In a sprawling trial opinion following a bench trial, the Northern District of California Federal District Court held that United Behavioral Health’s standard of care guidelines from at least 2013 through 2017 failed to comply with guaranteed terms of insurance, various laws of several states, and overall to “set forth a unified standard that is inconsistent with generally accepted standards of care.”  Wit, et al. v. United Behavioral Health, et al., No. 14-cv-02346, 2019 WL 1033730 at *33 (N.D. Cal. Mar. 5, 2019).

A class of plaintiffs asserted that UBH breached its duties by: “1) developing guidelines for making coverage determinations that are far more restrictive than those that are generally accepted even though Plaintiffs’ health insurance plans provide for coverage of treatment that is consistent with generally accepted standards of care; and 2) prioritizing cost savings over members’ interests.”

The court seized on one of UBH’s chief witness’ testimony, the individual primarily responsible for developing and maintaining the Level of Care Guidelines for over a decade, stating in part that his testimony made “it crystal clear that the primary focus of the Guideline development process… was the implementation of a ‘utilization management’ model that keeps benefit expenses down by placing a heavy emphasis on crisis stabilization and an insufficient emphasis on the effective treatment of co-occurring and chronic conditions.”  Id. at *9.

The company’s internal processing guidelines made processing claims manifestly unfair.  Here the court found “that UBH employees apply the Guidelines as written, that is, their exercise of clinical judgment is constrained by the criteria for coverage set forth in the Guidelines, which are mandatory.”  Id. at *10.

Scrutinizing UBH’s Guidelines, the court found they failed to account for the fact that “in the area of mental health and substance use disorder treatment, there is a continuum of intensity at which services are delivered.”  Id. at *16.

The court articulated seven separate “Generally Accepted Standards of Care” which framed analysis of the challenged UBH guidelines, including:

  • Effective treatment requires treatment of the individual’s underlying condition and is not limited to alleviation of the individual’s current symptoms;
  • Effective treatment requires treatment of co-occurring behavioral health disorders and/or medical conditions in a coordinated manner which considers the interactions of the disorders and conditions;
  • Patients should receive treatment for mental health and substance use disorders at the least intensive and restrictive level of care that is safe and effective;
  • When there is ambiguity as to the appropriate level of care, the practitioner should err on the side of caution by placing the patient in a higher level of care; and
  • Effective treatment of mental health and substance use disorders includes services needed to maintain functioning or prevent deterioration.

The court held that “by a preponderance of evidence… in every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.  While the particular form this focus on acuity takes varies somewhat between the versions, in each version of the Guidelines at issue in this case the defect is pervasive and results in a significantly narrower scope of coverage than is consistent with generally accepted standards of care.”  Id. at *22 (Emphasis added).

 

Problem Number One – An Emphasis on Requiring Improvement

Each of the Guidelines displayed an overemphasis on acuity through requiring that “in order to obtain coverage upon admission, there must be a reasonable expectation that services will improve the member’s ‘presenting problems’ within a reasonable period of time.”  Id. at *23.  The court held that the ‘presenting problems’ requirement, in combination with contemporaneous evidence, “reflects that UBH knowingly and purposefully drafted its Guidelines to limit coverage to acute signs and symptoms.”  Id. at *24.

These defects were present in “all versions of the Guidelines [which] imposed the same ‘presenting problems’ requirement, regardless of whether they used the term ‘acute’ to describe it…”  Id. at *24. Requiring improvement in ‘acute’ symptoms as a sine qua non of continuing treatment fails the standards of care test.

Problem Number Two – The “Why Now” Requirement

Similarly, the UBH Guidelines required a ‘why now’ trigger for coverage, necessitating “acute changes in the member’s signs and symptoms and/or psychosocial and environmental factors leading to admission.”  Id. at *25.

UBH witness testimony attempted to style the ‘why now’ factors as aimed to “focus people more on thinking about the whole person and everything they’re bringing to the point of request for this level of care…” Id. at *25.

The court held the ‘why now’ definition in the Guidelines themselves contradicted this testimony, specifically in that the “definition makes clear that the focus of ‘why now’ is the member’s recent severe changes and that it does not encompass factors related to the member’s chronic condition that are not directly tied to those acute changes.”  Id. Thus, the definition required a recent severe change in a condition.  Further, distinct factors within the UBH Guidelines were duplicative of the ‘why now’ testimonial explanation and evidenced a post-hoc attempt to re-craft the ‘why now’ definition.  Finally, the court also concluded that the chief witness was unconvincing, in that while he stated the ‘why now’ concept was borrowed from “crisis intervention literature,” he was unable to remember any specific sources that addressed the concept, “much less supported his explanation of its meaning.”

For 2014-2016, coverage was predicated on fulfilling the requirements that there was both no less of an intensive setting for treatment to be rendered and that the reason the patient required a higher level of care was the ‘why now’ factors.  The 2015 and 2016 guidelines also incorporated a third requirement that signs, symptoms and environmental factors require the requested intensity of services.

The court held broadly that these requirements failed the standard of care test because they were overly focused on treatment of acute symptoms.  These requirements worked to deny a member coverage, even if the other criteria were met, “if the reason the patient requires the prescribed level of care and ‘cannot’ be treated in a lower level of care is anything other than ‘acute changes in the member’s signs and symptoms and/or psychosocial and environmental factors.”  Id. at *26.  The court was clear that “neither ‘acute symptoms’ nor ‘acute changes’ should be a mandatory prerequisite for coverage of outpatient, intensive outpatient or residential treatment.” The guidelines functionally required that

just as a showing of acute symptoms is necessary for admission to a level of care, the patient must continue to suffer from those acute symptoms for coverage to continue at that level of care… The discharge criteria for the Guidelines in these years further reinforce the rule that treatment services will not be covered once the immediate crisis has passed.

Even more worrisome, “[w]here coverage at a particular level of care has been denied or terminated on the ground that the member’s acute symptoms have been alleviated, services even at a lower level of care may not be covered because of the focus on acute symptoms in the admissions criteria for all levels of care.”  Id. at *27.

Altogether, the application, flawed testimony, and reality of UBH’s Guidelines, particularly in consideration of the ‘why now’ factors, led the court to conclude that “under UBH’s Guidelines patients may be denied coverage at a higher level of care because their acute symptoms have been addressed and it is safe to move them to a lower level of care even though treatment at a lower level of care may not be effective or even covered.”  Id. at *27.

The court further held the UBH “Guiding Principles,” while emphasizing a more holistic focus on the member’s overall well-being, were essentially meaningless: “while these statements of principle are consistent with generally accepted standards of care, they are not incorporated into the specific Guidelines that establish rules for making coverage determinations.”  Id. at *28.

Additionally, the UBH Guidelines failed to take into account the challenges and unique necessity in treatment required of the combined effects of co-occurring conditions:

[D]etermination of the appropriate level of care for the purposes of making coverage decisions should be based only on whether treatment of the current condition is likely to be effective at that level of care whereas treatment of co-occurring conditions need only be sufficient to ‘safely manage’ them or to ensure that their treatment does not undermine treatment of the current condition.  Conversely, the Guidelines omit any evaluation of whether… those conditions complicate or aggravate the member’s situation such that an effective treatment plan requires a more intensive level of care than might otherwise be appropriate.

Id. at *28 (Emphasis added).  The court held that UBH’s witness testimony amounted to nothing more than “post hoc rationalizations for Guidelines that transparently fail to provide for the effective treatment of co-occurring conditions.”  Id. at 29.

 

Failing to Err on the Side of Caution in Favor of Higher Levels of Care

From the viewpoint that “it is a generally accepted standard of care that patients should be placed at the least restrictive level of care that is both safe and effective,” movement to a less restrictive level of care is not justified if “it is also likely to be less effective in treating the patient’s overall condition….”  Id. at *29.  Rather than embrace these principles, UBH’s Guidelines were found to, essentially, actively seek movement of patients to the least restrictive level of care.

Newly adopted annual Guidelines featured separate, additional provisions which “push[ed] patients to lower levels of care even though services at the lower level of care may not be as effective in treating the patient’s condition.”  Id. at *30.[1]  The Guidelines read to improperly direct clinicians to place an emphasis on the safety of a diminishment in level of treatment, rather than on any resultant drop in effectiveness.[2]

Defining the Purpose of Treatment

The court also determined that, beginning in 2014, UBH’s Guidelines displayed a concentrated “drive to lower levels of care, even if they were likely to be less effective in treating a patient’s overall condition,” even in how the Guidelines defined “purpose of treatment.”  Id. at *31.

While effective treatment of mental health and substance use disorders includes treatment “aimed at preventing relapse or deterioration of the patient’s condition and maintaining the patient’s level of functioning[,]” the Guidelines departed from this through requiring both marked improvement in a patient’s condition and that the improvement occur within a “reasonable time,” evidenced through a reduction or control of acute symptoms which necessitated treatment.

While UBH modeled a portion of it’s criteria to measure improvement off of the CMS Manual (a questionable decision alone), it also “modified the language used in the CMS Manual to provide for more limited coverage of services aimed at maintaining level of function.”  Id. at *31.  While the CMS Manual focused any evaluation of improvement on a comparison of “the effect of continuing treatment versus discontinuing it… UBH made important modifications in its Guidelines that focused on acuity and precluded coverage of treatment services aimed at maintenance.”  Id. at *32.  From a meta perspective, UBH shifted the focus from maintenance of perspective to crisis stabilization – thereby depriving its insureds of the right to seek treatment which managed their conditions and allowed them to live their best life in light of those conditions.

 

The court further found that UBH Guidelines violated generally accepted standards of care in:

  • Providing that continued stay criteria was no longer met when a member was unwilling or unable to participate in treatment;
  • Failing to adopt separate level-of-care criteria tailored to the unique needs of children and adolescents, specifically in failing to take into account stages of development and the slower pace at which children and adolescents generally respond to treatment;
  • Failing to provide for coverage at the less severe end of the American Society of Addiction Medicine spectrum; and
  • Consistent with the findings discussed above, through applying a definition of “custodial care” which generally precludes the coverage of services which are aimed at maintaining function.[3]

UBH Guidelines were also held to be out of compliance with the coverage laws of multiple states.

Capping the opinion, the court analyzed UBH’s Guideline Development process, focusing on the “why” and the executive decision-making process behind UBH’s implementation of insufficient coverage criteria.  Among other markers of financial incentives carrying an outweighed impact on the formation process behind the Guidelines, the court noted UBH’s detailed utilization data relating to average length of stay and related monthly targets, UBH’s decision in late 2016 not to amend its Guidelines with respect to Applied Behavioral Analysis, including its CEO’s statement that “[w]e need to be more mindful of the business implications of guideline change recommendations” and UBH’s decision-makers’ repeated refusal to adopt its own clinicians recommendations to integrate the ASAM criteria into its Guidelines.

While the scope of inadequacies in UBH’s coverage guidelines, spanning a period of at least five years, is staggering, perhaps even more sobering is the possibility that the flaws identified by the court are industry standard contractual cost-control mechanisms – private insured nationwide may be routinely denied adequate, necessary treatment on the basis of an overemphasis on evidencing acute improvement and an under emphasis of the treatment and maintenance of underlying conditions.

[1] E.g., the requirement that a member demonstrate “a significant likelihood of deterioration in functioning/relapse if transitioned to a less intensive level of care” for continued coverage essentially requires that coverage be discontinued unless movement to a lower level of care is unsafe, regardless of the effectiveness of treatment at a lower level of coverage.

[2] One of the noted points of agreement between the parties’ experts was that one of the year’s Guideline’s requirement that “clear and compelling” evidence be provided was an “impossible metric.”  Id. at *30.

[3] Under UBH’s Guidelines, “only those services that are expected to reduce or control acute symptoms count as ‘active treatment’ sufficient to avoid a finding that the services are custodial (and consequently excluded from coverage).”