UnitedHealthcare’s Claim Denial Is Invalid Without Remand Order

United Healthcare Insurance Co.'s second decision declining to cover a teenager’s $175,000 mental health and substance abuse treatments had no legal effect because the matter was never properly remanded to the insurer, a Utah federal judge said.

The order by Judge Jill N. Parrish considered an “odd question” posed by the five-year-old lawsuit’s various twists and turns: what effect does United’s most recent claim denial have absent a remand order from her court? Parrish concluded the insurer’s decision had “no legal effect” because neither she nor the US Court of Appeals for the Tenth Circuit directly remanded the dispute to United.

The lawsuit was filed in 2019 by a participant in Morgan Stanley’s health plan who sought coverage for his daughter’s year-long stay at two Utah residential treatment centers. Parrish sided with the family in 2021 and ordered United to pay more than $175,000.

On appeal, the Tenth Circuit agreed that United had mishandled the claim but disagreed with Parrish’s decision to award benefits, saying the matter should instead be sent back to the insurer for reconsideration. After that ruling, United again told the family that the teenager’s care wasn’t covered.

Parrish’s latest order, entered Thursday in the US District Court for the District of Utah, set aside the insurer’s decision because it skipped a crucial procedural step: a remand order from her court. The Tenth Circuit opinion didn’t, on its own, officially start the redetermination process, she said.

“Although remand orders from the district court in a case like this may seem ministerial and without much practical effect, they actually serve important functions in the efficient and orderly resolution of a plaintiff’s benefits claim,” she said.

In particular, remand orders in Employee Retirement Income Security Act cases often “explain the specific issues to be considered” and “provide the court a yardstick against which to evaluate the insurer’s redeterminations if the plaintiffs move for judicial review again,” she said.

Parrish instructed United to reconsider the claim one more time and specified that the insurer can’t use certain rationales that have already been rejected. She also set an explicit timeline for the parties to follow while they complete the process.

Brian S. King PC represents the family. Crowell & Moring LLP and Fabian VanCott represent the defendants.

The case is David P. v. United Healthcare Ins., 2024 BL 443521, D. Utah, No. 2:19-cv-00225, 12/5/24.