Court Rules UnitedHealth Violated Parity Laws By Refusing ABA Coverage

A unit of UnitedHealth Group (NYSE: UNH) violated the federal benefits law and the Mental Health Parity and Addiction Equity Act when it refused to cover certain autism therapy services, a federal judge in Oakland, California has ruled.

U.S. District Judge Yvonne Gonzalez Rogers made the call earlier this month. The ruling comes after an anonymous mother brought the lawsuit against UnitedHealthcare in 2019, alleging the insurer violated mental health parity laws when it refused to cover applied behavior analysis (ABA) services for her son with autism.

“It is tremendously significant that the court found this exclusion of coverage for the most widely used autism treatment to be illegal, and that the nation’s largest health insurer can be liable under federal law for enforcing it,” Caroline Reynolds, a lawyer with Zuckerman Spaeder, who represented the plaintiff, said in a statement published by Reuters. “Because this exclusion has been in many United-administered plans for years, there are likely to be thousands of other children and families who have been similarly affected.”

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At the time of the lawsuit, the plaintiff’s son had insurance coverage through United Behavioral Health, which is a subsidiary of UnitedHealth. It was the third-party administrator and claims administrator for the employee-funded plan at Wipro Limited (NYSE: WIT), the multinational IT company where the boy’s father previously worked.

The Wipro plan covered treatment for autism spectrum disorder (ASD). However, from 2017 to 2019, it did not provide coverage for services like applied behavioral analysis (ABA), which is widely considered to be a gold standard of care for individuals with autism.

The plaintiff’s mother paid for ABA services for her son but was denied reimbursement by UnitedHealth in 2016. The plaintiff was also denied a second time in 2019, prompting her to file suit against the insurer that November.

In response, UnitedHealth argued that the exclusions of ABA services in the benefits plan was not a “treatment limitation” under the Parity Act.

The act requires coverage limits on the number of visits for treatment services — otherwise known as “treatment limitations” — to be no more restrictive than visits for medical and surgical services.

Ultimately, Rogers sided with the plaintiff on parity.

“On its face, the ABA … exclusion creates a separate treatment limitation applicable only to services for a mental health condition (Autism),” Rogers wrote in her ruling. “By doing so, the exclusion violates the plain terms of the Parity Act.”

UnitedHealthcare signaled that it would appeal the ruling.

“UnitedHealthcare covers ABA therapy based on individuals’ benefit plans and will continue to defend itself in this matter,” the insurer said in a statement.

This isn’t the first time UnitedHealth has come under fire for alleged parity violations. Over the past several years, it’s been hit with several lawsuits.

And UnitedHealth isn’t the only one: Several other insurers have fought similar legal battles. Because federal and state parity rules are rarely enforced, compliance among insurers is sub-par nationwide, leaving beneficiaries with no other choice but to take things to court in order to gain behavioral coverage.

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