The legal battle in Wit v. United Behavioral Health has reached a pivotal moment as the U.S. 9th Circuit Court of Appeals has issued an order compelling the district court to adhere to its earlier rulings in the case. The decision comes after United Behavioral Health (UBH), a division of UnitedHealth Group (NYSE: UNH), filed for a writ of mandamus, seeking to ensure that the lower court complied with the appeals court’s previous directions. While the ruling brings clarity to certain aspects of the case, particularly the issue of reprocessing allegedly wrongfully denied behavioral health claims, it leaves several crucial questions unresolved, particularly regarding fiduciary duty violations and state law breaches related to standards of care.
This case, which began in 2014, has had a significant impact on the legal landscape for behavioral health claims and insurance, particularly in relation to the enforcement of parity laws—laws designed to ensure that mental health and substance use disorder treatments are covered by insurance plans at the same level as physical health conditions. When the case was initially brought to court, it was seen as a potential landmark case in advancing these protections. However, over the years, the case has evolved into a complex legal battle that continues to drag on with no clear resolution in sight.
The Road to the Appeals Court
In January 2025, United Behavioral Health filed for a writ of mandamus with the 9th Circuit Court of Appeals, arguing that Magistrate Judge Joseph Spero of the district court had misinterpreted the court’s prior orders. The insurer’s legal team claimed that the district court had erroneously allowed the plaintiffs to present a new theory regarding the denial of benefits, essentially giving them a “second bite at the apple.” This was in direct contrast to the appeals court’s previous ruling, which had already addressed the question of whether behavioral health claims were wrongfully denied under UBH’s policies.
In its order, the 9th Circuit Court of Appeals sided with United Behavioral Health, stating that the district court had indeed strayed from the original mandate. In a memo dated September 4, 2023, the appeals court expressed that while the district court had thoroughly analyzed the spirit of its mandate, it had failed to adhere to the “letter” of the original ruling. The appeals court emphasized that the lower court’s interpretation was incorrect and could lead to unnecessary delays in the resolution of the case, as well as significant litigation costs for UBH.
The Issue of Reprocessing Denied Claims Resolved
One of the key issues that had lingered throughout the case was whether or not UBH should be required to reprocess behavioral health claims that were allegedly wrongfully denied under its policies. This question had been central to the plaintiffs’ claims and was seen as a major victory for parity advocates when the district court ruled in favor of reprocessing in 2019.
However, the latest ruling by the 9th Circuit Court of Appeals puts this issue to bed. The court has ordered the district court to dismiss the issue of reprocessing, effectively ruling that UBH does not need to revisit behavioral health claims that were previously denied under the company’s insurance policies. This is a significant decision because it resolves one of the most contentious aspects of the case, bringing an end to any further litigation regarding the reprocessing of denied claims.
The appeals court noted that the district court was “not free to again” allow the plaintiffs to litigate their denial of benefits claims. This ruling clarifies that the plaintiffs cannot use the same issues to continue challenging UBH’s decisions regarding behavioral health claims. The appeals court was firm in its assertion that pursuing these claims further would lead to unnecessary litigation costs for UBH, making the decision to halt further consideration of this issue an important move toward resolving the case.
Unresolved Issues: Fiduciary Duty Violations and State Law
Although the reprocessing issue has been resolved, the Wit v. United Behavioral Health case is far from over. The appeals court left open several key questions that still need to be addressed, particularly regarding potential fiduciary duty violations and breaches of state laws related to generally accepted standards of care.
One of the remaining areas of focus is whether United Behavioral Health violated its fiduciary duty in handling the plaintiffs’ claims. Under the Employee Retirement Income Security Act (ERISA), which governs many health insurance plans, insurance companies have a fiduciary responsibility to act in the best interest of their beneficiaries. The plaintiffs in this case have argued that UBH failed in this duty when denying behavioral health claims that they believe should have been covered.
The appeals court ordered that the district court continue its examination of these fiduciary duty violations, ensuring that UBH’s actions are scrutinized according to the legal standards outlined in ERISA. This issue remains unresolved and will require further legal proceedings to determine whether UBH’s conduct met the requirements of the law.
Another unresolved issue involves potential violations of state laws concerning the standards of care for behavioral health claims. The plaintiffs have argued that UBH’s denial of certain claims violated state laws that require insurance companies to adhere to generally accepted standards of care in the treatment of mental health and substance use disorders. These state law violations have not been addressed in the appeals court’s latest ruling, and it remains to be seen how the district court will proceed on this front.
The Impact on Parity Law and Behavioral Health Coverage
As the case continues to unfold, the implications for the parity movement and behavioral health claims coverage are profound. The Wit v. United Behavioral Health case has the potential to set important legal precedents for how insurance companies handle behavioral health claims, particularly in regard to parity laws and ERISA requirements. A favorable ruling for the plaintiffs could strengthen the legal framework for ensuring that individuals with mental health and substance use disorders are afforded the same treatment and coverage as those with physical health conditions.
However, the ongoing litigation also highlights the challenges in enforcing parity laws and ensuring that insurance companies comply with the legal standards set forth to protect patients. As the case progresses, it will continue to draw attention to the need for more robust enforcement of parity regulations and clearer legal guidelines for behavioral health claims coverage.
Looking Ahead
As of now, the case remains unresolved, and both sides continue to await further developments. Attorneys for the plaintiffs, from the firm Zuckerman Spaeder LLP, declined to comment on the latest ruling, and as of the publication of this story, no statement has been issued by United Behavioral Health’s legal team. The road ahead promises to be filled with continued legal battles, particularly around the issues of fiduciary duty violations and state law breaches.
For those following the case, the latest appeals court order marks a significant moment, but it is clear that much work remains to be done before the case reaches its final resolution. The ruling brings closure to one major issue—the reprocessing of denied claims—but leaves open important questions that will continue to shape the legal landscape for behavioral health claims and insurance.
In the end, the Wit v. United Behavioral Health case may have far-reaching consequences for the way insurance companies treat mental health and substance use disorders. With the legal battle still ongoing, advocates for parity laws will be watching closely, hoping that the case will bring about meaningful changes in the way behavioral health claims are handled and, ultimately, ensure greater protections for those seeking treatment for mental health conditions.
