Appellate court reverses class-action win in UnitedHealth reprocessing case

A federal appellate court reversed a pair of lower court decisions that required UnitedHealth Group's behavioral health unit to reprocess 67,000 previously denied mental health and substance abuse claims, according to Law360.

The March 22 decision reversed a California federal judge's November 2020 order for United Behavioral Health to reprocess the claims and the judge's underlying March 2019 ruling in the class action lawsuit that the claims were improperly denied.   

The 9th Circuit appellate judges ruled that although the plaintiffs showed they had standing to sue, the lower court was wrong in finding the insurer abandoned its duties under the Employee Retirement Income Security Act, according to Law360. 

In his March 2019 ruling, U.S. District Court of Northern California Judge Joseph Spero said UnitedHealth's internal policies for mental health coverage were "unreasonable and an abuse of discretion" and "infected" by financial incentives. 

The appellate judges disagreed with the lower court judge that the insurer abused its discretion in interpreting the health benefit plans' language.  

"UBH’s interpretation — that the plans do not require consistency with the (generally accepted standard of care) — was not unreasonable," the majority said in its ruling. 

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