Department of Labor Settles with UnitedHealth Over Behavioral Coverage

On Wednesday a case was filed by the Department of Labor on behalf of ERISA health plan beneficiaries against UnitedHealth Group (UHG) and its subsidiaries, especially United Behavioral Health (UBH). The suit was accompanied by a press release from the Department of Labor announcing that UnitedHealth will settle the case, which concerned the payment of mental and behavioral health claims.

The press release stated that UHG will pay $15.6 million, with most $13.6 million going to affected participants and the remainder in penalties.

 The underlying complaint is based on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) which prohibits ERISA-covered health plans from imposing treatment limitations on mental health and substance use disorder benefits that are more restrictive than the treatment limitations they impose on medical and surgical benefits. ERISA insurance plans and their fiduciary administrators, which UHG and UBH are for many plans, are required to ensure that they do not have disparate policies, processing rules, or outcomes from the processing that impact the beneficiaries in a disparate manner.

UBH was accused of violating MHPAEA in two different manners. The first manner concerns the processing of claims from psychologists and non-psychiatrist mental health providers. When processing out of network claims, UBH allegedly imposed an allowable pricing reduction, but it also imposed an across the board reduction in the amount approved for payment by the plan for these providers in the amount of 25-35%. Comparatively, when UHG processed medical claims, there was no automatic reduction in the amount paid. This reduction resulted in higher level patient payments and there was no notification of this reduction amount in the plan guidance, which also violated the provisions of ERISA.

The second manner concerns UBH’s process regarding billing selected for higher level review. According to the complaint, insurance companies review a percentage of claims that have been submitted for payment for medical necessity as well as fraudulent billing. This process allegedly results in delayed payment of claims and a higher percentage of rejected claims, which results in higher costs to the patient as well. UBH is accused of selecting all mental health claims where there had been 21 visits within a six month period. Comparatively, UHG did not do so for high frequency medical treatments such as physical therapy.

“Protecting access to mental health and substance use disorder treatment is a priority for the Department of Labor and something I believe in strongly as a person in long-term recovery,” said U.S. Secretary of Labor Marty Walsh in the press release.

“This settlement provides compensation for many people who were denied full benefits and equitable treatment. We appreciate Attorney General Letitia James and her office’s partnership in investigating, identifying and remedying these violations.”

This story has been updated to reflect the announcement of a settlement between UnitedHealth and the Department of Labor.