UBH Ruling Called an Enormous Victory for Patients, Wake-Up Call to Insurers

The 10-year injunction issued in October against United Behavioral Health (UBH) by a federal district court in the case Wit v. UBH is a landmark opportunity to improve patient care, implement mental health parity, and address health disparities, said one expert witness in the case.

“Effective treatment must address more than the limited crisis intervention that insurance companies pay for in outpatient treatment,” said Area 1 Trustee Erik Plakun, M.D. He testified on behalf of plaintiffs in the case, alleging that the behavioral health managed care company had withheld coverage of necessary care in violation of parity laws.

“Clinicians have known this for years when we would get insurance denials for treatment we recommended because the patient was no longer in crisis—as if we were fools for thinking more was needed,” Plakun said. “Now a federal judge has said we were right all along.”

Judge Joseph Spero of the United States District Court for the Northern District of California ruled that UBH must use medical necessity criteria and assessment tools developed by nonprofit mental health and substance use disorder specialty organizations when making coverage-related determinations. The 10-year injunction also includes a requirement that UBH personnel be trained in the use of the court-ordered medical necessity criteria and that UBH reprocess nearly 67,000 mental health and substance use disorder benefit claims over the next year (see Psychiatric News).

“The verdict shows us that we need not abdicate to insurance companies the authority to assert what generally accepted standards of care are,” Plakun told Psychiatric News. “Before the verdict in Wit, insurance companies just set the standards, and no one had the power to call them out on the flaws in their version of generally accepted standards. Now the verdict states their standards are unlawful and put UBH financial interests over the needs of patients, which was a breach of fiduciary duty.”

Meiram Bendat, J.D., attorney for plaintiffs in the case, agreed. “This case was brought under federal ERISA law, which states that entities and individuals who administer benefit plans are fiduciaries—meaning that they owe duties of loyalty and care to the beneficiaries of the plan.”

Bendat said the judge found that over a seven-year period, UBH had acted not on behalf of the beneficiaries but in the interest of the company’s profits. “That’s a really critical piece—that UBH needs to keep in mind for whose benefit it is adjudicating claims when making coverage determinations.”

The injunction requires a “special master” to oversee training of UBH personnel in their role as fiduciaries and in the use of accepted medical necessity criteria developed by nonprofit mental health and substance use disorder specialty groups. The injunction requires UBH to use the Level of Care Utilization System (LOCUS), Child and Adolescent Service Intensity Instrument (CASII), and Early Childhood Service Intensity Instrument (ECSII)—assessment tools developed by the American Association of Community Psychiatry (LOCUS) and the Academy of Child and Adolescent Psychiatry (CASII and ECSII)—as well as criteria developed by the American Society of Addiction Medicine.

The ruling is the “remedy” phase of the case resulting from the court’s decision signed on February 28, 2019 (see Psychiatric News). The court held that UBH had illegally denied coverage for mental and substance use disorders based on flawed medical necessity criteria. Those denials impacted more than 50,000 UBH enrollees and involved 67,000 claims for coverage across four states: Connecticut, Illinois, Rhode Island, and Texas.

“Once the training is complete, UBH is required to reprocess the 67,000 claims using the new criteria,” Bendat said. “If UBH determines the claims were medically necessary, it is required to issue payments to the plaintiffs for those claims plus legal interest.”

Bendat and Plakun said the wider implications for behavioral health managed care companies and patients everywhere are profound.

“It’s a massively important ruling for all behavioral health managed care organizations because the ruling articulates the generally accepted standards of care for making coverage determinations and lays out the consequences when an insurer [deviates from those standards],” Bendat said. “Those standards are severe.”

(He helped to write California SB 855, now a law, which requires all California insurers to use the medical necessity criteria outlined in the ruling beginning in January 2021. See Psychiatric News)

Plakun said he believes that the same medical criteria outlined in Wit v. UBH should apply to the Affordable Care Act, Medicaid, and Medicare plans. “This would help to address health disparities since many minorities are covered by these plans,” he said.

He added, “The basic take-home message to psychiatrists is ‘When you thought insurance companies had a totally different sense from you of what patients needed in treatment, you were right—and they were wrong and acting unlawfully.’ That’s an important message for psychiatrists to hear.” ■