Supreme Court Rejects UnitedHealth Appeal, Boosting Behavioral Health Providers’ Standing with Insurers

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The U.S. Supreme Court rejected a request by United Behavioral Health to hear a behavioral health claim denial case.

The case, titled D.K. v. United Behavioral Health, centered on findings that the health plan did not give plaintiffs a full and fair review during the denial-appeals process. The Supreme Court’s decision allows two rulings favorable to the plaintiff to stand.

This decision creates binding precedent in the U.S. Court of Appeals for the Tenth Circuit. It reinforces existing law and case law that require health plans to take the input of patients’ clinicians seriously. It also puts a finer point on the importance of health plans meaningfully engaging with clinicians and members when assessing claims. 

While not binding in other circuits, some hope the ruling will stand out as persuasive case law when seeking redress for health plans’ potential mishandling of claim denials.

The Supreme Court released its decision on Feb. 20. Four of the nine justices must vote to accept a case, according to its rules.

“We’re seeing a bit of a trend here, a bit of momentum in the direction of making more robust these full and fair review requirements from ERISA,” Brian King, founder of Utah-based Brian S. King P.C., who represented the plaintiffs, told Behavioral Health Business. “My hope is that we will continue to see that momentum play out in other circuits and other districts across the country.”

UnitedHealth Group (NYSE: UNH), the parent organization of United Behavioral Health, did not respond to a request for comment.

What was the case about?

The case was initially filed in 2017. The judge in the U.S. District Court for the District of Utah sided with the plaintiffs in a June 2021 decision. The U.S. Court of Appeals for the Tenth Circuit sided with the plaintiffs in May 2023. United Behavioral Health filed with the Supreme Court on Nov. 29, 2023.

The case revolves around two major issues with the Employee Retirement Income Security Act (ERISA): How should health plans under ERISA handle clinician insights in the denial-appeal process? And how should those decisions get communicated to members?

The courts so far have found United Behavioral Health fumbled on both questions. King described United Behavioral Health’s appeal responses as a “little template paragraph.” Often, the responses came after the plaintiffs submitted several pages of documentation.

The appeals court, in part, found United Behavioral Health couldn’t dismiss members’ clinicians’ concerns out of hand. Denial letters must show serious consideration of the appeal. In legal jargon, health plans must engage in “meaningful dialogue” with members’ clinicians.

United Behavioral Health claimed it didn’t have to dialogue with appealing clinicians in its bid for Supreme Court review. It also argued the lower courts’ decision took a “narrow scope” of the issue and “was a clear break from precedent.”

The appeals court found that “United arbitrarily refused to credit and effectively ‘shut their eyes’ to the medical opinions of treating physicians.” In so doing, United “acted arbitrarily and capriciously,” the appeals court said.

About two years ago, the patient at the center of the case died by suicide, King said. He didn’t draw a connection to the patient’s death and the dispute at the heart of the proceedings.

“But the fact that she passed by suicide is a clear indication of the extent to which these these mental health and substance use disorder claims are real and that these folks are seriously struggling,” King said. “That doesn’t mean every claim needs to be paid. But it does mean that insurance companies need to consider carefully and take seriously all the information provided to them about why treatment should be covered by the plan.”

What comes next?

The Supreme Court’s decision was not altogether unexpected.

“Given the thoroughness of the 10th Circuit’s decision, there is very little likelihood that the Supreme Court will review the case,” Attorney Mark DeBofsky, founder of Chicago-based DeBofsky Law, told BHB before the court released its decision, adding that the appeals court decision was somewhat intuitive.

ERISA requires health plans to act as fiduciaries and not act in their own interests. It was “pure common sense,” DeBofsky added, that the appeals court found health plans must address contrary medical judgments in claim appeals.

From a different point of view, DeBofsky didn’t see contradicting opinions across the circuit courts or an issue of extreme importance — two major motivators for the Supreme Court to take up cases — that were relevant to this case. DeBofsky is an expert in ERISA cases.

Another minor outcome from this case includes a demonstration of courts awarding benefits outright rather than remanding them to health plans, DeBofsky pointed out.

“Considering the administrator’s clear and repeated procedural errors in denying this claim, it would be contrary to ERISA fiduciary principles to mandate a remand and provide an additional ‘bite at the apple,'” the appeals court wrote in its decision.

Other high-profile cases involving health plans and behavioral health benefit denials are still pending in the courts. One such includes Wit v. United Behavioral Health, which saw action by the appeals courts on Aug. 22, 2023. While varied in status and legal arguments, many of these cases have a common question at their core.

“How much credence are we going to give to the insurance company’s decision-making process versus the treating physicians’ recommendations and how we follow generally accepted standards of care?” Bragg Hemme, an attorney and the behavioral health practice co-chair for the health care law firm Polsinelli, told BHB.

The lower courts’ decisions bolster the standing of a health plan member’s clinician when corresponding in the claim appeals process. It also requires plans to somewhat “pull back the blanket” on decision-making on the part of health plans, Hemme said.

“From the provider standpoint, and likely the patient’s standpoint, [health plans] should be making decisions based on the best interests of the members, and insurance companies are trying to limit that,” Hemme said.

Despite the attention the court cases have gotten, Hemme said that legislative action by Congress is required to resolve building tensions in the behavioral health industry.

“That’s the thematic elephant in the room — what’s going to drive the day? Is it patients, or is it money?” Hemme said. “That tension is pretty hard, along with how much deference health plans should get. Ultimately, this needs to be an issue for Congress, but it’ll be interesting to see how these cases play out.”

Further, D.K. v. United Behavioral Health and similar cases highlight the present tension between health plans’ profit motives, their fiduciary responsibilities and the behavioral health providers plans work with who are similarly motivated by ethical and profit motives.