Erica A. Erman, JD

The importance of accessible quality behavioral health services is gaining increased attention among millennials, Gen Z, and healthcare professionals. But historically, behavioral health has been considered less important than physical health, meaning it has also received less funding and support.

Recognizing the need for change, the federal government passed the 

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008

 (the Parity Act), which mandates that behavioral and physical healthcare be treated equally.

In practice, this requires insurance companies to amend coverage guidelines, which traditionally focused on physical health, to more fully include behavioral health. Recent cases are helping put the ideals of the Parity Act into practice by ruling against parties who continue to treat behavioral health and physical health disparately.

Last year, the Ninth Circuit clarified the full extent of “parity” in 

, 891 F.3d 1155 (9th Cir. 2018). In March 2019, the U.S. District Court in the Northern District of California added fuel to the flame in its 106-page ruling of the class action case 

, which underscores the dangers of sacrificing quality behavioral healthcare for an insurance company’s financial gain.

, the plaintiffs asserted two claims against UBH under the 

Employee Retirement Income Security Act of 1974 (ERISA)

: breach of fiduciary duty and arbitrary and capricious denial of benefits.

Because the insurance plans at issue were ERISA-governed health benefit plans, they were subject to federal laws, including the Parity Act. The plaintiffs argued that UBH's Level of Care Guidelines and Coverage Determination Guidelines were fundamentally flawed because they fell short of the generally accepted behavioral health standards of care and based coverage decisions on financial concerns rather than on best practices.

The court ruled the guidelines were tainted by UBH’s financial department, which were significantly involved in their development. Additionally, the court ruled that the evidence showed the guidelines were used to mitigate the impact of the Parity Act.

Page 2: Evidence-based standards of care for behavioral health

Based on credible, objective evidence from multiple sources produced at trial, the court determined the eight following principles to be generally accepted standards of care among behavioral health professionals:

Effective treatment requires treatment of the individual’s underlying condition and is not limited to alleviation of the individual’s current systems.

Effective treatment requires treatment of co-occurring behavioral health disorders and/or medical conditions in a coordinated manner that considers the interactions of the disorders and conditions, and their implications for determining the appropriate level of care.

Patients should receive treatment for mental health and substance use disorders at the least intensive and restrictive level of care that is safe and effective.

When there is ambiguity as to the appropriate level of care, the practitioner should err on the side of caution by placing the patient in a higher level of care.

Effective treatment of mental health and substance use disorders includes services needed to maintain functioning or prevent deterioration.

The appropriate duration of treatment for behavioral health disorders is based on the individual needs of the patient. There is no specific limit on the duration of such treatment.

The unique needs of children and adolescents must be taken into account when making level of care decisions involving their treatment for mental health or substance use disorders.

The determination of the appropriate level of care for patients with mental health and/or substance use disorders should be made on the basis of a multidimensional assessment that takes into account a wide variety of information about the patient.

The court found UBH fell short of these standards. The court further stated that UBH based its coverage decisions for Transcranial Magnetic Stimulation, a treatment for major depressive disorder, and Applied Behavior Analysis, a treatment for autism spectrum disorder, based on how authorization of coverage would negatively affect UBH’s bottom line.

Page 3: Key takeaways from the court’s ruling 

5 lessons learned for providers and payers

The court's ruling contains several lessons for providers about their own practices and that of their patients' insurers:

Financial self-interest should never be a critical consideration as to whether or not to offer coverage.

Insurers should not give their finance department the equivalent of veto power over medical and patient care decisions.

Make sure you are meeting or exceeding the generally accepted standards of care in the behavioral health field, as public support for quality behavioral healthcare will continue to increase.

Know that courts are willing to enforce the quantitative and qualitative components of the Parity Act.

Be aware that level of care and coverage determination guidelines can form the basis for fiduciary duties between a covered member and his/her insurance company.

Supplying and encouraging quality patient care is an expected duty. It is not a responsibility that should be taken lightly and certainly one that should never be sacrificed on the altar of financial self-interest.

Erica A. Erman, JD, is an associate attorney at Dickinson Wright in Phoenix, Ariz. Her practice areas include healthcare, behavioral healthcare, appellate, and general litigation law. Prior to joining Dickinson Wright, she served as a Judicial Law Clerk to the Honorable Robert M. Brutinel of the Arizona Supreme Court. Erica graduated cum laude from the James E. Rogers College of Law at the University of Arizona.

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A recent court ruling illustrates the risk of failing to place behavioral health coverage needs ahead of financial interest.

Author | Erica A. Erman, JD

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