Wit vs. United Behavioral Health: Where does it stand? | The Kennedy Forum

Wit vs. United Behavioral Health: Where does it stand?
June 25, 2021

The landmark court decision, Wit vs United Behavioral Health, is now back in the news because the Defendant has appealed the lower court decision to the U.S. Court of Appeals for the 9th Circuit.

In March 2021, United Behavioral Health (UBH) attorneys appealed the district court ruling where the judge ruled that UBH developed and implemented flawed “medical necessity” criteria for mental health and substance use disorder (MH/SUD) treatment services. A significant part of the ruling was based on the findings that UBH’s utilization review criteria, named the “Level of Care Guidelines,” were inconsistent with “generally accepted standards of care.” Read more about the lower court decision in this earlier blog post from The Kennedy Forum.  

In May 2021, the Plaintiffs responded to the UBH appeal with their own court filing, contesting UBH’s legal bases on appeal. Additionally, The Kennedy Forum and 25 other advocacy organizations filed an amicus brief —alongside the U.S. Department of Labor (DOL), which filed its own amicus brief—in support of the lower court’s ruling. 

This case is important for a number of reasons. First, many health plans deny medically necessary benefits to subscribers based on “preauthorization” processes tainted by flawed utilization review criteria. In fact, The Kennedy Forum and the National Alliance on Mental Illness (NAMI) recently addressed the challenges consumers face when filing a MH/SUD insurance appeal in a Health Insurance Appeals Guide. The Wit case highlights how health plans often ration care based on faulty utilization review criteria—and how they use this as a strategy to avoid compliance with the Federal Parity Law. 

Second, the Defendant is challenging the district court’s order to re-process over 60,000 claims inappropriately denied using the flawed review criteria. As highlighted in the U.S. DOL’s amicus brief, the federal government is taking issue with UBH’s assertion that the patients who were denied benefits did not experience a real injury. The DOL disagrees, noting “Plaintiff’s injuries are far from the ‘bare procedural violation’ of being subjected to UBH’s Guidelines in the abstract. The district court found, the ‘Guidelines that are at the heart of the Plaintiffs’ claims were used to deny Plaintiffs’ claims for coverage.’” The federal agency concludes that “Plaintiff’s failure to receive contractually promised coverage is directly traceable to UBH’s decisions denying coverage.” The DOL position establishes an important legal argument because this agency oversees UBH’s conduct through the Employee Retirement Income Security Act (ERISA). 

DOL also takes issue with UBH’s attempts not to reprocess the wrongfully denied claims. In their brief, DOL attorneys note the following legal precedent: “Remand for reevaluation of the merits of a claim is the correct course to follow when an ERISA plan administrator, with discretion to apply a plan, has misconstrued the Plan and applied a wrong standard to a benefit determination.” In this case, UBH had a fiduciary responsibility as a plan administrator to fairly provide the benefits offered by its administered insurance policies, which included MH/SUD treatment services at the heart of the Wit case. Many consumer advocates have expressed concern about the complicated process of challenging a health plan through litigation, per ERISA; however, in this case, the district court judge properly navigated  through the legal complexities to hold UBH accountable. 

Oral arguments for the Wit case will be heard by a three-judge 9th circuit panel in early August. If the district court decision is upheld, it will have a profound impact throughout the country and help to ensure health plans and plan administrators are using guidelines that follow generally accepted standards of care. This will be a huge win for advancing equal coverage of mental health and substance use disorder treatment. Stay tuned for updates.