Insurance Giant Hit With Class Action Alleging Underpayment for Mental Health Visits
United HealthCare Insurance Co. is accused of imposing arbitrary reimbursement penalties for psychotherapy provided by psychologists and master's-level counselors rather than doctors.
October 17, 2018 at 06:35 PM
3 minute read
Affiliates of UnitedHealth Group Inc., the nation's largest health insurer, were hit with a class action lawsuit Tuesday claiming they are illegally underpaying reimbursements for mental health services.
According to the complaint filed in the U.S. District Court for the Northern District of California, United HealthCare Insurance Co. (UHIC) and United Behavioral Health imposed arbitrary reimbursement penalties for certain psychotherapy services provided by psychologists and master's-level counselors rather than doctors.
The plaintiff, a Pennsylvania woman asking to proceed anonymously because of the “pervasive stigma” of mental illness, claimed UnitedHealth reduced the “eligible expense” of covered charges from her master's-level counselor by 35 percent, rather than no reduction at all for identical services should she have received the same treatment from a physician.
The Jane Smith plaintiff claimed that difference violates provisions of the Employee Retirement Income Security Act, which prohibit discrimination with respect to mental health and substance use disorder benefits and the Affordable Care Act, which prohibits discrimination in coverage against psychologists and master's-level counselors when they act within the scope of their licenses under applicable state law.
The suit, filed by lawyers at Zuckerman Spaeder and Psych-Appeal, Inc., a Los Angeles-based law firm exclusively dedicated to mental health insurance claims, also claimed that UnitedHealthcare breached its fiduciary duty to patients.
“United sacrificed the interests of insureds so that it could artificially decrease the amount of benefits it was required to pay from its own assets (i.e., with respect to fully insured plans) and the assets of its employer-sponsor customers (i.e., with respect to self-funded plans),” the lawyers wrote. “Moreover, by prioritizing the assets of its employer-sponsored customers over the interests of participants and beneficiaries, United also advanced its own interests in retaining and expanding its business with such customers.”
Plaintiffs are seeking to certify a class of “thousands of subscribers” nationwide to seek reprocessing of all wrongfully reduced claims and an injunction barring the differing reimbursement practices going forward.
A spokeswoman for UnitedHealthcare didn't immediately provide comment on the suit when contacted Wednesday.
Read the complaint:
Correction: An earlier version of this story mistakenly stated that the plaintiff's insurance claim would have been reduced 25 percent should she have received the same treatment from a physician. In fact, she claims there would have been no reduction should she have been treated by a physician.
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