Managed Care Outlook 2025

Litigation trends - judicial scales icon

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Oftentimes, class action defense counsel are faced with herculean challenges, such as plaintiff-friendly jurisdictions, red herrings in the discovery record and courts’ reflexive tendency to dismiss motions to strike as a “rarity.” But hope does spring eternal. This article summarizes five notable court decisions that push back on the plaintiffs’ bar’s plethora of putative managed care class actions.

Wit v. United Behavioral Health, 79 F.4th 1068 (9th Cir. 2023).

The Ninth Circuit Court of Appeals affirmed in part and reversed in part the district court's judgment in favor of plaintiffs who alleged that United Behavioral Health improperly denied coverage for mental health and substance use disorder treatment based on internal guidelines that were inconsistent with the terms of their ERISA-governed plans and state-mandated criteria.

The court held that the district court erred in certifying the denial of benefits classes without limiting them to those whose claims were denied based on the applicable challenged portions of the guidelines. Such certification violated the Rules Enabling Act, which prohibits the use of procedural rules to enlarge or modify substantive rights. The court also held that the district court erred in interpreting the plans to require coverage for all care consistent with generally accepted standards of care (GASC), as the plans only required coverage for care that was consistent with GASC and met other conditions and exclusions.

Crosby v. California Physicians’ Service, 498 F. Supp.3d 1218 (C.D. Cal. 2020).

In Crosby, the court denied the plaintiffs' class certification motion. The plaintiffs alleged that California Physicians' Service improperly considered age and therapy history in medical necessity determinations for children with autism, which led to the denial, reduction or revision of coverage for applied behavior analysis (ABA) therapy.

The plaintiffs did not present data showing how many ABA users had their hours revised down, reduced, or denied based on medical necessity criteria, which was necessary to be part of the class. The court also highlighted procedural issues, including the plaintiffs having twice changed their proposed class definition and not describing the final proposed class in the operative complaint. The court concluded that the plaintiffs' claims were too individualized and that the involvement of ABA providers complicated the redressability of the plaintiffs' alleged harms, making class certification inappropriate.

Key takeaways
  • Comb the discovery record
  • Don’t forget typicality and adequacy issues
  • Don’t shy away from motions to strike class allegations
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