Court: Denial of Wilderness Therapy Benefits Not Compliant with ERISA

On September 12, 2024, in Amy G. v. United Healthcare, the US District Court of Utah (the court) ruled that the denial of wilderness therapy benefits by defendants United Healthcare and United Behavioral Health (UBH) was arbitrary and capricious because UBH failed to provide a sufficient explanation and analysis for the denial, as required by ERISA. The court remanded the claim back to the defendants for reevaluation and redetermination.

In this case, AG, the minor child of plaintiffs Amy and Gary G., had received treatment for mental health conditions at Second Nature Wilderness Family Therapy (Second Nature). The child’s treatment included individual and group therapy sessions led by a psychologist, as well as other activities such as hiking, drawing, painting, music, and movement. The plaintiffs sought coverage for Second Nature’s services, which totaled about $47,045, through the self-funded group health plan sponsored by Amy G.’s employer, Geico Corporation. UBH, the plan’s mental health claims administrator, paid for the therapy sessions but denied coverage for the other services based on the plan’s exclusion of “experimental or investigational or unproven services.”

After exhausting the plan’s internal appeal process, the plaintiffs filed a complaint against UBH, which included a claim for benefits under ERISA. The plaintiffs alleged that UBH failed to follow the claim procedure requirements of ERISA and the plan, offered insufficient explanations and analysis to justify the denial of benefits, and wrongly determined their son’s wilderness treatment at Second Nature was experimental.

UBH maintained that they substantially complied with ERISA and the plan’s claim procedure requirements, and their decision to deny coverage for wilderness treatment was not an abuse of discretion. In determining that wilderness therapy was experimental, UBH largely relied upon a report by its internal Clinical Technology Assessment Committee (CTAC), which had extensively reviewed published literature, statements by professional societies, and government reviews and concluded that “wilderness therapy is recommended unproven, potentially unsafe, and not medically necessary for emotional, addiction, and/or psychological problems among children and adolescents.” Both parties sought summary judgment.

In reviewing UBH’s denial of benefits, the court applied the deferential arbitrary and capricious standard of review because the plan expressly granted UBH discretionary authority to decide benefits coverage and whether treatments are unproven. Although the plaintiffs’ suit involved three arguments, the court did not find the administrative record supported the first two arguments. The court then turned to the plaintiffs’ third argument that UBH failed to provide sufficient explanation and analysis for the denial of coverage and wrongly determined that their son’s treatment at Second Nature was unproven. The court explained that if the denial is based on an experimental treatment or similar exclusion or limit, the written benefits denial notice must include, among other items, an explanation of the scientific or clinical judgment for the determination, applying the terms of the plan to the claimant’s medical circumstances. The court observed that none of UHC’s denial letters included any explanation or analysis of how or why the specific services AG received at Second Nature qualify as wilderness therapy under the CTAC report. Nor did the notices provide any citations to AG’s medical records and facts or a clinical judgment applying the plan terms to his circumstances. Rather, UBH’s denial letters contained only conclusory statements that the treatment AG received at Second Nature was wilderness therapy.

Therefore, the court concluded that UBH’s determination that the plan excluded AG’s treatment was arbitrary and capricious. However, because it was unclear whether the plaintiffs were entitled to plan benefits for the treatment, the court remanded the case back to the defendants for reevaluation and redetermination.

Wilderness therapy exclusions are a subject of much litigation, with courts reaching different decisions based on specific claims. Plan sponsors should ensure their claims administrators are exercising their discretionary authority carefully when adjudicating these (and other) claims and communicating their determinations to participants in a comprehensive manner. Benefit denial notices should be written in a way the average participant understands and specify all information required by ERISA. As illustrated by this case, denials based on plan exclusions must include a clinical explanation as to why the exclusion applies to the specific claimant’s situation.

Plan sponsors should also be aware of the upcoming teleconference meeting hosted by the ERISA Advisory Council (council), which provides advice and guidance to the DOL, to discuss recommendations regarding health and welfare plan claim and appeal procedures. The meeting follows hearings hosted by the council where panelists expressed that the appeal process is often unnecessarily challenging for participants and in need of improvements.

Amy G. v. United Healthcare