UnitedHealth Settles Allegations It Wrongfully Reduced Or Denied Mental Health And Substance Abuse Coverage

Lori Kalani, Bernard Nash
Cozen O'Connor
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Cozen O'Connor

  • New York AG Letitia James and the S. Department of Labor (“DoL”) reached a settlement with health insurer UnitedHealth Group Inc. and related entities (collectively “UHG”) to resolve allegations that it wrongfully reduced or denied mental health and substance abuse coverage for thousands of consumers in violation of both New York and federal behavioral-health parity laws, the New York Insurance Law, and other state statutory violations.
  • The complaint alleged that UHG’s policies impermissibly reduced coverage of outpatient psychotherapy by reducing the allowed amount by 25 percent for services provided by PhD-level psychologists and by 35 percent for masters-level therapists, relative to physicians providing the same behavioral health services. In addition, UHG allegedly employed arbitrary thresholds in its algorithms that triggered utilization reviews of psychotherapy, often leading to denials of coverage after 20 sessions.
  • Under the terms of the settlement agreement, UHG will pay $2.5 million to DoL and $1.1 million to New York for restitution to affected consumers, as well as the costs of administering the restitution claims fund and approximately $1 million in civil money penalties.
  • Under the terms of a second settlement agreement reached by UHG to resolve substantially similar allegations in a class action suit brought by private parties, UHG agreed to pay $10 million in restitution, as well as the costs of administering the restitution claims fund, approximately $1.1 million in federal and state civil money penalties, and up to $3.35 million in attorneys’ fees and costs. Under the terms of both settlements, UHG agreed to revise its utilization review processes of psychotherapy to comply with federal and state laws, among other things.

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