The fight for behavioral health parity has gained significant momentum heading into 2024, following three critical appellate decisions in the ongoing Mental Health Parity Lawsuit. These rulings have brought renewed attention to the long-standing battle over insurance denials in the mental health and addiction treatment sectors. In fact, this battle may extend all the way to the U.S. Supreme Court after an appeal filed by United Behavioral Health, which challenges recent decisions regarding behavioral health claims under ERISA (Employee Retirement Income Security Act).
Three pivotal cases now making their way through the appeals process focus on how health plans governed by ERISA handle benefit denials and internal appeals. These rulings significantly impact how health plans communicate decisions in denial letters, evaluate the expert opinions of members’ clinicians, and set new standards for initiating a Mental Health Parity Lawsuit in federal court.
ERISA, the federal law that governs most private health and retirement plans, was amended in 2008 with the inclusion of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA). The MHPAEA mandates that health plans treat behavioral health benefits equally to physical health benefits. However, a number of providers and advocates have pointed out the continuing inequities in how health plans enforce this parity, including underpayment for services and issues with claims treatment.
Parity: A Long-Standing Battle in the Behavioral Health Sector
Parity has been an ongoing issue within the behavioral health industry for many years. Providers have consistently pointed to the underpayment for mental health services and the inequitable treatment of claims as root causes for several pressing issues, including challenges with wage inflation and employee retention in the sector. Despite the growing support for parity and the federal mandate, the insurance industry remains a formidable opponent, frequently disputing the benefits of parity in mental health coverage.
Many insiders believe that 2024 will be a defining year for the Mental Health Parity Lawsuit movement. With the Biden Administration preparing to implement new regulations to enhance parity provisions, there is growing hope that these efforts will finally close the gap between mental health and physical health coverage.
“This is just a rampant rip-off of the American public: that they pay all this money for health insurance premiums and they incur claims based on their doctor’s treatment recommendations, and the insurance companies won’t pay,” said Attorney Mark DeBofsky of DeBofsky Law in Chicago, speaking to Behavioral Health Business. “Unfortunately, you have a child who has psychiatric issues and needs a more intensive level of care, and they don’t want to pay for that. And that’s the case in these cases.”
New Standards for Mental Health Parity Lawsuits
On November 25, the 10th U.S. Circuit Court of Appeals clarified for the first time how a Mental Health Parity Lawsuit should be evaluated in the appellate process. The court established four essential criteria for determining whether a claim under the MHPAEA has been appropriately brought forward. These criteria now serve as the standard when health plans attempt to dismiss such cases, providing plaintiffs with a clearer path forward.
The four criteria are:
- The plaintiff must plausibly allege that the health plan is subject to MHPAEA.
- The plaintiff must identify specific limitations placed on the behavioral health benefit.
- The plaintiff must demonstrate comparable physical health care benefits.
- The plaintiff must plausibly allege a disparity between the two types of services.
This ruling is crucial, as it provides a standardized method for handling Mental Health Parity Lawsuits and could serve as a model for district courts in the region. Although the ruling only affects the 10th Circuit Court of Appeals, it is expected to influence how other courts assess parity cases.
As DeBofsky mentioned, “The opinion is going to be influential as far as how other courts will look at it. They’re not bound by the EW case, but they will undoubtedly consider it persuasive authority.” This decision is a step in the right direction, helping plaintiffs better understand what they need to prove to move forward in their Mental Health Parity Lawsuit.
United Behavioral Health Appeals to the Supreme Court
In May, the 10th Circuit Court upheld a district court ruling that awarded benefits to plaintiffs in a case against United Behavioral Health. This case, D.K. v. United Behavioral Health, revolves around how the health plan communicated its denial of benefits and how it disregarded medical opinions and evidence provided by the plaintiff’s clinicians during the appeals process.
United Behavioral Health has since filed an appeal with the U.S. Supreme Court, arguing that the health plan is not required to explain why it disagrees with a member’s treating clinicians in its denial letters. The case raises important questions about the legal obligations of insurance plans when it comes to transparency and fairness in the denial of mental health and addiction treatment benefits.
The Mental Health Parity Lawsuit in question challenges the idea that denial letters alone should be the primary document for assessing claims. According to the appeals court, if an insurance company fails to credit the medical opinions of a treating physician, it may be acting “arbitrarily and capriciously.” United Behavioral Health continues to argue that it is not legally required to provide comprehensive explanations in denial letters. This case could have a significant impact on how the insurance industry approaches behavioral health claims.
The Role of Addiction and Mental Health Treatment in Parity Cases
In December, another key decision was made in the case of Ian C. v. UnitedHealthcare Insurance Co. In this case, the circuit court found that the plaintiff’s mental health and addiction treatment needs were treated as separate issues, rather than as part of an integrated approach to care. The court ruled that UnitedHealthcare failed to consider the combined needs for both mental health and addiction treatment, which directly impacted the outcome of the claim.
This decision is crucial because it highlights the importance of treating addiction and mental health care as intertwined issues. The legal precedent set by this ruling may have far-reaching implications for future Mental Health Parity Lawsuits, reinforcing the idea that mental health and addiction treatments should be treated equally and in tandem, rather than as isolated conditions.
Looking Ahead: The Future of Behavioral Health Parity
As 2024 approaches, many expect the issue of behavioral health parity to continue gaining attention. With the new rules expected from the Biden Administration and ongoing legal battles such as the Mental Health Parity Lawsuit against United Behavioral Health, there is hope that we are on the brink of seeing real change in the way insurance companies handle mental health and addiction treatment claims.
The battle for behavioral health parity is far from over, but the growing momentum in the courts and in policy changes indicates that 2024 could be a pivotal year for achieving true parity in mental health and addiction care.
