UnitedHealthcare & UBH Sued over Denial of Certain Services Through Bundling Process

A class-action complaint was filed in the Northern District of California on Thursday against United Behavioral Health (UBH) and its parent company UnitedHealthcare for alleged breach of fiduciary duty in regards to the processing of ERISA controlled employer health plan claims.

ERISA requires that health plan administrators, such as UBH process all medical claims according to the standards imposed by the plan documents under a role of fiduciary duty. The plaintiffs accuse UBH of having the main plan documents and internal written policies that are deliberately designed to reduce the number and value of claims that UBH approves and pays to the detriment of the plan members and against their fiduciary obligation. According to the complaint, this includes plan documents which state the level of care for coverage be that services are consistent with generally accepted standards, but UHB’s internal policies require a higher level of proof than the generally accepted standards.

The plaintiffs also assert that UBH denied certain services outright due to billing standards required for the facility. The plaintiffs specifically state that when processing inpatient residential levels of treatment, UBH processes the bills under a bundled process, whereby if one of the services was determined to be medically unnecessary all services were denied. This purportedly resulted in services that are specifically covered under the plan documents being denied, thus the plaintiffs remained financially liable for costs specifically covered by their health plans.

The plaintiffs are suing for recovery of benefits, injunctive relief to prohibit further over restrictive denials of benefits, and injunctive relief regarding the bundling of charges. Plaintiffs are represented by Zuckerman Spaeder LLP.