As Wit v. United Behavioral Health could impact the future of behavioral health parity

The behavioral health industry is awaiting a vital decision from the federal appeals court in a long legal battle between payers and carriers.

Regardless of the decision, the ruling in Wit v. United Behavioral Health will have far-reaching consequences for behavioral health advocates pushing insurers toward reimbursement parity.

The class-action lawsuit, originally filed in May 2014 by David Wit, Natasha Wit and Brian Muir, alleged that United Behavioral Health improperly disregarded generally accepted medical standards when developing its rules for determining the medical necessity of behavioral health services.

In 2019, a Northern California district court found that United Behavioral Health violated the Employee Retirement Income Security Act (ERISA) and improperly denied behavioral health claims, ruling in favor of the plaintiffs. In March, the circuit court reversed the district court. The plaintiffs have since asked the circuit court to reconsider.

“When this decision came, it affected every state, every payer,” Tom Britton, CEO of American Addiction Centers, told Behavioral Health Business.

Effectively, he explained, he put payers across the country on notice, telling them they can’t use financial motivation to make clinical decisions.

Plaintiffs and behavioral advocates alongside them say the district court’s decision halted the widespread use of standards of medical determination that are inconsistent with generally accepted medical standards.

The case was filed under ERISA. And while the case does not directly challenge federal parity laws, Wit v. United Behavioral Health sees itself as a vital decision that empowers behavioral health during a widespread mental health pandemic and reigns in payers who claim they are too focused on their benefits. margins

In its appeal to the 9th U.S. Circuit Court of Appeals, United Behavioral Health said in documents that the plaintiffs failed to establish that the decisions United made caused harm. He also argued that the district court erred when it made interpretations of insurance plan documents and that was not in line with court precedents surrounding the law governing health plans that work with employers.

UnitedHealth Group Inc. (NYSE: UNH) and its subsidiary, UnitedHealthcare, did not respond to a request for comment.

In a brief to the appeals court, the insurance industry group AHIP similarly argues that the district court erred in certifying a class. He also argued that the district court’s decision deprives health plans that work with employers of the discretion they deserve to administer health benefits.

“If the Court does not reverse, the lower court’s holdings will have a lasting and detrimental impact on ERISA-covered benefit plans and their administrators and, as a result, on employees’ access to sound and affordable health coverage based on in employment”. states the AHIP amicus brief.

AHIP joined the US Chamber of Commerce in supporting United Behavioral Health.

Background of the case

The United States District Court for the Northern District of California ruled in February 2019 that United Behavioral Health had violated ERISA, the law governing certain employer health plans. The court found that United Behavioral Health improperly denied behavioral health claims based on overly strict internal guidelines.

In November 2020, the district court also ruled that United Behavioral Health must reprocess up to 67,000 claims for about 50,000 enrollees in Connecticut, Illinois, Rhode Island and Texas.

Those guidelines influenced and benefited United’s bottom line and did not align with generally accepted standards of care, according to an analysis of the case and state of parity in the US by the Kaiser Family Foundation.

In March 2022, a three-judge panel of the 9th US Circuit Court of Appeals reversed the district court in a 6-page ruling and 2-page concurrence.

It ruled that the district court misapplied the appropriate standard of review for ERISA cases and failed to give United Behavioral Health proper deference in administering the benefits.

What the ruling means for Wit v. United Behavioral Health

While the appeals court handed down a major court victory for behavioral health advocates, attorney David Thornton said in an interview that the decision itself was typical of ERISA cases. Thornton practices with the firm Bass, Berry & Sims PLC.

“In one respect, the [appeals court] said, “That’s the standard of review: Is this arbitrary and capricious or an abuse of discretion?” Thornton said, adding that the circuit court effectively answered that “the district court misapplied that norm”.

The plaintiffs in the suit have asked for the court to rehear the case or for the entire circuit court to hear the case again.

Thornton said appeals to rehear circuit court decisions are typically denied. However, Wit v. United Behavioral Health appears “ripe” for a rehearing given the importance of the controversy and that the appeals court did not delve into the facts to support the basis of its decision, Thornton said.

Thornton added that since the appeals court did not go into the specifics of the case in its decision and that the decision is so general that it does not set a useful precedent.

“I think this case is ripe for the full 9th ​​Circuit to get another set of eyes,” Thornton said. “I find it very unusual not to go into the facts.”

According to Matthew Wolfe, shareholder and co-leader of behavioral health at Baker, Donelson, Bearman, Caldwell & Berkowitz PC, en banc hearings (or an all-judge hearing on the US 9th Circuit Court of Appeals) are rare for practical matters.

One reason the appellate court may do this is to correct errors of law or decisions that do not conform to binding circuit court or Supreme Court precedent. Another reason, Wolfe said, is that the controversy in the case is of significant importance.

“This remains a hotly contested area of ​​law and regardless of whether the 9th Circuit grants the request,” Wolfe said. “There will be litigation along these same lines in other circuits. Ultimately, I suspect the Supreme Court will have to weigh in on these issues.”

The future of parity in behavioral health

The 9th U.S. Circuit Court of Appeals has not revealed whether it will grant or deny the plaintiff’s motion to have the appeals court hear the case again.

Assuming the status quo remains, health plans can determine whether or not a health service is medically necessary and does not have to align with accepted clinical standards, said David Lloyd, senior policy adviser at the Forum. Kennedy.

“We think this sets a very bad example,” Lloyd said. “What’s going to happen is you’re going to have health plans that say, ‘We don’t think this is medically necessary for you even though your doctor has recommended it.’ We have decided this using new criteria actively designed with our own financial interest in mind, and you have very little standing to challenge it.”

Lloyd pointed to several legislative efforts at the state and federal level to strengthen parity in behavioral health reimbursement.

Although not directly relevant to Wit v. United Behavioral Health, Congress attempted to address parity through the Mental Health Parity Act of 1996 (MHPA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

However, behavioral health carriers and advocates have long complained that insurers failed to comply with these laws and that the executive branch of the federal government lacked the teeth to go after violations.

Some data confirm these complaints. A 2019 report by Milliman Inc. found that disparities between behavioral health services and physical health services widened between 2013 and 2017.

In January, the U.S. Departments of Labor, Health and Human Services and the Treasury released a scathing report that said, in part, that none of the insurers being investigated in 2021 for compliance with certain MHPAEA rules provided sufficient information for the federal government to evaluate them. The KFF analysis states that this report was “evidence of low compliance with parity”.

Although, Wit. v. United Behavioral Health survives the courts, Britton said, “is not a silver bullet” and that corresponding state and federal legislation is required to enshrine the necessary policy changes.

Part of the conversation about parity, Britton said, needs to focus on the scientific legitimacy of care, especially in addiction treatment.

“Payers are not denying hypertensive drugs, ongoing primary care visits, annual echocardiograms and stress testing because they know this is legitimate science,” Britton said. “Addiction medicine … is equally supported in the literature.”

Congress has recently signaled that it could adopt additional parity measures to strengthen enforcement efforts, but has not made major reform.

In 2021, the Consolidated Appropriations Act of 2021 required health plans to document and compare nonquantitative treatment limitations (NQTLs) that apply to behavioral health and physical health benefits, according to a article by the law firm Ballard Spahr.

The recently passed Inflation Reduction Act originally included bill language that would have established civil monetary penalties for violations of the MHPAEA. However, the version of the bill signed on August 16 did not contain such language.

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