A Utah federal court of appeals found that United Behavioral Health (“United”) violated its fiduciary duties under ERISA by failing to provide a “full and fair review” of a mental health claim.
Background
Middle schooler A.K. struggled with severe mental health issues for many years, resulting in numerous suicide attempts, frequent emergency room visits, and in-patient hospitalizations. Given her history, A.K.’s physicians strongly recommended she receive long-term treatment in a residential treatment facility.
Despite these recommendations and extensive medical evidence supporting the severity of her condition, United denied coverage for A.K.’s residential treatment beyond an initial 3-month period.
The Court’s Decision
Utah’s Court of Appeals upheld the lower court’s ruling that United acted improperly and breached its fiduciary duty to provide a “full and fair review” of a claim by failing to adequately engage with A.K.’s doctors and not providing any reasoning to support its denial of benefits.
The Court rejected United’s argument that it was not required to engage with treating doctors, finding, instead, that ERISA required United to engage in a “meaningful dialogue” and cannot “shut its eyes” or refuse to credit the medical opinions of treating doctors.
The Court further held that, if benefits are denied and the claimant provides medical opinions as evidence in support of his/her claim, the insurer’s reviewer must respond to the opinions. As the Court noted, “[t]his back-and-forth is how civilized people communicate with each other regarding important matters.”
In addition, the Court found that United’s conclusory statements in its denial letter, which failed to include any citation to the medical records, did not constitute a “full and fair review.” As the Court stated, ERISA requires denial letters themselves to be comprehensive.
The Court of Appeals also upheld the lower court’s decision to order United to pay for A.K.’s residential treatment outright, rather than sending her claim back to United for another claim review.
This opinion is significant in that it provides specific guideposts to judge whether an insurer’s denial constitutes a “full and fair review” under ERISA. Further, this opinion makes clear that ERISA does not allow administrators to act improperly and then get a second “bite at the apple.”
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