Legal, Payers

UnitedHealth must reprocess thousands of illegally denied mental health claims, judge orders

In a trial last year, a federal judge found that a UnitedHealth subsidiary had illegally denied mental health and substance use disorder claims. The same judge has now ordered the payer to reprocess all the claims and reform its guidelines.

A federal judge has ordered United Behavioral Health, a subsidiary of UnitedHealth Group, to reprocess about 67,000 mental and behavioral health coverage claims that it previously illegally denied.

Judge Joseph Spero of the U.S. District Court for the Northern District of California stated that payer’s coverage guidelines for mental health and substance use disorder claims were  “significantly and pervasively more restrictive than generally accepted standards of care.” The judge ordered the payer to reprocess the claims denied under those guidelines, change its handling of behavioral health claims and improve employee training.

In an emailed statement, UnitedHealth Group confirmed that it will reprocess approximately 67,000 denied authorizations affecting about 50,000 members.

“Over the last several years, we have taken concrete steps to improve access to quality care by enhancing coverage through clinician-developed evidence-based guidelines, expanding our network of providers, and providing new ways for people to quickly access care though telehealth and other digital platforms,” the payer said.

Last year a class action lawsuit regarding the denied United Behavioral Health claims went to trial. Spero, who also presided over the trial, ruled that the payer denied mental health and substance use disorder treatment coverage to members using internal guidelines that were not consistent with the terms of their insurance plans. The payer “engaged in this course of conduct deliberately, to protect its bottom line,” the judge wrote in the recent order.

Further, the judge wrote that to hide its wrongdoing, United Behavioral Health “lied to state regulators and UBH executives with responsibility for drafting and implementing the guidelines deliberately attempted to mislead the court at trial in this matter.”

Now, the judge is ordering the payer to not only reprocess the previously denied claims but also to make changes to its guidelines for accepting or rejecting behavioral health claims.

The judge issued a 10-year injunction that requires United Behavioral Health to use criteria developed by specialty physicians associations, including the American Society of Addiction Medicine, to determine whether a mental health or substance use disorder treatment is medically necessary, Caroline E. Reynolds, a lawyer who led the case through trial and the remedy phase, said in a phone call.

Reynolds, a partner at law firm Zuckerman Spaeder, added that this means the payer must essentially use the same criteria as providers when processing claims.

In addition, the court will appoint a “special master” to oversee the claims reprocessing and guideline reforms. That person will also supervise the payer’s development of employee training programs to get staff up to speed with the reworked guidelines.

The 2019 trial and recent order are “significant” moves in holding insurers to account and requiring them to comply with what is promised under their health plans, Reynolds said.

Photo: Chris Ryan, Getty Images