Appeals Court Revitalizes Mental Health Claims Case Wit v. United Behavioral Health

A federal court decision has revitalized the mental health parity case of Wit v. United Behavioral Health.

On Aug. 22, the U.S. 9th Circuit Court of Appeals vacated its previous ruling, issued in January 2023, and remanded questions about potential breaches of United Behavioral Health’s fiduciary duty and the plaintiff’s responsibility to exhaust administrative appeals for denied behavioral health claims.

The Kennedy Forum, a behavioral health policy advocacy group, said in a statement that the decision opens the door for some of the plaintiffs in the class action lawsuit to have their denied claims reprocessed.

“Today I am heartened on behalf of the millions of Americans who need mental health and addiction care,” Patrick Kennedy, the Kennedy Forum’s co-founder and a former U.S. Representative, said. “This case continues to demonstrate the need to enforce existing laws so people receive the timely care they need. As the author of the 2008 Mental Health Parity and Addiction Equity Act, I support the Biden Administration’s proposed rules to the Act to help achieve this.”

The appeals court’s ruling in January was a resounding disappointment for behavioral health advocates. It overturned a favorable and sweeping 2019 district court decision. It spelled out a novel way that health plans governed by the Employee Retirement Income Security Act (ERISA) handle behavioral health claims and ordered the reprocessing of some 70,000 denied behavioral health claims.

The title plaintiff is a family with a child who was denied care for severe mental health issues, including self-harm and suicidal ideation.

The law firm Miller & Chevalier wrote in a blog post that the ruling is “largely a win for United Behavioral Health.” However, the ruling does keep the questions about United Behavioral Health’s fiduciary duties going and clarifies the January ruling.

“By clearly allowing for reprocessing of claims as a remedy, in appropriate circumstances, for claims brought under [a section of ERISA], the court’s latest opinion eliminates some confusion created by its January 2023 analysis,” the blog states. “That said, the court again concluded that the district court erred in holding that reprocessing of claims is ‘appropriate equitable relief’ for fiduciary breach claims… because it was not relief typically available in equity under analogous circumstances.”

After the appeals court’s January decision in Wit v. United Behavioral Health, experts in the legal field said that additional action in court was likely.

The case was filed in 2014 and was granted class-action status. In part, the plaintiffs in several cases, which were later merged, alleged that United Behavioral Health improperly ignored generally accepted medical standards when assessing the medical necessity of behavioral health services.

The first time the appeals court considered Wit v. United Behavioral Health, it issued a remarkably short ruling that didn’t assess the case in its totality.

Since the original district court decision in 2019, some have called this case the Brown v. Board of Education of health insurance cases.

The law firm Zuckerman Spaeder said in a statement that the most recent ruling was better than anticipated. However, it didn’t grant their request for a rehearing before all the judges on the 9th Circuit Court of Appeals. Zuckerman Spaeder represents the plaintiffs along with Psych-Appeal Inc. and Stris & Maher LLP.

“The Ninth Circuit’s original ruling was shocking and very nearly gutted the entirety of the lower court’s decision,” Zuckerman Spaeder partner Caroline Reynolds said. “It is remarkable and commendable that the panel has now twice reconsidered its rulings and has substantially resurrected a generationally important mental health ruling.

“The fight is far from over, but this decision unquestionably offers new hope for millions of Americans in need of mental health and addiction treatment.”