While an attempt by the Senate Finance Committee to unmask secretive drug industry pricing has been in the news lately, another case that could have far-reaching results for insurance company procedure was recently decided in a federal court in California.
In March, a federal judge issued a ruling in a class-action case brought by several patients against United Behavioral Health (UBH), a subsidiary of UnitedHealth Group.
Judge Spero of the U.S. District Court of Northern California sided with the plaintiffs in their allegations that they were denied mental health care benefits improperly. The plaintiffs said that the insurance company did not “comply with the terms of their insurance plan and/or state law.”
In the document, the Court found that “UBH’s Guidelines were unreasonable and an abuse of discretion because they were more restrictive than generally accepted standards of care.” The chief magistrate wrote that “UBH is liable with respect to the Denial of Benefits Claim.”
The system for determining coverage was “flawed” he wrote because it was too focus on “UBH’s financial interests” rather than on best-practice patient care.
In many cases, private insurers do not disclose how coverage guidelines are written, which can make it difficult to determine if true parity exists between mental health and physical health care.
With a court case forcing UBH to be open about how decisions are made, there is hope that this could lead to greater transparency.
“Insurers have their own set of internal guidelines that are proprietary in nature as well as algorithms used to determine how much they will pay for certain services,” said Jennifer Warkentin, Ph.D, director of professional affairs for the Massachusetts Psychological Association, “It makes it hard to determine parity because we don’t see the decision-making process. In this case, they were able to bring those internal guidelines to the light of day.”
The judge found that the company allowed its finance department to make decisions, and even to veto decisions, around coverage guidelines rather than “insulating its guideline developers from…financial pressures.”
He also found that the insurance company was more focused on handling acute illness rather than on the treatment of on-going conditions, commenting that this focus resulted in a “significantly narrower scope of coverage than is consistent with generally accepted standards of care.”
“The judge acknowledging the fiduciary duty of insurers to their insured members, rather than to their shareholders highlights the on-going challenges with healthcare reimbursement managed by companies responsible for insuring the financial benefit of this to shareholders,” said Julie Wolter, Psy.D.
Wolter is chair of the New Hampshire Psychological Association’s Behavioral Healthcare Advocacy Committee and a licensed psychologist with a practice in New Hampshire and Rhode Island.
“It’s very difficult to have ethical decision-making that results in patients getting what they need given the demand for profit,” she said.
When for-profit companies must make health decisions, all while making money for shareholders, the result can be less-than-optimal for consumers.
“Those two bottom lines (e.g., ethical and comprehensive care vs. financial gain for the insurance company and shareholders) clearly don’t work easily together,” Wolter said.
“Hopefully from this case, we’ll see positive changes from all insurers that will reduce ongoing pressure that clinicians experience when trying to provide effective care under the constraints of a profit-driven system.”
Whether the case will bring about any monumental changes in the health care/insurance world remains to be seen.
“In the short term we probably won’t see any huge changes as a result,” said Warkentin. “The court has not come back to weigh in on what should be done, only that the internal guidelines are inappropriate. It is hard to say where it will go from here without knowing what will happen with this case. Depending on what happens it may or may not be much of a deterrent for insurance companies.”
The case took several years to play out, and Warkentin hopes that it will inspire further investigation into the way parity is handled internally at insurers.
“My hope is that this will continue and people will continue to be concerned about everyone being able to access mental health and substance abuse coverage,” she said.
Catherine Robertson Souter is a freelance writer and social media agent based in New Hampshire. A contributor to New England Psychologist since its inception, she previously wrote for Massachusetts Psychologist among other media outlets.