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Wit v. United Behavioral Health

United States District Court for the Northern District of California

February 28, 2019, Decided; March 5, 2019, Filed

Case No. 14-cv-02346-JCS; Related Case No. 14-cv-05337 JCS

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

REDACTED

I. INTRODUCTION

Defendant United Behavioral Health ("UBH"), which also operates as OptumHealth Behavioral Solutions, administers mental health and substance use disorder benefits for commercial welfare benefit plans. In that capacity, it has developed Level of Care Guidelines and Coverage Determination Guidelines (collectively, "Guidelines") that it uses for making coverage determinations. Plaintiffs in these related class actions assert claims under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., alleging that they were improperly denied benefits for treatment of mental health and substance use disorders because UBH's Guidelines do not comply with the terms of their insurance plans and/or state law. The Court conducted a 10-day bench trial and now makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).1 The parties have consented to the jurisdiction [*7]  of the undersigned magistrate judge pursuant to 28 U.S.C. § 636(c).

II. FINDINGS OF FACT

The Parties

1. Defendant UBH administers insurance benefits for behavioral health services, including diagnosis and treatment of mental health conditions and substance use disorders. Trial Ex. 880-0004 (Stipulations of Fact) ¶¶ 1, 2. In this role, UBH administers requests for coverage on behalf of members of health benefit plans governed by ERISA, including the health benefit plans of the class members in these actions (collectively, the "Plans"). Id. ¶ 3.

2. Named Plaintiffs in this case are as follows: David and Natasha Wit, Brian Muir, Brandt Pfeifer, Lori Flanzraich, Cecilia Holdnak, Linda Tillitt, Gary Alexander, Corinna Klein, David Haffner and Michael Driscoll. Each of the named Plaintiffs was at all relevant times a beneficiary of an ERISA-governed health benefit plan for which UBH acted as a claims administrator. Id. ¶ 4.2

3. David and Natasha Wit: At all times relevant to UBH's liability, David Wit was a participant in the "Insperity Group Health Plan" (the "Wit Plan"), a healthcare policy issued by UnitedHealthcare Insurance Company. Trial Ex. 245 (Wit Plan). Mr. Wit's daughter, Natasha Wit, was a beneficiary [*8]  of the Wit Plan. Trial Ex. 246-002. The Wits sought coverage under the Wit Plan for Natasha's residential treatment at Monte Nido Vista.3 Trial Ex. 246-0002. UBH issued a Clinical Non-Coverage Determination on May 3, 2013 denying coverage for Natasha's residential treatment from April 30, 2013 forward. Trial Ex. 246-0002 to -0007. On the same day, UBH issued a written notification of the adverse benefit determination, citing its 2013 Level of Care Guidelines as the basis for the denial, stating: "It is my determination that the member's treatment does not meet the medical necessity criteria for residential mental health treatment per UBH Level of Care Guidelines for Residential Mental Health treatment . . . ." Trial Ex. 246-0002. The Wits appealed UBH's adverse benefit determination. Trial Ex. 246-0008. UBH denied the appeal on May 3, 2013, again citing its Level of Care Guidelines for Residential Mental Health Treatment, and informed the Wits, "[t]his is the Final Adverse Determination of your internal appeal. All internal appeals through UBH have been exhausted." Trial Ex. 246-0009.

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2019 U.S. Dist. LEXIS 35205 *; 2019 WL 1033730

DAVID WIT, et al., Plaintiffs, v. UNITED BEHAVIORAL HEALTH, Defendant.GARY ALEXANDER, et al., Plaintiffs, v. UNITED BEHAVIORAL HEALTH, Defendant.

Prior History: Wit v. United Behavioral Health, 2014 U.S. Dist. LEXIS 162849 (N.D. Cal., Nov. 20, 2014)

CORE TERMS

Guidelines, coverage, patient, Custodial, residential, disorders, acute, clinical, symptoms, intensive, safe, adolescents, outpatient, co-occurring, Manual, chronic, fiduciary, bullet, inpatient, stabilization, exhaustion, clinicians, crisis, Rehabilitation, dimensions, placement, deterioration, credible, revised, psychiatric

Healthcare Law, Insurance Coverage, Health Insurance, Medical Necessity, Governments, Legislation, Interpretation, Pensions & Benefits Law, Civil Litigation, Causes of Action, Suits to Recover Plan Benefits, Remedies, Equitable Relief, Injunctions, Business & Corporate Compliance, Fiduciaries, Fiduciary Responsibilities, Duty of Loyalty, Duty of Prudence, Exhaustion of Administrative Remedies, Breach of Fiduciary Duty, Plan Administration, ERISA, ERISA Pension Plan Qualification Requirements, Basic Plan Requirements, Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Causes of Action, Prohibited Transactions, Self Dealing