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Less is More: Brevity is the Soul of Wit

Last month, a three-judge panel in the Ninth Circuit reversed the Northern District of California’s ruling in Wit v. United Behavioral Health. In Wit, the district court ruled that United Behavioral Health (“UBH”) breached its fiduciary duties under ERISA to insureds by denying their mental health and substance use disorder claims as a result of allegedly pervasively flawed medical necessity criteria that the court concluded are not consistent with generally accepted standards of care (“GASC”). The district court ordered UBH to reprocess over 60,000 claims.

On appeal, however, the Ninth Circuit explained that the district court misapplied the standard of review—whether the plan administrator’s (UBH) decisions constitute an abuse of discretion—by substituting the court’s own interpretation of the plans for UBH’s. The Ninth Circuit noted that the plans “exclude coverage for treatment inconsistent with GASC” but do not require coverage of treatments that are consistent with GASC. As a result, “UBH’s interpretation—that the Plans do not require consistency with the GASC—was not unreasonable.”

The plaintiffs also argued that less deference should be afforded to UBH, alleging that UBH had a conflict of interest acting as both a plan administrator and insurer for fully-insured plans. The Ninth Circuit found that even if that were true, it would not change the outcome of its decision based on the facts of this case.

The Ninth Circuit’s breezy eleven-page opinion (including cover page and concurrence) overturned a massive lower court ruling—both in impact on behavioral health law and volume (for reference, the district court had issued two 100+ page opinions in exhaustive detail). The Wit litigation influenced behavioral health care nationwide inspiring similar litigation, spurring additional state regulatory actions, and even legislation. For example, California’s expanded parity law SB-855 relies on the district court ruling in Wit for much of its language and reasoning.

It is unclear how much the Ninth Circuit’s ruling will affect Wit’s influence. It may serve as the rallying cry for additional action or signal a shift in how courts and regulators should evaluate coverage guidelines. What is clear, however, is behavioral health care remains a major focal point at both the federal and state levels.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 104

About this Author

Xavier Baker Healthcare Attorney Sheppard Mullin Washington, DC

Xavier Baker is a partner in the Corporate Practice Group in the Washington, D.C. office and member of the firm's Healthcare team.

Areas of Practice

Xavier advises clients on healthcare insurance and managed care regulations, investigations, transactions, and litigation. He counsels national and regional health insurers, pharmacy benefit managers, care coordination organizations, and other specialty healthcare service providers and trade associations on complex state and federal regulatory issues...

Jarrod Brodsky Corporate Lawyer Sheppard Mullin Law Firm

Jarrod Brodsky is an associate in the Corporate Practice Group in Sheppard Mullin's Washington, D.C. office.


J.D., Georgetown University Law Center, 2020

B.A., New York University, 2014, magna cum laude


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