Medical Group Can Represent Members in Class Action, Appeals Court Says

The New York State Psychiatric Association won a significant victory in its legal battle against UnitedHealthcare after an appeals court ruled that the association has standing to represent its members and their patients in the class-action lawsuit. The suit is expected to help medical associations in similar cases.

A recent U.S. appeals court ruling could help redefine the role that medical associations take in certain legal matters involving their members.

Last month, the 2nd U.S. Circuit Court of Appeals ruled that the New York State Psychiatric Association has standing in a class-action lawsuit that the association brought against UnitedHealthcare in 2013. A lower court had dismissed the suit, holding that NYSPA didn’t have legal standing to represent its members and their patients in the case, which raises questions about whether the insurer broke a number of laws in its handling of mental health patients, including the Employee Retirement Income Security Act (ERISA) and the Mental Health Parity and Addiction Equity Act, among others.

The appeals court overturned the trial court’s ruling, noting that even if individual members take part in the class action, the association maintains standing to represent its members as a whole if certain criteria are met: if the members would have standing to sue on their own, if the interests at stake are relevant to the association’s mission, and if the claims at issue don’t require proof at an individual level.

“NYSPA alleges, and there is no serious dispute on appeal, that its members have standing to sue United in their own right, both as assignees of [ERISA] benefits and to prevent interference with their provision of mental health treatment,” the appeals court noted [PDF]. “There is also no serious dispute that this action implicates interests germane to NYSPA’s purpose. The parties dispute only whether at the motion-to-dismiss stage NYSPA has plausibly alleged that its claims do not require individualized proof. It has.”

NYSPA officials welcomed the ruling, which it called a “precedent-setting decision.”

“We are very pleased with the court’s finding that NYSPA has standing at this point in the litigation to represent the interests of our members and their patients, particularly where we believe that health plans are violating federal parity laws and interfering with access to care for the treatment of mental illness,” the association wrote in a news release.

According to the American Medical Association’s AMA Wire, the decision has the potential to affect similar pending cases, including American Psychiatric Association v. Anthem Health Plans, which involves APA’s members in Connecticut.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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