On August 12, 2021, the DOL announced that United Behavioral Health and United Healthcare Insurance Co. (collectively “United”) settled a lawsuit initiated by the agency and the New York State Attorney General’s Office. The suit was initiated after the Employee Benefits Security Administration investigated United based on allegations that, since at least 2013, United “reduced reimbursement rates for out-of-network mental health services, thereby overcharging participants for those services, and flagged participants undergoing mental health treatments for a utilization review, resulting in many denials of payment for those services.” United agreed to pay $13.6 million to affected participants and beneficiaries; pay $2,084,249 in penalties; and take other corrective action to resolve the dispute.
The agency stated that the allegations against United are violations of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The MHPAEA prohibits ERISA plans from imposing treatment limitations on mental health and substance use disorder benefits that are more restrictive than the treatment limitations they impose on medical and surgical benefits. As a result of these violations, participants and beneficiaries of ERISA plans did not receive the mental healthcare that they were entitled to. In addition, United failed to provide sufficient information about what it did to these plans.
In addition to paying restitution and penalties, United agreed to stop following the procedures that resulted in the alleged violations. United used an algorithm called the ALERT system that would deny claims if a clinical review determined that a utilization review was needed because the claim was for a product or service deemed medically unnecessary. United’s use of the ALERT process led to the denial of the mental healthcare claims at issue in the case.
The settlement highlights the focus that the agency is placing on violations of the MHPAEA, particularly violations involving reimbursement rates. Employers should be aware of these developments and work with their carriers and TPAs to ensure that they are in compliance with the law.
DOL Press Release » Settlement Agreement »