Insurer Dogged by Claim of Mental Health Bias

     MANHATTAN (CN) – An attorney hailed the Second Circuit for its “watershed” decision Thursday to advance claims about unequal insurance coverage for mental illness.
     The New York State Psychiatric Association filed the class action at issue in 2013, claiming that UnitedHealth Group and three subsidiaries had violated federal laws that bar insurers from placing too many restrictions on the treatment of mental health or substance-abuse disorders.
     Jason Cowart with the NYSPA said in a phone interview that the insurer was trading on a loophole in the Mental Health Parity and Addiction Equity Act, a “landmark” decision passed in 2008 that met with a “very lackluster record of enforcement.”
     “One of the reasons that it wasn’t enforced was you had an incongruity in the law,” Cowart said. “On the one hand, there was the notion that you could not sue a claims administrator for violations of the Parity Act, but claims administrators are the ones making all of the relevant decisions.”
     Based on this perceived limitation, U.S. District Judge Colleen McMahon dismissed the complaint against UnitedHealth in 2013.
     The NYSPA and its co-plaintiffs, a psychiatrist and a patient, fared better on appeal to the Second Circuit, which found that the “plain terms” of the law allow for lawsuits against any claims administrator that is a “logical defendant” in Parity Act cases.
     “Even if the statutory text were ambiguous, United fails to point us to any legislative history or agency interpretation that refutes our understanding of the statute as it applies to claims administrators who exercise total control over the benefits claims process,” Judge Raymond Lohier wrote for a three-person panel.
     NYSPA also has standing as an association to sue the insurer on behalf of its members, the court found.
     Jonathan Denbo, a brand-marketing director at CBS Sports Network diagnosed with a mild form of depression, can also pursue his claims that UnitedHealth violated federal law protecting employee benefits for him and others in his position, according to the ruling.
     Cowart, the plaintiffs’ lawyer, hailed the ruling as “very significant,” “major” and even “watershed.”
     The American Psychiatric Association did not immediately respond a request for comment.
     A UnitedHealth spokesman told Courthouse News, “We consistently help people access proven mental health and substance abuse treatments to ensure they get the right care at the right time in the right setting. While we are still reviewing the decision, we believe this opinion is inconsistent with the way this court has addressed similar cases in the past, so we are evaluating our options for further action.”

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