• Filing. Filed in U.S. District Court for the District of Utah on February 7, 2020 (Case no. 2:19-cv-00225-JNP-PMW).
  • Backgroun Plaintiff’s daughter is dealing with a myriad of MH/SUD issues including self-harming behavior.  She attended two residential treatment facilities during 2016/2017.  Defendants are self-funded employers, the plan administrator, and United Healthcare, the claims administrator. Plaintiff experienced two sets of denials and appeals for each residential stay.  The denials of care were upheld both at the internal and external appeal levels.  Reasons for the denials ranged from the care was not preauthorized, not medically necessary, missing an appeal deadline, and other reasons.  Plaintiff disagrees with the denials and filed suit alleging:  1) breach of fiduciary duty under ERISA; 2) a Parity Act violation; and 3) failure to disclose plan documents under ERISA.

Plaintiff asked for the plan documents and clinical guidelines used at least six times without any meaningful disclosures.  Plaintiff also notes that the Defendants failed to account for daughter’ dual diagnosis.  The treating providers noted in writing, which was submitted as part of the appeal record, that the “lower level of ‘outpatient therapy and psychopharmacological treatment’ insufficient…”

Defendants move to dismiss the three claims pursuant to a 12(b)(6) motion.  Defendants support their motion to dismiss on four issues:

  • Standing: Plaintiff lacks statutory and constitutional standing to bring his individual claims.
  • Pending Class Action: Plaintiff’s daughter (L.P.) is a member of a pending class action (Wit v United) that Defendants believe is premised on the same grounds as this lawsuit.
  • Parity Claim: The Parity Act claims is inadequately pled and should be dismissed with prejudice.
  • Plan Document Disclosure: The claim for statutory penalties should be dismissed with prejudice because Plaintiffs’ requests for documents were directed to the wrongentity or are time-barred.
  • Holding. The Court rejected Defendants’ first, second, and third arguments, but accepts its fourth argument concerning statutory penalties:
    • Standing – Yes. Plaintiff was a plan participant and has standing to bring a civil action to enforce his rights under ERISA.
    • Pending Class Action – Not Applicable. After several pages of legal analysis, the Court ruled the claims and issues presented in this case and the Wit case do not substantially overlap.  Among other factors, the judge notes “In Wit, the denial of benefits claims is based on the theory that UBH improperly adjudicated and denied (the class plaintiffs’) requests for coverage by using its overly restrictive Guidelines to make coverage determinations…. (B)y contrast Plaintiffs at this point have not challenged the facial validity of the medical necessity criteria that United used in this case.  Rather, Plaintiffs argue that the way in which United applied its purportedly valid medical necessity criteria violates ERISA because the United claims administrators wrongfully applied more strict criteria than the Plan provides, violated their fiduciary duty under ERISA.”  The Court also notes this case does assert a Parity Claim and Wit does not.
    • Parity Claim Allowed. Plaintiffs have adequately pled their Parity Act claims because (1) Plaintiffs identified a specific nonquantitative treatment limitation in United’s application of acute-level criteria to a benefits claim for subacute mental health/substance abuse care at residential treatment centers; (2) Plaintiffs appropriately (based on Parity Act regulations) analogize to medical/surgical care at skilled nursing, inpatient hospice, or inpatient rehabilitation facilities that are covered by the Plan; and (3) Plaintiffs plausibly allege a treatment limitation disparity that Defendants applied acute-level criteria to subacute mental health/substance abuse services, but would have applied subacute level criteria to the analogous subacute medical/surgical services.
    • Plan Disclosure Claim — Dismissed. Plaintiffs directed their document requests to United, the claims administrator, and not to the employer, the plan administrator.  Therefore, this request did not trigger the ERISA disclosure requirements and does not warrant statutory penalties.