Decision Rips Largest Health Insurance Carrier

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UnitedHealthcare slammed for violations of federal and Texas law

A federal judge in Northern California released a 106 page decision Tuesday which held that UnitedHealthcare fraudulently created guidelines that denied benefits to its members solely to save money.  The court found that United’s mental health subsidiary had used self-serving guidelines to justify the denials of badly needed mental health treatment for over six years. The guidelines conflicted with generally accepted medical standards as well as federal and state law, including our statutes in Texas. The story sounds like it came from a John Grisham novel like The Rainmaker.

Judge Joseph Spero wrote that the primary factor in the development of internal company guidelines was the maximization of profit, not adopting generally accepted medical practices. The provider had focused on its ‘bottom line as much or more” than the health of its policyholders and had illegally denied badly needed treatment to thousands of them.

UnitedHealthcare is the nation’s health largest insurance company and is one of the top 20 largest corporations in the United States. This year its revenues are estimated to be a whopping $245 billion.

The case

The class action lawsuit was filed by two groups of patients in 2014 on behalf of 50,000 consumers who had been denied coverage for their mental health treatment and substance abuse rehabilitation. They alleged that United’s guidelines violated federal ERISA and four state’s laws by requiring them to have first suffered an acute crisis and then continually progress toward recovery. Further the guidelines did not consider the unique needs of children and excluded payments for services that maintained a level of function or prevented deterioration.

United’s motion for summary judgment on claims that it had violated Texas law was denied.

The court found that all of United’s experts, including numerous physicians, were deceptive when they testified.

The court will decide damages and remedies in the coming months. The only saving grace for United was that the plaintiffs were not entitled to seek disgorgement of the profits the massive corporation made when it denied claims. United has announced that it is appealing the decision.

The decision and all documents in this landmark case are here.

Impact of decision

Legal commentators have termed the ruling as one of the most important and well researched federal decisions against an insurance company regarding mental health issues.

Patrick Kennedy, the former U.S. representative from Rhode Island and patient advocate, termed the decision “breathtaking” and compared it to the Supreme Court’s landmark Brown v. Board of Education decision.

It hasn’t been a good quarter for United in court. In January, the California Supreme Court fined United $91 million for a whopping 900,000 plus violations of state law and denials of payments.

How this decision might affect you

If you have been denied health insurance coverage, perhaps this decision can be used to allow you to recover the benefits you are due. You can be sure other health insurance companies were following this case closely and may already be rewriting their legal and financial strategies.

Hopefully, a similar lawsuit will be filed in Texas and a decision will follow after benefits for physical injuries such as those suffered by people after car crashes and other personal injuries are wrongfully denied. This is unfortunately routine in our state. Stay tuned.

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