U.S. Magistrate Judge Joseph C. Spero recently certified a group of UnitedHealth Group Inc. ("UnitedHealth" or the "Company") health plan participants alleging that the Company is improperly denying mental health and substance abuse treatments, in violation of the Employee Retirement Income Security Act (ERISA). The lack of coverage was common among a large number of participants, which allowed for class certification.
In its opposition to class certification, UnitedHealth's subsidiary, United Behavioral Health ("UBH"), argued that each participant's plan is different and varies depending on the guidelines set for each individual. However, Judge Spero held that since the Plaintiffs' argument is based on the plans being too restrictive, the issue is class-wide and not just specific to certain plans. Specifically, Judge Spero explained that the issues are "whether UBH was acting as an ERISA fiduciary when it developed the guidelines and adopted a policy of applying them to all coverage determinations, whether the guidelines are consistent with generally accepted standards, whether UBH breached its fiduciary duty by using its guidelines to adjudicate claims for coverage, and what remedies are available to the classes." Wit, et al. v. UnitedHealthcare Insurance Company, et al., No. 3:14-cv-02346 (N.D. Cal.).
It is UnitedHealth's fiduciary duty to make sure that participants have a plan that meets the acceptable standards in the industry, a duty which it allegedly neglected. The lawsuit is calling for UBH to create guidelines that would be considered generally acceptable and is not asking for specific benefits or guidelines. Judge Spero's viewed this as the participants asking for a fair and reasonable plan, so that they could be covered for any treatment that they may need.
Plaintiffs' counsel, Brian Hufford stated Judge Spero's ruling was a "tremendous step forward" in holding insurers responsible for the plans they offer to their participants. He further noted that, "[t]his class certification is important because few (if any) patients have the resources necessary to individually challenge this type of industrywide misconduct" (Kang).
Initially, there were two different class actions: one brought by Gary Alexander, with claims regarding outpatient treatment, and another brought by David Wit, with claims involving residential treatment and hospital stays. These cases have been consolidated.
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Source: Kang, Y. Peter. "UnitedHealth Plan Holders Win Class Cert. In ERISA Suit." Law360. Last modified on September 19, 2016.