NEW YORK, NY--(Marketwired - Aug 20, 2015) - In a precedent-setting decision, the United States Court of Appeals for the Second Circuit ruled today that claims administrators who exercise "total control" over health plans may be sued for breaching their fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA"). The appeals court ruled that a state psychiatric association may also sue in a representational capacity on behalf of its psychiatrist members and their patients to seek broad-based injunctive for violations of mental health parity mandates.
The Second Circuit's ruling sends New York State Psychiatric Association, Inc. et al. v. UnitedHealthGroup et al. back to the United States District Court for the Southern District of New York (Manhattan). The class-action lawsuit alleges that UnitedHealthGroup, UnitedHealthcare and United Behavioral Health (operating as OptumHealth Behavioral Solutions) breached their fiduciary duties under ERISA by violating the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. Specifically, the defendants are alleged to have imposed stringent treatment limitations on mental health benefits that are not imposed on medical benefits, such as the requirements for concurrent reviews with forward-looking restrictions on outpatient treatment that are essentially tantamount to preauthorization.
"The ruling is exceptional for a variety of reasons," explained Meiram Bendat of Psych-Appeal Inc., co-counsel for the plaintiffs. "The Second Circuit clearly understood that patients should not have to sue their employers, who are typically the benefit sponsors, to enforce parity compliance by claims administrators who act as health plan fiduciaries."
Co-counsel Brian Hufford of Zuckerman Spaeder, LLP argued the case in the Second Circuit and added that, "Today's ruling clears the way for the New York State Psychiatric Association to seek broad-based injunctive relief on behalf of its psychiatrist members whose patients have been discriminated against by United. Associational standing is crucial to preserve access to justice for healthcare providers combatting the stigma of mental illness."
The federal parity law was championed by former United States Congressman Patrick J. Kennedy, a long-time mental health advocate whose position in this case was supported by amicus briefs from the United States Department of Labor, American Medical Association, American Psychiatric Association and the Parity Implementation Coalition.
Interested parties may contact Meiram Bendat at mbendat@psych-appeal.com or Brian Hufford at dbhufford@zuckerman.com.
About Psych-Appeal Inc.
Los Angeles-based Psych-Appeal Inc. is a law firm exclusively dedicated to mental health insurance claims, advocating on behalf of patients, clinicians and treatment facilities to overcome insurer denials of treatment. For more information, visit www.psych-appeal.com.
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Chantal Allan
310-598-3690 x.201