The 9th U.S. Circuit Court of Appeals recently issued a ruling in Wit v. United Behavioral Health, rejecting the plaintiffs’ appeal in a case that has major implications for addiction treatment insurance and behavioral health parity in the United States. A three-judge panel released the decision on January 26, remanding certain aspects of the case back to the district court. While the remand allows for continued legal proceedings, many industry advocates see the ruling as a serious setback for patients seeking adequate coverage for behavioral health care.
“This decision is heartbreaking,” said Marvin Ventrell, CEO of the National Association of Addiction Treatment Providers (NAATP). “Access to care is already a crisis in America, largely because insurers fail to provide addiction treatment insurance on par with other medical coverage, frequently in violation of federal parity law.” Ventrell’s comments reflect a growing frustration among behavioral health leaders who argue that disparities in insurance coverage continue to limit access to critical care for millions of Americans.
Background: The Wit Case
The case began in 2019 when a Northern California district court found that United Behavioral Health (UBH) violated the Employee Retirement Income Security Act (ERISA). The court ruled that UBH had inappropriately denied behavioral health claims, siding with the plaintiffs who argued that the insurer’s policies failed to meet generally accepted standards of care. The plaintiffs’ claims centered on roughly 67,000 claims for approximately 50,000 enrollees, many of whom alleged that their behavioral health and addiction treatment insurance benefits were mishandled.
In March 2022, the 9th Circuit initially reversed the district court’s decision, prompting the plaintiffs to petition for reconsideration. Many advocates argue that the ruling undermines decades of effort to ensure fair coverage of mental health and substance use disorder services.
Addiction Treatment Insurance and Behavioral Health Parity
Behavioral health parity has long been a federal priority. Laws like the Mental Health Parity and Addiction Equity Act (MHPAEA) were designed to guarantee that insurers provide addiction treatment insurance and mental health coverage on a level comparable to physical health care. Despite these protections, behavioral health services often face lower reimbursement rates and stricter limits than medical care, creating barriers for patients seeking treatment.
Many providers report that current insurance rates make it difficult to deliver high-quality care. For patients, this means addiction treatment insurance may exist in theory, but access is limited, forcing families to pay out-of-pocket or delay care.
“The court effectively eroded any ground mental health and parity advocates gained from the initial Wit v. United Behavioral Health ruling,” said Alison Kavanagh, marketing vice president for Sunwave Health Inc. “By dismantling large portions of the original ruling, the 9th Circuit opens the door to practices that could harm millions relying on addiction treatment insurance and mental health coverage.”
Legislative and Regulatory Efforts
Congress and federal agencies have struggled to enforce parity consistently. In September 2022, the U.S. House of Representatives passed a bill allowing fines for insurers that fail to provide addiction treatment insurance at parity, but the legislation stalled before becoming law. Regulatory enforcement remains uneven, although the U.S. Department of Labor under the Biden Administration has increased efforts to clarify and enforce standards for addiction treatment insurance and behavioral health coverage.
The recently passed omnibus funding bill allocated 50 million dollars to help states enforce parity and removed exemptions that had allowed some non-federal entities to bypass coverage requirements. While these measures are steps forward, advocates emphasize that the systemic disparities in addiction treatment insurance reimbursement and provider participation remain unresolved.
Industry Reaction
Behavioral health leaders warn that the 9th Circuit’s ruling worsens the ongoing access crisis. A shortage of providers, combined with low insurance participation, continues to limit options for patients. Many addiction treatment programs refuse to join insurance networks because reimbursement rates for addiction treatment insurance are too low or the administrative burden is too high.
Ventrell emphasized the scale of the challenge: “It will be necessary for our legal experts to assess the soundness of the legal analysis used in this decision and formulate a strategy to move forward to find ways to treat the many millions of Americans who rely on addiction treatment insurance for lifesaving care.”
Broader Implications
The ruling underscores persistent gaps in parity enforcement and highlights ongoing tensions between insurers, regulators, and patient advocates. Without strong mechanisms to hold insurers accountable, coverage under treatment insurance continues to fall short of what patients need, perpetuating disparities in access to care.
For patients and providers, the decision is a stark reminder that securing reliable addiction treatment insurance remains a challenge. Advocacy, policy reform, and regulatory oversight will be essential in ensuring that coverage is not just legally mandated, but practically accessible.
The Wit v. United Behavioral Health case continues to be closely monitored, as its outcome affects the broader struggle for parity and the future of behavioral health and addiction care in America. With millions of Americans depending on behavioral health insurance, the industry faces an ongoing fight to ensure fair access to essential services.
