Lawsuit: United HealthCare Unlawfully Applies Penalty to Mental Health Insurance Coverage

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United Healthcare Insurance Co. and United Behavioral Health have been accused in a proposed class action of unlawfully applying reimbursement penalties to insurance claims related to mental health treatment provided by out-of-network psychologists and master’s level counselors.

According to the lawsuit, the defendants serve as claims administrators for health insurance plans “that cover more than one in five Americans.” Under the defendants’ health insurance policies, the case explains, the amount of coverage provided for out-of-network services is determined by each service’s “Eligible Expenses.” After defining “Eligible Expenses,” the defendants’ Certificate of Coverage allegedly states:

“For Mental Health Services and Substance Use Disorder Services the Eligible Expense will be reduced by 25% for Covered Health Services provided by a psychologist and by 35% for Covered Health Services provided by a masters level counselor.”

The lawsuit points out that these penalties are not applied to medical/surgical benefits, alleging they discriminate against those seeking coverage for mental health treatment.

“By engaging in this type of discrimination against Plaintiff, based on nothing other than the fact that she sought mental healthcare from the type of clinician likely to be most available and qualified to provide it, United violated its legal duty (both as a fiduciary and otherwise) to comply with the Parity Act and Section 2706 of the [Affordable Care Act],” the complaint reads.