New York Sues, Settles with UnitedHealth Over Failure to Cover Mental Health, Substance Abuse Care

New York State Attorney General Letitia James field and settled a suit Thursday in the Eastern District of New York on behalf of all individuals of the State of New York. The settlement, announced via press release in the hours after the suit was filed, seeks to remedy UnitedHealth’s alleged failure to adequately cover mental health and substance abuse care.

The settlement comes alongside litigation from the Department of Labor that accuses health insurance giant United Healthcare of improperly denying or reducing thousands of claims that individual members had filed for coverage of critical health services. These health services were in even higher demand in the law few years, when the opioid epidemic, suicide epidemic, and the COVID-19 pandemic took a “heavy human toll.”

The litigation asserts the importance of mental health care and explains that opioid deaths have increased 22% in recent years, all of which has been exacerbated by the COVID-19 pandemic. Mental illness and substance abuse are heavily prevalent in relation to the pandemic, and they disproportionately affect racial and ethnic minorities. Because of these circumstances, outpatient psychotherapy and counseling are described as an “integral part of behavioral health treatment for many individuals.”

Since treatment can often be expensive, many Americans turn to healthcare as a form of assistance to pay for medical bills. The complaint explained that only recently did healthcare companies begin to cover behavioral and mental health treatment, largely as a result of state-enacted parity laws which were designed to “increase health insurance coverage and to reduce the stigma preventing many people from seeking treatment for mental illness and addiction.” New York state enacted a parity law in 2006 that required health insurance companies to provide the same amount of mental health coverage as they would for a physical ailment.

Many members of the defendant’s healthcare plans allegedly did not receive the benefits they were entitled to under their plan for mental health and behavioral care. Not only did this financially damage members, but also prevented them from seeking treatment in the first place which could cause their symptoms to worsen, the plaintiff argued. They said the defendants hold an unreasonably strict program that determines what outpatient behavioral health treatment is covered when compared to their program that reviews physical treatment.

Further, the initial suits accused the defendants of imposing “arbitrary penalties on members’ reimbursement on outpatient, out-of-network psychotherapy and counseling.”

Attorney General James, jointly with the United States Department of Labor, announced that the case would be settled after they reached an agreement with United Healthcare requiring them to “pay approximately $14.3 million in restitution to consumers affected by the policies, including $9 million to more than 20,000 New Yorkers with behavioral health conditions who received denials or reductions in reimbursement.”

The defendant was represented by Kirkland & Ellis.