A panel of the U.S. Court of Appeals for the 9th Circuit has reversed a pair of major rulings by a California federal district court. Those rulings would have required UnitedHealth Group Inc. to reprocess thousands of mental health and substance abuse claims, due to its application of improper coverage guidelines. The 9th Circuit disagreed, finding that the insurance company’s claim denials were reasonable under its interpretation of the plans’ language.

UnitedHealth insurance plan participants and beneficiaries filed suit in 2014 over denied claims for hospitalization, outpatient, and residential mental health and substance treatment. The court later consolidated the suits and certified them as a class action in 2016. Following a trial in 2017, the federal district court ruled that the insurer’s coverage guidelines overly focused on crisis care and stabilization, which did not treat patients adequately over the long term. A year later, the court entered a remedies order which, in part, called for the reprocessing of some 67,000 insurance claims rejected between 2011 and 2017.

UnitedHealth appealed the district court’s ruling to the 9th Circuit in December 2020. Although all three judges on the 9th Circuit agreed that the plaintiffs had standing to sue, despite UnitedHealth’s claims otherwise, they also held that the district court’s ruling was incorrect. They ruled that the district court’s finding that the insurer had abandoned its fiduciary duties under ERISA was wrong.

The 9th Circuit panel further stated that UnitedHealth did not abuse its discretion in interpreting the health plans’ language. The insurer had determined that the plans did not require consistency with generally accepted standards of care, which the plaintiffs argued was required as a part of the insurer’s fiduciary duty.

This opinion shows the broad authority that plan administrators have to interpret ERISA plan provisions. The 9th Circuit ruling states that the administrator’s reasonable interpretation of plan language carries greater weight than what a court may see as a more reasonable or better interpretation of the plan.

The cases at issue are Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health, case numbers 20-17363, 20-17364, 21-15193, and 21-15194, U.S. Court of Appeals for the Ninth Circuit.