Parity Update

APA Reacts to Ninth Circuit Court’s Decision in Wit v. United Behavioral Health

The Ninth Circuit Court has reversed the U.S. District Court for the Northern District of California’s February 2019 decision in Wit v. United Behavioral Health. The American Psychiatric Association released this statement:

“In February 2019, the U.S. District Court for the Northern District of California decided that United Behavioral Health (UBH) violated its fiduciary duty to mental health beneficiaries by making coverage decisions according to its own guidelines and influenced by financial interests, rather than according to the accepted standards in the industry.

We are extremely disappointed in the Ninth Circuit’s ruling, particularly as the nation faces a mental health and substance use disorder crisis in the aftermath of COVID-19. As access to mental health and substance use services is a priority for the Biden Administration, we urge Congress, as well as states across the nation, to pass legislation adopting the principles of the Wit district court decision to ensure fair and equitable treatment of patients with mental health and/or substance use disorders and hold insurance companies accountable.” You may read more here

You may also read a blog post from the Kennedy Forum regarding the ruling here

Groups Request Attorney General Weigh In

After the court’s ruling, various groups immediately reached out to the Department of Justice requesting Attorney General Bonta to consider issuing an amicus brief. You may view the full request from one such organization below. CSAP’s advocates at SYASL have been asked to weigh in with the Attorney General personally, which is in motion.

“We are reaching out regarding a deeply flawed federal court decision in the Wit v. United Behavioral Health (UBH) case. Last week, a three-judge panel of the U.S. Ninth Circuit Court of Appeals reversed the District’s court ruling that UBH violated federal law by making mental health and substance use disorder (MH/SUD) medical necessity determinations in a manner inconsistent with generally accepted standards of care. UBH was found to have used medical necessity denials as a way to “mitigate” compliance with the Mental Health Parity and Addiction Equity Act…

This reversal could also have devastating effects for the estimated 6 million Californians in a self-funded ERISA plans. For Californians in self-funded plans, state law coverage requirements do not apply. Thus, this decision, if it stands, gives insurers and plan administrators carte blanche to adopt any restrictive internal guidelines they wish for making medical necessity determinations, even if they are blatantly contrary to generally accepted standards of MH/SUD care or are otherwise contrary to plan terms. Insurers can now argue that their plans do not “mandate coverage for all treatment that is consistent with generally accepted standards of care” and therefore assert that they are entitled to complete deference to decide what is medically necessary, regardless of plan language.

Additionally, this reversal also has implications for fully-insured ERISA plans that are subject to California law, including Senate Bill 855…The District court found that UBH violated the state laws of Illinois, Connecticut, Rhode Island, and Texas that require specific criteria to be used for substance use disorder medical necessity determinations. Yet, the three-judge panel simply ignored the Wit State Mandate Class in reversing the District Court’s ruling. 

States should not remain silent while a federal appeals court ignores violations of states’ laws and throws out the legitimate claims for reasons unrelated to the merits of their claims. It is particularly important the federal courts not ignore violations of state laws in fully-insured ERISA plans, given that these claims are always invariably removed to federal court by defendants on the basis of subject matter jurisdiction. If federal courts fail to protect ERISA beneficiaries’ rights to have their fully-insured ERISA plans follow state laws, these beneficiaries are left with little recourse in the courts.  

For these reasons, it would be very powerful if Attorney General Bonta considered issuing an amicus brief in this case to support en banc review before the entire Ninth Circuit. We simply can’t go backwards—equal access to medically necessary care for mental health and substance use conditions for all should be enforceable under ERISA and is a matter of fundamental fairness. All Californians deserve these parity protections.”

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