The district court judge over Wit v. United Behavioral Health has been ordered by the appeals court to come into compliance with its previous orders.
The order, in addition to calling on the judge over the case to comply with previous rulings, puts to bed questions about reprocessing allegedly wrongfully denied claims. Once seen as a major victory for the parity movement, the case has since dragged on with little resolution.
In January, United Behavioral Health, a division of UnitedHealth Group (NYSE: UNH), filed for a writ of mandamus, an order from a higher court to demand a lower court come into compliance with previous rulings.
The insurer argued that the district court judge over the case, Magistrate Judge Joseph Spero, inappropriately agreed with the plaintiffs’ interpretation of the appeals court’s previous actions and “[gave] them a second bite at the apple on a new theory,” court documents state.
In a memo dated Sept. 4, the U.S. 9th Circuit Court of Appeals said Spero strayed from its previous orders.
“In its thorough analysis of the spirit of our mandate, the district court lost the letter,” the appeals court wrote in the memo.
The appeals court said a writ of mandamus is reserved for “extraordinary situations.”
In August 2023, the appeals court vacated a previous ruling that essentially ended to what was seen as a sweeping victory, in regard to legal questions about parity law and to parallel questions found in the Employee Retirement Income Security Act (ERISA), the law that governs many health insurance plans.
That favorable district court ruling was handed down in 2019; the case was originally brought in 2014.
The August ruling called for the district court to address 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 appeals court has dealt with three major issues: reprocessing denied claims, potential fiduciary duty violations and violations of state laws regarding generally accepted standards of care. This writ of mandamus orders dismissal of the first issue.
“Given our prior decision, the district court was not ‘free to again’ allow plaintiffs to litigate their denial of benefits claim,” the appeals court ordered. “Moreover, the district court’s error will impose years of litigation costs on UBH.”
Questions about fiduciary duty violations and state law violations on standards of care remain lively. The mandamus memo did not address the state law questions; it also requires the district court to further examine the fiduciary duty violation question.
Attorneys for the plaintiffs from the firm Zuckerman Spaeder LLP declined to comment. As of the time this story was published, an attorney for United Behavioral Health had not responded to a request for comment.
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