The 9th U.S. Circuit Court of Appeals rejected the plaintiffs’ appeal in Wit v. United Behavioral Health.
A three-judge panel released the ruling on Jan. 26. While the appeals court remanded the case to the district court, the move is seen as a blow to parity in behavioral health.
“This decision is heartbreaking,” Marvin Ventrell, CEO of the National Association of Addiction Treatment Providers (NAATP), told Behavioral Health Business. “Access to care is already a crisis in America, largely because insurers fail to cover the disease on par with other diseases, frequently in violation of federal parity law.”
UnitedHealth Group Inc. (NYSE: UNH) and its subsidiary, UnitedHealthcare, have yet to respond to a request for comment. The plaintiff’s counsel, Zuckerman Spaeder and Psych-Appeal, have also yet to respond. This story may be updated.
BHB has also sought comment from the health insurance industry group America’s Health Insurance Plans (AHIP).
In 2019, a Northern California district court found that United Behavioral Health violated Employee Retirement Income Security Act (ERISA) and inappropriately denied behavioral health claims, siding with the plaintiffs. In March 2022, the circuit court reversed the district court. Since then, the plaintiffs have been petitioning the circuit court to reconsider.
The case amassed 67,000 claims for about 50,000 enrollees that the plaintiffs alleged were mishandled.
The leaders of and advocates for the behavioral health industry accuse the insurance industry of not paying fair rates compared to physical health care procedures. Congress has spent decades trying to enumerate laws that prevent health insurers from discriminating against behavioral health care.
The U.S. Department of Labor under the Biden Administration has been increasingly active in enforcing or developing new standards under existing laws.
The insurance industry groups express frustration with new standards being piled on to them when they already face a lack of clarity in how plans are to demonstrate their compliance with existing standards.
Federal legislative solutions to parity remain elusive.
In September 2022, the U.S. House of Representatives passed a bill that would have allowed health plans to be fined for not meeting parity regulations. However, the bill never progressed past that point.
The recently passed omnibus funding bill added $50 million to assist state governments with parity enforcement. It also removed a previous exemption that allowed non-federal governmental entities to opt out of parity requirements.
Reaction to the ruling
Behavioral health industry advocates said the ruling worsens the industry’s access challenge. A nagging shortage of providers in the industry is worsened by significant sections of the sector opting not to accept insurance plan participation because the rates are too low or not worth the administrative burden.
“The court effectively eroded any ground mental health and parity advocates gained from the initial Wit v. United Behavioral Health ruling, denying the argument that the [ERISA] mandates consistency with generally accepted standards of care,” Alison Kavanagh, marketing vice president for behavioral health technology services provider Sunwave Health Inc., said in an email. “And by dismantling large portions of the original ruling, the 9th Circuit opens the door to policies and practices that could harm millions and perpetuate our nation’s addiction and mental health crisis.”
Ventrell expressed similar distress about the damage the ruling does to parity efforts and the scale of the impact on mental health and addiction treatment patients.
“It will be necessary for our legal experts to assess the soundness of the legal analysis used in this decision and formulate a strategy to move forward to find ways to treat the many millions of Americans who suffer from this frequently fatal disease,” Ventrell said.