote in his decision, “Many mental health and substance use disorders are long term and chronic. While current symptoms are typically related to a patient’s chronic condition, it is generally accepted in the behavioral health community that effective treatment of individuals with mental health or substance use disorders is not limited to the alleviation of the current symptoms. Rather, effective treatment requires treatment of the chronic underlying condition as well.”
Legal counsel and APA staff explained that the plaintiffs in Wit v. UBH were enrolled in self-insured plans administered by UBH. Self-insured plans, covered by the Employee Retirement Savings Insurance Act (ERISA), are exempt from the federal parity law. However, the court recognized that mental and substance use disorders are chronic illnesses and rejected the insurers’ practice of treating only the acute symptoms. This establishes a precedent for plans covered by the parity law requiring that they pay for continued treatment for mental and substance use disorders as they would any other chronic illness.
“We know that insurance companies and behavioral health managed care companies are using internally created medical necessity guidelines to deny patients care, and in plans subject to the federal parity law, these guidelines are being used to circumvent the law’s requirements,” said APA President Altha Stewart, M.D. “The decision by the district court in California is an important one and a victory for our patients. APA will continue to work to see that insurance companies do the right thing by treating mental illness and substance use disorders as the chronic conditions we know them to be.” ■
The decision can be accessed here.