Last month, a federal court in the Northern District of California found that the giant health insurer United Behavioral Health had been using flawed criteria, contrary to generally accepted standards, to determine medical necessity for the care and treatment of patients with mental health and substance use disorders (MH/SUD).
D. Brian Hufford, a partner at Zuckerman Spaeder, who heads the firm’s health care practice that represented more than 50,000 plaintiffs in the class action lawsuit, commented that “This is a monumental win for mental health patients, who face widespread discrimination in attempting to get the coverage they were promised and that the law requires.”
Why did UBH discriminate? They did it for one reason: to reap the financial rewards that restricting or denying access to outpatient and residential care for individuals living with MH/SUD generates.
Although the finding did not specifically address federal parity law, it does speak directly to the need for far better enforcement of the law.
During the final year of George W. Bush’s administration in 2008, the U.S. Congress passed the Mental Health Parity and Addiction Equity Act (MHPAEA), a federal law to prevent health insurers that provide MH/SUD benefits from carrying out less favorable benefit limits on those benefits than on medical and surgical benefits. In other words, parity law holds that it is illegal to treat diseases of the brain differently than those of any other part of the body.
Chief Magistrate Joseph C. Spero stated that UBH guidelines were aimed first at reducing costs through “an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.”
This decision fires a powerful warning shot at all insurance carriers that cut corners in determining medical necessity without regard for quality of care and with the sole aim of enriching themselves at the expense of their beneficiaries living with MH/SUD.
As plaintiff’s attorney D. Brian Hufford concluded, “For the first time, an insurer was forced to stand trial for denying thousands of mental health and substance use disorder claims, and the court delivered a strong message: what you’re doing is harmful and illegal, and it must end.”
In his decision, Judge Spero found that UBH demonstrated “an abuse of discretion” that was “infected” by monetary incentives intended restrict access to care.
Patrick Kennedy, former US representative and leading mental health advocate, correctly frames the case as a matter of civil rights. He compared the ruling to the landmark 1954 Supreme Court decision that found racial segregation in public schools unconstitutional. He said that the UBH ruling is the Brown v. Board of Education for the mental health movement.
The insurance industry has consistently discriminated against individuals with MH/SUD and with impunity. Government officials, federal and state, have failed to adequately enforce parity law ever since its passage more than 10 years ago.
Now, according to Kennedy, “we have a federal court specifically and forensically breaking down how they get around the federal law. Judge Spero’s decision makes it clear that there will be consequences for disregarding established clinical practice in favor of a financial bottom line.”
Andrew Malekoff is the executive director of North Shore Child & Family Guidance Center.
