Court sides with UnitedHealth in mental health denial case

UnitedHealthcare didn't violate federal or state parity laws in denying coverage for out-of-state mental health services sought by one of its members, an appellate court said in a Nov. 9 opinion.

The opinion comes as UnitedHealthcare faces growing scrutiny of its mental health coverage denials. 

On Nov. 4, a federal judge ordered UnitedHealth Group to redo 67,000 medical claims for behavioral healthcare that it previously denied. The order followed a March 2019 ruling that found UnitedHealth instituted guidelines that denied care to patients needing mental health treatment to cut costs.

In the case before the U.S. Court of Appeals for the 9th Circuit, California plan member Suzanne Stone accused UnitedHealthcare of violating parity requirements in a 2017 Employee Retirement Income Security Act lawsuit.

In 2014, Ms. Stone sent her daughter to an out-of-state residential treatment program for anorexia nervosa. According to the circuit court's opinion, Ms. Stone was aware her plan excluded coverage for out-of-state treatment, except in emergency cases. After Optum denied coverage for the treatment, Ms. Stone sued the insurer, arguing that the covered in-state facility didn't provide necessary services, including full-time psychiatrists and medical staff, appropriate living conditions and nasogastric feeding. 

The Federal Parity Act and the California Parity Act require health plans to provide equal coverage for physical and mental health services. As UnitedHealth's coverage denial was based on the health plan's exclusion of out-of-state treatment — an exclusion that applies to both mental and physical illnesses — the circuit court concluded no parity laws were violated. 

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