Advocacy Alert: Spencer Recovery Parity Act Claims

January 17, 2019

California and Florida Treatment Facilities Claim Parity Act Violations Against United Behavioral Health and Optum

Another shot has been fired across the bow against United Behavioral Health and Optum. Spencer Recovery Centers Florida, Inc. and Coast to Coast Referral Center, Inc. have filed a complaint in the Superior Court of the State of California, County of Orange, claiming that the insurance giants have since September 2016 enlisted a "systematic practice of authorizing out-of-network addiction treatment providers to treat United's insureds, only to renege on those authorizations when it comes time to pay." According to the Complaint, when out-of-network providers complain about the denials of payment, United/Optum intentionally "offer excuse after excuse for not paying, requiring additional paperwork, imposing new conditions, and generally 'moving the goal posts' to prevent any kind of final resolution."

Indeed, the complaint assert that United and Optum instituted "a pattern of unjustified denials, underpayments, and claim processing 'roadblocks' that Plaintiffs are informed and believe were implemented as part of an overall scheme to withhold payment or underpay Plaintiffs for their services." For example, "whereas, before, payments would typically be made within 30-45 days, Defendants started taking much longer, on average 90 to 120 days to pay claims. These delays became even longer and more common, and Defendants ultimately started withholding payment indefinitely by diverting Plaintiffs' bills into a veritable claims-processing 'black hole.'" The complaint alleges that, "by strong-arming the out-of-network providers, United makes it all but impossible for those providers to continue treating United insureds – effectively limiting the United insureds' freedom to choose their own providers and pushing them to stay in-network for lower cost treatment."

The Complaint provides numerous illustrations of United/Optum's alleged claims-processing "roadblocks" resulting from their intentional or negligent mishandling of claims; for example, the complaint alleges that United/Optum routinely, and falsely, asserted that:

  • "claims were lost and could not be found"
  • "patient medical records were not provided with the claims"
  • "claim submissions were rejected because they should have been sent along with immaterial 'cover letters'"
  • "claims contained missing/incomplete/invalid procedure codes"
  • "claims were filed untimely"
  • "medical and other records submitted with the claims did not support the services actually billed"
  • "claims were still 'in process'"

The complaint further alleges (i) that other claims were "grossly underpaid" based on false assertions that "third parties [such as Viant] had 'negotiated' discounts on claims with Plaintiffs when, in fact, no such discounts had been agreed to by Plaintiffs," and (ii) that United/Optum made "untimely and improper 'overpayment' requests" in an "attempt to harass and retaliate against Plaintiffs. Finally, the complaint alleges that United/Optum instituted a "bogus 'audit'" that "reached the unsupported and false determination that" culminated in an indefinite "suspension" of all future treatment authorizations.

The complaint alleges that the conduct of United/Optum was not limited to these two specific providers and instead intentionally targets behavioral health providers as a whole, in violation of the Federal Mental Health Parity Act and Mental Health Parity and Addiction Equity Act, as well as the California Mental Health Parity Act, among other federal and state violations. A copy of the complaint can be found here.

Have you experienced similar misconduct by United Behavioral Health and/or Optum? If so, we'd love to hear from you!

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