By: Amy Marschall, PsyD, Freelance Columnist

In May 2014, David Wit, Natasha Wit, and Brian Muir filed a class-action lawsuit against United Behavioral Health (UBH). The lawsuit alleged that UBH improperly denied thousands of claims for mental health services, citing that the services were not “medically necessary.” A ruling from the United States District Court of Northern California in 2019 indicated that UBH “was wrong to deviate from the widely accepted clinical standard of care for mental health and addiction.” The judge ordered UBH to reprocess more than 60,000 denied claims.

Unfortunately, UBH appealed, and in March 2022, a panel reversed the ruling. Following additional appeals, on January 26, 2023, a three-judge panel ruled that the March 2022 ruling would stand. Essentially, this ruling upheld UBH’s right to deny coverage for mental health and addiction services for their customers.

History of Mental Health Care Coverage

Historically, mental health coverage has not been a priority in the United States. Until recently, many healthcare plans simply did not cover mental health or addiction treatment, much like how most health care plans do not cover dental or vision unless supplemental insurance is purchased.

In 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) became federal law which “prevents group health plans and health insurers that provide mental health or substance use disorder (MH-SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits.” In other words, health insurance providers cannot offer substandard mental health coverage compared to their medical coverage.

In 2013, the Affordable Care Act (ACA) expanded on this law, categorizing mental health and substance use disorder treatment under “essential health benefits” and requiring that insurance plans cover these services.

The Implications of Wit Vs UBH

Since the ACA expanded requirements around mental health and substance use disorder coverage in 2013, insurance companies have been required to provide coverage for these services in their plans and reimburse providers for these services. The Wit vs UBH ruling makes it much easier for insurance companies to deny non-emergency mental health care by claiming that the services are not “medically necessary.”

Unfortunately, “medically necessary” is a vague term that does not have a clear, concrete definition, which often results in denials of coverage without a specific reason.

Have you been struggling with mood or anxiety symptoms and feel that therapy could help you? Your insurance company may decide that your difficulties are not severe enough to warrant treatment. Do you suspect you might have ADHD and want to know your diagnosis so that you can pursue treatment options tailored to you? Your plan may simply not cover psychological assessments, which can cost thousands of dollars. Have you been using a substance to cope with life stressors and want support in recovering from addiction? The company may decide that your issues are not severe enough for them to pay for treatment.

With Wit vs UBH making it even easier for insurers to deny coverage for mental health and substance use treatment, providers may be less able to accept insurance. Currently, due to low reimbursement rates, long waits for payment, and arbitrary denials, only about one in five mental health professionals in the United States currently accepts health insurance. If this ruling is upheld, more therapists might find that billing becomes unsustainable and stop accepting insurance.

Even if clients find a therapist who accepts their insurance, the company may deny coverage for mental health care altogether, leaving them on the hook for the out-of-pocket cost of services anyway. With millions of people already struggling to pay high premiums, co-pays, and thousands of dollars in deductibles, many will simply not have the option to see a therapist. The mental health crisis will only escalate.

Since insurance plans are still required to cover emergency services, this may lead to an increase in psychiatric hospitalization. Refusing to cover outpatient therapy eliminates preventative care, which means more people could experience mental health crises. Additionally, if inpatient is the only resource available, more people may seek it out since they have no other options. This would put even bigger strain on our hospital systems.

What Does This Mean for Insurance Companies?

Coverage denials exist to increase insurance companies’ profit margins. By denying coverage, the company makes more money. In 2022, several insurance companies made record profits (including United Health).

Ironically, though, eliminating mental health coverage could cost them more money in the long run. In 2022, the average hospital stay cost more than $2,800 per day, and the average outpatient therapy session cost $90. Most psychiatric hospitalizations last a minimum of 72 hours. That’s an estimated $8,400 for a hospitalization, the cost of about 93 outpatient therapy sessions. Every person hospitalized potentially could see a therapist twice a week for the entire year for the same cost. This is without calculating the cost to the economy from folks missing work because they are in the hospital.

Of course, with ever-increasing deductibles, much of this cost could simply fall on the individual.

What Can You Do?

It is easy to feel powerless as insurance companies continue to increase prices, reduce coverage, and report record-breaking profits. Continue pressuring your representatives to prioritize healthcare reform that includes mental health and substance use treatment. Tell them that we need laws that oversee insurance companies and hold them accountable when they deny coverage. As long as insurance companies have the option to deny coverage, they will continue refusing to pay for services that you need.

If you have health insurance, contact them prior to seeking services. If possible, find out from your provider what billing codes they use, and ask the insurance company about coverage for those specific codes. Request the name of the representative you speak with and a reference number for the call. While this does not guarantee coverage (usually these calls include a statement that “Confirmation of coverage is not a guarantee of payment,” essentially stating that they are allowed to change their minds or outright lie to you), it can help you push for payment if you have to appeal a denial.

If you receive a denial, call the insurance company and ask for the reason for the denial. Ask them also to appeal their decision. Sometimes ongoing pressure can lead to payment due to the labor that goes into re-submitting appeals.

Healthcare reform continues to be an uphill battle, one that we have to keep fighting.