In 2012, college professor Michael Kamins faced one of a parent’s worst nightmares.
The psychiatrist treating his son for bipolar disorder believed the young man needed two psychotherapy sessions per week to treat the anxiety, psychosis, mania and depression that came with his mental illness. But after paying for several weeks of therapy, Kamins’ insurance company, Minnetonka-based UnitedHealth Group Inc., decided it would cover only two sessions per month, according to a recent lawsuit.
The prospect of watching his son stop progressing against a disease that had led to suicide attempts because an insurance company wanted to second-guess a physician angered Kamins.
So he joined a nationwide class-action case that charges UnitedHealth with violating a federal law named for the late U.S. Sen. Paul Wellstone of Minnesota. That law forbids insurance companies from treating mental health claims differently from medical and surgical claims.
Experts say the suit, brought by Kamins, two other individuals and the New York State Psychiatric Association, could set a major precedent for mental health coverage in the era of health care reform. “It has a pretty broad sweep,” said Ira Burnim, legal director of the Bazelon Center for Mental Health Law in Washington. “It’s a big deal.”
UnitedHealth Group declined to discuss the suit, which was filed in New York on March 11. “We are committed to helping people with mental health issues reach long-term recovery,” the company said in a statement. “We have received the complaint and are currently reviewing it.”
So-called “mental health parity” suits have been filed before, explained Sara Rosenbaum, a professor of health law and policy at George Washington University. But they are usually individual claims based on state laws.
The suit against UnitedHealth asks for legal relief under a parity law in New York, but it relies heavily on the federal parity law, as well as the federal Affordable Care Act. “There has been nothing like it on the class-action level before,” Rosenbaum said.
She predicted that the case against UnitedHealth will “rise and fall” based on the 2008 Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act.
The law, which applies to employers with 50 or more workers, doesn’t force employers to offer mental health or substance abuse coverage in their employee insurance programs. But if they choose to offer those benefits, they must treat them the same way they treat medical and surgical benefits when it comes to out-of-pocket costs, benefit limits, pre-approval for treatment and reviews of claims.
UnitedHealth violated those rules, according to a 102-page legal filing by Kamins, the New York State Psychiatric Association, CBS Sports Network marketing director Jonathan Denbo, and Brad Smith, the father of a mentally ill teenager.
Chief among their accusations is that UnitedHealth required pre-approvals of talk therapy treatments for mental illness that were far more restrictive than for medical and surgical treatments or even drug therapy for mental health issues.
The suit also accused UnitedHealth of refusing to pay for the extended hospitalization of the mentally ill teen because he had not gone through enough outpatient therapy. The teen, the suit claims, lives on a small island off Washington state where outpatient therapy is unavailable for hundreds of miles.
Experts believe these and other points of law in the suit are particularly important in light of the 2010 passage of the Affordable Care Act. The new health law established mental health coverage and addiction treatment as an essential benefit for all health insurance policies offered by national health care exchanges and by some small-employer and individual plans.
“Over 40 percent of Minnesotans are on a self-insured plan,” said Sue Abderholden, director of the National Alliance on Mental Illness’ Minnesota chapter. “So this law is very important.”
U.S. Sen. Al Franken, D-Minn., has taken up Wellstone’s crusade to end double standards in the treatment of mental illness. “It’s important that health insurers are following our parity laws and providing the mental health care people are entitled to,” Franken said. “This lawsuit will run its course, and I hope it will give clarification to how our insurers can comply with our parity laws.”
Even with implementation of the Wellstone-Domenici act, large group insurance plans may still choose not to offer mental health benefits rather than meet parity requirements, said Holly Merbaum, a spokeswoman for the Parity Implementation Coalition, but most have not done so.
Rules for applying the parity law languished in regulatory limbo for two years after its passage. Even today the rules are labeled “interim final rules,” which some experts say could undermine the law’s enforcement. The suit against UnitedHealth marks the first significant test of those rules, experts agree.
“Often a big first case affects perception and then action,” said the Bazelon Center’s Burnim. “If the plaintiffs win, alarms will go off in the insurance industry.”
Burnim warned that parity cases could discourage employers from offering mental health and substance abuse benefits or make them change rules for medical and surgical treatments.
“There are two ways to achieve parity,” he said. “You can make mental health benefits more generous or you can make physical health benefits more restrictive.”