In prior articles, I have written about the Wit, et al v. United Behavioral Healthcare case. However, I may not have clearly explained why this case is so significant and will, on a national level, impact mental health care treatment.

So, why is the Wit case significant? Whatever final judgment is rendered in Wit will either have incredibly revolutionary or in the alternative, dangerous nationwide consequences.

Virtually every health plan in America works like the health benefit plans at issue in Wit.

Virtually every insurer in America uses commercial guidelines in its medical-necessity reviews.

Dozens of organizations, like the American Medical Association and the American Psychiatric Association filed explanatory briefs in Wit. They explained to the court system that allowing insurers to use their own internal guidelines which deviate from the medical community’s standards will have an enormous and devastating impact. Generally accepted standards of care will have little meaning if insurers are allowed to impose their guidelines upon their insureds especially when those guidelines were filtered through their own finance and accounting departments.

The attorneys representing Wit explained to the courts that the district court’s initial decision has been hailed as the “Brown v. Board of Education” decision for the mental health movement and that it is “one of the most important and most thorough rulings ever issued against an insurance company.”

To briefly recap, a federal magistrate judge certified the case as a class action proceeding thereby impacting as many as 50,000 insureds of UBH. On March 5, 2019, that judge issued a sweeping ruling holding that UBH on a class wide basis, violated its fiduciary duties to its insureds, improperly ran its treatment guidelines through its finance and accounting departments, and improperly denied payment for necessary treatment. The ramifications and remedies for this bad faith conduct were then yet to be determined.

Shortly thereafter, the consequences for UBH’s bad faith conduct were established.

UBH was ordered to reprocess 67,000 claims it wrongfully denied for 50,000 people from 2011 to 2017. The district court entered a permanent injunction against UBH requiring UBH to evaluate claims using independent guidelines developed by professional mental health associations instead of its internal guidelines, which it had previously used to protect its bottom line. The injunction also required training of UBH personnel in the use of court-ordered medical necessity criteria.

As expected, UBH appealed the decision to the 9^th Circuit Court of Appeals. In 2022, after hearing oral arguments, a three (3) judge panel issued a shockingly curt opinion reversing the district court’s judgment. This short ruling was designated “not for publication” (therefore, should not have been used as precedent in other cases), was dismissive and could have been the death knell for hundreds of thousands of persons suffering from mental illnesses.

Because Wit’s attorneys petitioned for a rehearing, in January of 2023, the three (3) judge panel threw out their first opinion and published a longer, more substantial opinion. On the positive side, it affirmed some significant findings from the trial court, including in particular, that UBH breached its fiduciary duties by putting its own financial interests above those of its insureds when adopting and applying its internal guidelines. This finding reopens the door for significant injunctive and declaratory relief. 

At the same time, other key holdings worsen the ability for private parties to seek payment for medical care. In addition, the opinion could result in ERISA Administrators using overly restrictive guidelines designed to save money and not lives.

In response, Wit’s attorneys again petitioned for a rehearing or to have all 29 judges on the 9^th Circuit hear oral arguments and issue a new opinion. If that fails, the US Supreme Court could decide all issues.

Wit’s attorneys assertively pointed out that the three (3) judge panel’s decision is disastrously wrong and will result in disastrous consequences for the millions of mental health and addiction patients.

Finally, the 9^th Circuit was advised that the first panel’s holding that, contrary to the UBH insurance plans’ plain terms, UBH can evaluate medical necessity using its finance department’s preferred standards rather than the medical community’s standards and that is morally, ethically and legally wrong. As dozens of organizations have told the 9^th Circuit, this conclusion is both wrong and an incalculable setback in the nation’s fight against the mental health and addiction crisis.

If the the three judge panel’s decision is allowed to stand, a blueprint will be established as to how insurance companies can get around the Mental Health Parity Act of 2008 by simply establishing their own internal guidelines and ignoring generally accepted standards of care. The dollars will continue to flow to insurance companies in tsunami like fashion, and lives will continue to be lost in riptide like fashion.

Instead of continuing to pontificate, the following demonstrates the crisis we are faced with today: