The District of Utah is home to a unique trend in litigation. Since 2019, over 450 cases have been filed against health insurers over denial of coverage for teenage residential mental health treatment centers.
Cases per month peaked in June 2021 at 15 cases per month, and since they have averaged around 8 new cases brought per month. The following article examines the nature of these cases, as well as the implications and the broader context around these teen treatment centers.
By Insurer
The most targeted health insurer is United Healthcare, often through its subsidiary United Behavioral Health. They are followed by Aetna and Cigna. Various BlueCross BlueShield entities are also frequent defendants, with the most common being Anthem BlueCross BlueShield, BlueCross BlueShield of Illinois, and BlueCross BlueShield of Texas.
Brian S. King
Far and away, the most active firm in this space is Brian S. King. He says he entered this legal niche because he saw a need; most Employee Retirement Income Security Act (ERISA) plaintiff attorneys, especially those who work on contingency, deal with disability insurance. King says he wants to help parents who are simply trying to get their children the help they need and have already spent tens of thousands of dollars to that end. According to King, the typical progression for these cases follows thus: the parents pay out-of-pocket for their child’s care, they apply for reimbursement from their health insurer, the insurer denies coverage, the parents work their way up through said insurer’s appeals process, and when that fails, they come to King.
Other Firms
Brian S. King represented plaintiffs as lead counsel in approximately 77% of these cases. The next most active firm is G. Eric Nielson & Associates, which has represented plaintiffs as lead counsel in 20% of cases, and a mélange of various firms have handled the remainder.
Win Rates
Definitions and Caveats
To examine how often these plaintiffs win their cases, all the disparate outcomes need to be simplified into the plaintiff winning a case, tying a case, or losing a case. Thus, for the purposes of the following analyses, “winning” a case is defined as when a judge awards the plaintiff benefits or remands the case to the health insurer for future proceedings. A “loss” is defined as when a judge rules against the plaintiff or when the plaintiff voluntarily dismisses their suit. Settlements out of court are considered “ties.” Ongoing cases were excluded. This analysis does not account for appeals, merely what happens in the district court.
By Firm
Controlling for filings, G. Eric Nielson & Associates is more likely to win their cases than Brian S. King; however, Brian S. King’s cases, on average, run longer than those of G. Eric Nielson & Associates, and longer running cases are more likely to result in a victory for the plaintiff. On average, G. Eric Nielson & Associates will win approximately 3% of their cases, settle 85%, and lose 12%. Brian S. King will win 4%, settle 88%, and lose 8%. There have not been enough cases brought by other firms to significantly differentiate their outcomes from those of Brian S. King.
Cases that were transferred out
Approximately 20% of all cases that start in the District of Utah were transferred elsewhere. In an analysis of whether cases filed today are more likely to be transferred out than cases filed in 2019, more recently filed cases are marginally nonsignificantly more likely to be transferred out; however, this examination likely includes cases that will be transferred out but have not yet reached that stage of litigation. To account for this, a second model was run excluding cases filed more recently than 180 days, the average time at which a case is transferred, before the date of data collection. This model found that more recently filed cases are more likely to be transferred out.
No single judicial district dominates the distribution of where these cases end up, though the plurality, eleven cases, end up in the Northern District of Illinois, where Health Care Service Corporation, the parent company for BlueCross BlueShield of Illinois, BlueCross BlueShield of Texas, and other health insurers, is headquartered.
As to the connection these cases have to their destination district, the most common is that the Defendant and/or the plaintiff are located in said district. 16% of cases involved a forum selection clause. Forty cases, 44%, had multiple connections to the destination district.
Additionally, cases that are transferred out of the District of Utah, on average, run no longer than cases that stay in Utah but do have 17 more filings.
Win Rates
These transfers might be to the health insurer’s benefit. Using similar outcome probability models as above, with the aforementioned caveats, cases that are transferred out of the District of Utah are slightly more likely to go in the defendants’ favor. For cases that remain in Utah, plaintiffs will win approximately 8% of cases, settle 91%, and lose 1%. However, for cases that are transferred to other districts, plaintiffs will win approximately 2%, settle 81%, and lose 17%. King believes that the District of Utah is more favorable to his clients because judges there have developed expertise in this specific case type. As such, King thinks, they are more likely to recognize a pattern of behavior with these health insurers and rule in favor of his clients.
Tenth Circuit Rulings
In 2023, the Tenth Circuit handed down three rulings in favor of plaintiffs in these cases. In the first, D.K. vs United Behavioral Health, the Tenth Circuit ruled against the admission of United’s internal notes as evidence unless said notes were included in the company’s denial letters. The Tenth Circuit further ruled that United failed its due diligence to D.K. and their daughter A.K. in not addressing the evidence they raised in the appeal process. Thus, Judges Carson, Lucero, and Rossman ruled that United’s denial of coverage was arbitrary and capricious, so much so that they awarded the plaintiff benefits. The Supreme Court chose not to hear United’s appeal.
Later in August, Judges Carson, Baldock, and Ebel similarly affirmed a district court ruling in favor of the plaintiff. Citing D.K. the Tenth Circuit ruled that United Healthcare had circumvented the open good-faith dialogue required by ERISA. However, they reversed the district court’s award of benefits, stating that the evidence was not clear as to whether the plaintiffs were owed said benefits under their plan.
And in December, Judges Bacharach, Phillips, and Eid once again smacked down United Healthcare for failing to engage in an open, good-faith dialogue with the plaintiff. Specific to this case, the Circuit reprimanded United for “shutting its eyes” to the plaintiff’s request for, and evidence supporting, their child’s substance use disorder as an alternate basis for coverage. Thus they overturned the district court ruling in favor of United and remanded the case to the district court for further proceedings.
The Troubled Teen Industry
Since the release of Paris Hilton’s Hell Camp, a documentary cataloging the abuse she received at a residential treatment center (RTC), residential mental health centers serving teens have fallen under increased scrutiny. Dozens of lawsuits have been filed in federal and state courts alleging various forms of abuse. Those are the subject of a future Law Street story, and these suits only represent a fraction of the allegations. Some RTCs, like Vista, have closed due to these lawsuits.
In the over 450 lawsuits examined in the above analyses, 100 different RTCs are named. Of these, the most frequently named are Elevations, Change Academy Lake of the Ozarks, Evoke Entrada, and Solacium Sunrise. Of the 100, 51 are located in Utah, but of the top nineteen most mentioned RTCs, which are named in 53% of cases, fourteen are in Utah.
Of all the named RTCs for which treatment information was available, only 47% made any claims of evidence-based practice, i.e. offering treatments developed and validated using scientific studies. Only 37% of the top nineteen RTCs claimed to offer such services.
Of all the named RTCs, 75% had allegations of abuse as collated by the subreddit r/troubledteens which draws reports from Redditors, Google reviews, and Yelp reviews, not infrequently from former staff members. Of the top nineteen, 90% had such allegations. RTCs that claimed to offer evidence-based treatment were just as likely to have allegations of abuse as those that did not.
One unique RTC with allegations of abuse is the Huntsman Mental Health Institute, part of the University of Utah Health Hospitals & Clinics. The Institute was mentioned in three different cases, and the allegations of abuse relate to the former residents claiming the Institute provided a much greater level of care than they needed. This specific claim represents a notable minority among the so-called “survivor” testimony.
Brian King’s perspective
Brian King does not deny these allegations; however, in his experience, the parents and children he works with say that these RTCs genuinely helped, particularly the ones offering “Wilderness Therapy.” By his rough estimation, 75% of his clients say the RTCs helped, and one-third say that they saved the child’s life.
King further emphasizes that issues of medical necessity should be left to medical professionals, who often refer these teens to said RTCs, and that insurers know these facilities work. He says they never deny the efficacy of the disputed treatment; they merely dispute that it was medically necessary for the child in question in each case.
That said, King welcomes increased regulatory scrutiny on these RTCs and says he is often lobbying Utah’s state government for better regulations and protections for teens staying at RTCs.