According to AARP, 200 million health insurance claims are rejected each year for a variety of reasons. However, on March 5, 2019, a federal judge in the Northern District of California found that United Behavioral Health (UBH) unlawfully denied treatment to tens of thousands of insureds. Specifically, Chief Magistrate Judge Spero ruled UBH used profit-driven guidelines to deny mental health and substance abuse treatment coverage. The much-anticipated ruling came after a 10-day bench trial of a class action lawsuit. The lawsuit alleged that UBH’s actions violated the Employee Retirement Income Security Act (ERISA) of 1974.
Specifically, the Plaintiffs claimed that from 2011 to 2017, UBH created and used overly restrictive guidelines to arbitrarily deny coverage to individuals seeking residential mental health and substance abuse treatment. The trial testimony indicated that UBH’s guidelines only approved coverage for “acute” mental health and substance abuse episodes. The guidelines, however, do not allow treatment for members’ underlying conditions.
The major issue in the case turned on whether UBH’s guidelines were more restrictive than generally accepted standards of care such as the APA Clinical Practice Guidelines. As such, the Court relied heavily on expert testimony. Interestingly, the Court stated that UBH’s experts “had serious credibility problems.” The Court stated the following about one of UBH’s experts, “[w]hile some of Dr. Triana’s testimony was credible, his testimony that UBH does not consider benefit expense (sometimes referred to as “Benex” or “Ben Ex”) when it develops Guidelines was not credible in light of evidence and testimony introduced at trial, . . . showing that financial considerations have played a significant role in the development of the Guidelines through the relevant class periods.” Additionally, the Court admonished the company’s medical directors for being “deceptive” under oath.
Ultimately, the Court agreed with the Plaintiffs that UBH’s guidelines were “unreasonable and an abuse of discretion because they were more restrictive than generally accepted standards of care.” Additionally, the Court found UBH liable with respect to the Plaintiffs’ Denial of Benefits Claims. During the next phase of the litigation, the Plaintiffs must identify what relief they believe is appropriate. UBH will have a chance to respond to any relief sought by Plaintiffs. A final decision is expected later this year.
If you feel that your insurance claim has been unlawfully denied and would like to talk further about it, we urge you to contact a lawyer to discuss your rights. Lawyers in our firm’s Consumer Fraud & Commercial Litigation Section handle these cases and will be glad to talk with any person. You can contact Leon Hampton for more information or to discuss a potential claim.
