Zuckerman Spaeder Files Class Action Complaint Against United HealthCare Insurance Co. and United Behavioral Health For Violation Of Mental Health Parity Laws


Zuckerman Spaeder LLP, and Psych-Appeal, Inc. filed a class-action complaint in the U.S. District Court for the Northern District of California, alleging that United HealthCare Insurance Co. (“UHIC”) and United Behavioral Health (together, “United”) have systematically violated the legal duties owed to plan participants by imposing arbitrary reimbursement penalties on psychotherapy rendered by psychologists and master’s level counselors.

The complaint was filed by Zuckerman Spaeder partners D. Brian Hufford, Jason Cowart, and Shawn Naunton, along with co-counsel Meiram Bendat from Psych-Appeal, Inc., on behalf of an individual formerly insured by UHIC ("the plaintiff") and a class of claimants who allege that they have similarly been subject to arbitrary reimbursement penalties. This case is part of Zuckerman Spaeder’s ongoing effort to defend the rights of behavioral health patients from improper denials and discrimination by health insurers.

The dispute in this lawsuit concerns the amount United would pay for plaintiff's covered treatment for her post-traumatic stress disorder, which included individual counseling from a Licensed Clinical Social Worker (LCSW) with post-graduate training. The provider was considered out-of-network, and therefore benefits were determined based on an "eligible expense," which is the maximum amount eligible for reimbursement.

The plaintiff in this case alleges that United has a policy in place that reduces the "eligible expense" of covered charges by 25 percent when provided by a psychologist and 35 percent when provided by a master's level counselor (i.e., an LCSW). As a result, anyone receiving psychotherapy services from a psychologist or social worker is subject to reduced reimbursements. The plaintiff argues that these arbitrary reimbursement penalties violate the Federal Parity Act and the Affordable Care Act by discriminating against certain behavioral health providers and patients.

"We believe United is clearly violating its duty to plan holders by imposing arbitrary reimbursement penalties," said lead counsel for the plaintiff, D. Brian Hufford. "Through these penalties, United is devaluing psychotherapy and is ultimately limiting access to an essential health benefit that plays a critical role in addressing pervasive public health issues, such as mental health and substance abuse disorders."

"We have seen the data from NIH – that 26 percent of American adults suffer from some type of mental health condition each year – and that outpatient psychotherapy is crucial to the ongoing treatment and recovery for those who suffer from these conditions,” said Cowart, co-counsel for the plaintiff. “Yet we still see examples like this one, of private insurance companies taking steps to systematically deny or diminish mental health benefits to plan holders. We continue to fight to hold insurers accountable for this kind of discriminatory behavior."

Nell Peyser, lead Zuckerman Spaeder associate, stated that “This is yet another case highlighting allegations regarding an insurance company’s insensitivity to the plight of some of its most vulnerable insureds, those who suffer from mental health conditions.”

Zuckerman Spaeder has developed a national practice representing patients and health care providers such as doctors, hospitals, and medical equipment companies in disputes with health insurance companies. Their groundbreaking application of ERISA and other related federal and state laws has resulted in numerous precedent-setting wins, including two of the largest recoveries ever obtained in health insurance class actions. 

Psych-Appeal, Inc. is a Los Angeles-based law firm exclusively dedicated to mental health insurance claims, advocating on behalf of patients, clinicians, and treatment facilities.

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Katie Munroe
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