Ninth Circuit Explains Legal Meaning of Mental Health “Parity”

Under the Mental Health Parity and Addiction Equity Act enacted in 2008, there must be “parity” between the benefits a group health plan provides for mental health and substance use disorder treatment and the benefits it provides for other medical and surgical treatment.  But what “parity” means, and how a plan beneficiary can allege a violation of the Act, has been an open question.

The Ninth Circuit Court of Appeals answered this question in April 2024 at least as to whether a claimant could proceed with his case.  In Ryan S. v. UnitedHealth Group, Inc., 98 F.4th 965, 969 (9th Cir. 2024), the court explained that a plan can violate the Act in different ways.  The plan could outright exclude a kind of treatment for mental health/substance use disorder yet offer the same treatment for medical/surgical issues.  It could also apply a plan term in an unequal way between the different kinds of benefits.  Or, it could use a more stringent process to review mental health/substance use disorder claims than other claims.

In the Ryan S. v. UnitedHealth Group, Inc. case, the beneficiary went the third route, alleging his plan handled out-of-network mental health/substance use disorder claims more stringently than out-of-network medical/surgical claims.  He was therefore required to demonstrate that the plan processed his mental health/substance use disorder claim differently from analogous medical/surgical claims (which could be defined broadly).  The Ninth Circuit found the beneficiary sufficiently alleged a violation of the parity requirement because the plan apparently used a special algorithm to review mental health/substance use disorder claims but not other claims.

The court also explained what the beneficiary did not have to allege: he did not need to specify how the analogous claims were processed—after all, he might not know that process if he had only submitted mental health/substance use disorder claims.  And he did not need to allege that the plan categorically treated mental health/substance use disorder claims differently, or that it always denied those claims.

The Ryan S. v. UnitedHealth Group, Inc. case shows some of the issues influencing how group health plans should review mental health/substance use disorder claims in parity with other claims.  For more information, contact your plan counsel.