Op-Ed: Insurers still don’t treat mental illness like other medical conditions

Last week, a federal court in San Francisco took a significant step toward accomplishing what Congress failed to pull off a decade ago: Pushing health insurers to pay for mental health care like they would any other medical treatment.

In a blistering 106-page ruling, U.S. Chief Magistrate Judge Joseph C. Spero found that United Behavioral Health devised medical review criteria that effectively discriminated against thousands of people seeking treatment for addiction or mental health disorders from 2011 to 2017. United Behavioral Health is a subsidiary that manages claims for UnitedHealth Group, the nation’s largest health insurer.

If higher courts uphold the California ruling in the event of an appeal, that will go partway to transforming the healthcare landscape. But for those suffering from mental illness or addiction everywhere to finally get a fair deal from their insurers, federal regulators and state insurance commissioners will have to step up enforcement.

When Congress passed the Mental Health Parity and Addiction Equity Act in 2008, it was celebrated as a milestone. For the first time, insurance companies were required to apply the same criteria in determining coverage for physical and mental illnesses. For instance, if an insurer doesn’t limit hospitalization to acute physical crises, then it can’t so limit inpatient treatment for individuals with mental health ailments.

It quickly became clear, though, that the parity law was not being enforced. Nearly a third of respondents to a 2014 National Alliance on Mental Illness survey said that they or a family member had been denied treatment for mental health by their insurer on medical necessity grounds. That was more than double the number who said they’d been denied medical care for physical ailments.

To be sure, the mechanisms eventually created for enforcement of the parity law were never very rigorous. (Some view this laxity as the Obama administration’s thank you to the insurance industry for supporting passage of Affordable Care Act.) Oversight ultimately landed with the Employee Benefits Security Administration, an already stretched-thin agency within the Department of Labor. Describing the challenges in a report to Congress in 2018, Labor Secretary R. Alexander Acosta wrote that there are about 400 investigators and 100 benefit advisors trying to oversee more than 5 million health, pension and other employee benefit plans. The EBSA also turned out to be toothless: It can’t assess civil monetary penalties — not even in “egregious cases of noncompliance to deter bad actors,” Acosta told Congress.

In fiscal years 2016 and 2017, EBSA issued only 136 citations for parity law violations.

Such limited enforcement left people like Amanda Brown of Texas at the mercy of United Behavioral Health’s profit-boosting criteria for determining what is medically necessary. As I reported late last year, Brown, whose son has bipolar disorder, has been waging a battle against the company since 2012. Her son tried to set fire to their house when he was 13. Last summer he was arrested and jailed in Arkansas for posting a photo of himself on Instagram holding a knife with a caption that read, “Time to shoot up a school.” And yet multiple times, United Behavioral Health had refused to authorize stays in long-term residential treatment facilities because the boy’s “acute” symptoms had subsided.

In 2015, when United Behavioral Health again rejected additional inpatient treatment, it sent a letter to Brown saying her son had received “extensive” inpatient and residential treatment over the last four years, yet he “continues to make threats to harm himself at home and shows no motivation to be safe in the community.” The company concluded that there is “no expectation that continuing acute medical health residential care” would make her son safe in the community within a reasonable time.

A spokeswoman for UnitedHealth told me the insurer empathizes with the Browns and believes their son has received “all medically necessary care.”

But in his ruling against United Behavioral Health, Judge Spero scolded the insurer for exactly that kind of maneuver: “addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.” Brown has received a notice saying she may be included in the class-action settlement in the California case.

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In the coming weeks, plaintiffs’ lawyers will be asking for specific remedies from United Behavioral Health. The court should require the company to not only change its guidelines going forward, but also reprocess old claims. It also should appoint an independent monitor to oversee the process, just as happened with truant financial services firms.

While this ruling is a big victory, it has limits. The immediate scope of the ruling is only the employer-sponsored health plans for which United Behavioral Health administers claims. That’s because the case was built on the insurer’s violation of its fiduciary duty to employer-based plans. More lawsuits may be needed to bring other insurers of employer plans into line — but that won’t help people with individual or public insurance policies.

With his sharp rebuke of United Behavioral Health, Spero is challenging federal regulators as well as state attorneys general and insurance departments to go after parity law violations — and essentially showing them the blueprint for how to do so. The feds and states need to rise to the challenge. Only then might everyone — not just families like the Browns — get the kind of mental health coverage from their insurers that they were promised a decade ago.

Business journalist Anita Raghavan was a Rosalynn Carter Mental Health Journalism Fellow. She is also the author of “The Billionaire’s Apprentice: The Rise of the Indian-American Elite and the Fall of the Galleon Hedge Fund.”

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