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Jenna Greene

Mar 06, 2019

Good morning! It’s March 6 and I’m Lit Daily editor Jenna Greene, here with your Daily Dicta. Reach me at or on Twitter @jgreenejenna.

Zuckerman Star Teams with Lawyer/Psychotherapist to Take Down UnitedHealthcare in SF Trial

Natasha Wit needed help.

The 17-year old was suffering from depression, anxiety, obsessive-compulsive behaviors, a severe eating disorder, precipitous weight loss, medical complications including adrenal and thyroid problems, vitamin deficiency and gastrointestinal symptoms, plus severe social isolation.

Her doctors said it was urgent that she be admitted to a residential treatment program. Her parents agreed. But their insurer, UnitedHealthcare, did not and refused to pay for the treatment.

The reason? The nation’s largest health insurer didn’t think in-patient care was medically necessary for Natasha. “It would appear that the patient could safely be treated at a less restrictive level of care,” United said—never mind whether such care would be as effective.

Wit became a named plaintiff in a 50,000-member class action brought by a formidable team: Zuckerman Spaeder health care practice head D. Brian Hufford (above, right) and Meiram Bendat (left), founder of Psych Appeal—which bills itself as the first private law firm in the nation devoted exclusively to mental health insurance claims.

Over the last five years, the duo in a series of class actions may single-handedly have done more to force insurers to comply with their mental health and substance use disorder coverage obligations than anyone else in the country.

They notched their biggest joint win yet on Tuesday. After a 10-day bench trial, a federal magistrate judge in San Francisco ruled that mental health plan administrator United Behavioral Health—represented by Crowell & Moring—breached its fiduciary duty to its insureds.

U.S. Chief Magistrate Judge Joseph Spero of the Northern District of California found that United used flawed internal guidelines to systematically deny coverage for behavioral health issues, greenlighting treatment in acute, crisis situations, but shortchanging those with chronic or complex mental health conditions that often require ongoing care.

“[T]he evidence at trial established that the emphasis on cost-cutting that was embedded in [United’s] guideline development process actually tainted the process, causing [United] to make decisions about guidelines based as much or more on its own bottom line as on the interests of the plan members, to whom it owes a fiduciary duty,” Spero wrote in a 106-page opinion.

United in a statement said, “We look forward to demonstrating in the next phase of this case how our members received appropriate care. We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders.”

Insurance coverage denials can be frustrating—or devastating—to individual policy-holders, but Bendat was uniquely able to put the pieces together to uncover the wider scheme.

In addition to a J.D., he also holds a master’s degree in clinical psychology and a PhD in psychoanalytic science. That put him in a position to call foul on United’s explanations for denying coverage. “As a clinician, I knew what was the generally accepted standard of care, and what was not,” he said in an interview.

In 2011, Bendat opened West Hollywood-based Psych Appeal, combining his early experience as a lawyer with the non-profit Children’s Law Center of California representing abused or abandoned children and his subsequent experience as a psychotherapist.

“It became very clear to me early on in my mental health career that the cards are very much stacked against the consumer,” he said. He also noticed there were no firms that specialized exclusively in mental health insurance issues.

His first big class action against United was on behalf of the New York State Psychiatric Association. His client alleged that the insurer improperly denied mental health and substance abuse treatment benefits, in violation of the Employee Retirement Income Security Act, federal and state mental health parity laws and the Affordable Care Act.

Bendat knew he’d need co-counsel and reached out to Hufford, who at the time was a partner at Pomerantz in New York. Named a “Trailblazer” in 2017 by The National Law Journal, Hufford specializes in suing insurance companies, racking up a $350 million settlement against United in 2010—the largest settlement of an ERISA benefit class action in history.

“We got along well and decided to work together,” Hufford said. “It’s been a perfect marriage.”

The New York suit was dismissed at the district court level for lack of standing, but was reversed and remanded by the U.S. Court of Appeals for the Second Circuit in 2015.

Rather than continue to litigate in New York, they sued in the Northern District of California, where United Behavorial Health is based.

As that case proceeded, Bendat and Hufford went on to sue Health Care Services Corp. (represented by Kirkland & Ellis) for denying residential treatment of mental health disorders. The class action settled in 2017, with a $5.25 million common fund for 313 patients.

In addition, the pair sued Aetna (represented by Gibson, Dunn & Crutcher) in U.S. District Court for the District of Connecticut over depression treatment coverage, winning certification for a proposed class of more than 1,100 in 2017. The judge approved a preliminary settlement for $6.2 million on Feb. 26.

A similar class against Cigna Health (represented by Morgan, Lewis & Bockius) in the Central District of California settled in 2017.

And a suit against Blue Cross Blue Shield (represented by Manatt Phelps & Phillips) settled in 2018 for $7 million plus injunctive relief.

But the United case was the first one to go to trial—and it stands to impact the biggest number of policyholders.

“This decision opens the door to sunlight, to show what’s really going on,” Hufford said. “It really is a major decision for patients.”

Bendat added, “For far too long, patients and their families have been stretched to the breaking point, both financially and emotionally, as they battle with insurers for the mental health coverage promised by their health plans. Now a court has ruled that denying coverage based on defective medical necessity criteria is illegal.”

See also Judge Finds UnitedHealthcare Coverage Guidelines Over-Emphasized Acute Problems, 'Cost-Cutting'


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