Wit v. United Behavioral Health Proves the Courts Are the Wrong Place to Reform Health Plan Oversight

Don’t give up hope just yet on the parity fight in the courts following the latest development in Wit v. United Behavioral Health.

But don’t forget this: No shortage of the collective troubles of the American political and business worlds come from expecting the courts to see things a certain way. If behavioral health care wants to see the world change in the direction it wants, it needs to study the playbooks of the lobbying and advocacy titans — like the U.S. Chamber of Commerce and American Hospital Association — and drive legislative changes.

The latest developments in the once-vaunted Wit v. United Behavioral Health case demonstrate this reality. The federal courts are not eager to reform how health plans can or can’t deny behavioral health benefits. That’s the purview of Congress. 

Here’s what happened. In August 2023, the U.S. 9th Circuit Court of Appeals ruled that the district court erred in certifying a class for denied behavioral health benefits and did not appropriately assess alleged violations of fiduciary duty. The move effectively revived the case from a previous, much less favorable appeals court ruling.

Then in January, United Behavioral Health turned to the appeals court for help in how the district court was handling the case post-appeals court order. It sought a writ of mandamus, an order that effectively calls out the lower court for not following directives from a higher court. The 9th Circuit granted that petition on Sept. 4.

I’m going to break down what the latest development means for the case and why the continued ups and downs (mostly down) of this case prove that the courts are the wrong place to seek industry-changing reforms.

Why this is exceptional

Understanding more about a writ of mandamus helps contextualize what a resounding but still incremental blow the plaintiffs took to their case.

It calls out a lower court for going astray. It’s akin to the challenge flag in football. The 9th Circuit memo granting United Behavioral Health’s petition quotes previous case law saying that such action was reserved for “extraordinary situations.”

In federal criminal law, a writ of mandamus “should only be used in exceptional circumstances,” according to the U.S. Department of Justice’s civil resource manual. Other analysis suggests that federal appeals courts only issue these dicta once or twice a year.

This was an exceptional movement by the courts, showing how little leeway there is to maneuver within the case. It demonstrates the exceptional stakes of challenging health plans’ denials of benefits and hoping to do that at scale. It all comes down to just a handful of people’s interpretations of the law, case law and the arguments made in filings.

If you get one bad break, you’re more or less done for.

A little more perspective

The case isn’t dead by any stretch of the imagination.

The writ of mandamus clearly puts to bed the class claims around the denial of benefits question: “We reversed (without remand) both the district court’s class certification order and merits judgment on the denial of benefits claim,” the memo states. Yet questions about how to assess alleged violations of fiduciary duties and alleged violations of state laws remain in play.

The memo did not address the state law violation allegations since it was not part of United Behavioral Health’s petition for the writ of mandamus.

Still, what the district court can look at when it comes to fiduciary duties is limited. It may only assess whether potential conflicts between health plan terms and generally accepted standards of care apply to assessing fiduciary duty claims.

Fiduciary duty claims often seek to assess whether or not the health plan acted in the interest of the plan member. In this case, Wit argues that United Behavioral Health makes coverage and denial decisions based on its financial interests, not the health interests of members. Early in the year, UnitedHealthcare, also part of UnitedHealth Group (NYSE: UNH), saw the 9th Court revive a separate case involving behavioral health fiduciary duty claims that was previously dismissed by a district court.

What has not been tweaked by the appeals court are alleged violations of state laws in Texas, Connecticut, Rhode Island and Illinois. In some cases, states explicitly define what generally accepted standards of care are to be used when investigating health plan language. They often defer to nonprofit medical oversight boards such as the American Society of Addiction Medicine (ASAM). Those are likely to come to the fore now that the district court has clarity on the writ issue.

Translating disappointment into action

The behavioral health industry needs to expend enormous amounts of cash, time and effort to unify the disperate points of lobbying and advocacy into something like what other industries have. Ambiguities in legislation got us here; better legislation will get us out of here.

And the behavioral health industry appears to have a remarkable case to make.

On the whole, Americans like having health insurance. But nearly 60% of those with insurance have had an issue using their benefits in the past year, according to survey data from the Kaiser Family Foundation. This disproportionately hits those in fair and poor health: 67% of adults describing their health this way had issues with their insurance. Compare that to the 56% of people with at least good health who had issues.

Further, 43% of those with fair or poor mental health reported not getting access to a mental health service or medication “they thought they needed.” Forty-five percent of these folks also rate their health plan a negative rating on access to care, while 69% reported having an issue with their insurance in the last year.

Rhetorically speaking, who doesn’t want to see fewer people die from overdoses and addiction-related issues? Who truly opposes increasing access to care for those with severe psychiatric needs? Who wouldn’t want a teen struggling with self-worth issues or suicidality to get care more easily? While advocates have done a good job getting issues like this into mainstream discourse, largely via social media, more work needs to be done to translate talk into action.

The inclusion of behavioral health issues in the Biden unity agenda is a very promising indicator that elected leaders at the highest levels see value in addressing these issues. Specific to Biden, the administration is set to release new rules that would revamp technical aspects of parity compliance on the part of health plans. There has yet to be a successful legislative effort in recent years regarding parity.

If for no other reason, behavioral health advocates should favor focusing on legislative solutions over judicial ones because of the track record of the U.S. Supreme Court. Earlier in the summer, the high court nuked a foundational principle of federal regulation. Experts say this move by the court injected immense uncertainty into the behavioral health industry.

Can the industry afford to wait for change? The American judicial system is intentionally ponderous and deliberate. Litigation in Wit v. United Behavioral Health alone has been ongoing for about 10 years. The dire nature of the challenges the behavioral health industry faces demands urgency. You’re not going to find that in court.