United Health Group $15.6 Million Settlement on Alleged Mental Health Parity Violations

The Department of Labor’s Employee Benefits Security Administration (EBSA) enforces the Mental Health Parity and Addiction Equity Act (MHPAEA) with a team of 350 investigators for plans subject to the Employee Retirement Income Security Act of 1974 (ERISA).  The lawsuit and investigation alleged that Optum Behavioral Health and United Healthcare Insurance Company did not comply with MHPAEA rules going back to at least 2013.  On Thursday, August 12, 2021, the EBSA announced a settlement whereby the United companies do not admit fault, guilt, or wrongdoing, but agree to pay $13.6 million to affected participants and beneficiaries, pay just over $2 million in penalties, and implement corrective actions.

MHPAEA enforcement began ramping up under the 21st Century Cures Act signed by President Obama, and this has been reinforced by the Consolidated Appropriations Act of 2021 signed by President Trump.  At a press briefing Thursday, Ali Khawar, acting assistant secretary for the EBSA, said, “The secretary of labor views this as probably our top health enforcement priority for EBSA.  You should expect to see more investigations.  We have taken a look at our existing inventory of cases and have sent out a number of letters asking for plans and issuers to provide their non-quantitative treatment limitation analyses, and that work is ongoing right now.  There are other investigations that are open, and I predict it will be a very active issue for us for years to come.”

A self-compliance tool was created to help plan sponsors evaluate their plan to ensure parity.  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.”  According to the complaint, United cut baseline reimbursement rates 25% for psychologists with doctorates and 35% for therapists with masters degrees while non-physician medical and surgical providers saw these types of baseline rate cuts only in “limited circumstances.”  The complaint also alleged United used a special Algorithms for Effective Reporting and Treatment (ALERT) concurrent review program only on behavioral health care, leading to many denials due to medical necessity, which was alleged to be “broader and more aggressive” than similar programs for medical and surgical care.

The EBSA said: “Many participants and beneficiaries did not receive the mental health and substance use benefits to which they were entitled under their ERISA-covered health plans due to United’s violations. Investigators also found United failed to disclose sufficient information about these practices to plans and their participants and beneficiaries. In the settlement, United agrees to cease the violations, improve its disclosures to plan participants and commit to future compliance.”

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.