UnitedHealth Beats Substance Abuse Suit After 9th Cir. Revival

UnitedHealth Group Inc. convinced a California federal judge to dismiss a patient’s challenge to its coverage of substance abuse and mental health treatments, four months after the Ninth Circuit said portions of his proposed class action could proceed.

The plaintiff, a patient referred to as Ryan S., makes allegations that are “entirely conclusory and insufficiently detailed,” Judge James V. Selna of the US District Court for the Central District of California said Thursday.

Selna dismissed Ryan S.'s claims under both the Employee Retirement Income Security Act and the federal Mental Health Parity and Addiction Equity Act, which requires health insurers to cover mental health and substance abuse treatments on the same terms that they cover medical and surgical treatments.

Ryan S. accused United of a number of impermissible practices related to its coverage of treatments for substance abuse disorders, including imposing invalid preauthorization requirements, refusing to cover outpatient services and counseling, and underpaying approved claims.

Selna rejected each of these allegations for lack of standing in 2020, but the US Court of Appeals for the Ninth Circuit revived the case in March, concluding that Ryan S. had standing to press at least some of his claims.

On remand, Selna determined that “two key flaws” in Ryan S.'s complaint nevertheless tanked the case.

For one, claims that United engages in illegal practices across the board are “entirely conclusory,” Selna said.

“Other than the fact that some of his claims were denied, there are no factual allegations to support the allegation that this was part of a larger practice on the part of the Defendants,” he said.

Secondly, Ryan S. didn’t provide sufficient details to support the idea that United impermissibly covered medical and surgical care more generously than it covered mental health care, Selna said.

Merely stating that “Defendants handle claims on the medical side differently is not sufficient under any of the prevailing pleading standards for a Parity Act claim,” Selna said, adding that Ryan S.'s complaint “provides no comparator for the practices of outpatient treatment and laboratory services.”

Ryan S. is represented by Kantor & Kantor LLP and Callahan & Blaine. United is represented by Crowell & Moring LLP.

The case is Ryan S. v. UnitedHealth Grp., Inc., C.D. Cal., No. 8:19-cv-01363, 7/14/22.