But ERISA offers some hope for cancer patients. Once the claims and appeals processes are exhausted, a civil lawsuit can be filed in federal court. Under ERISA, a claimant whose claim is denied must “exhaust” internal review procedures before he or she can file a suit for ERISA benefits. Since ERISA is a federal statutory scheme, suits must be filed in a federal jurisdiction where the relevant health “plan is administered, where the breach took place or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). Federal court litigation often moves towards resolution faster than litigation in state courts. And successful beneficiaries are entitled to recover reasonable attorneys’ fees.

ERISA class action litigation in recent years has set its sights on challenging the key ingredient of health insurers’ systematic and widespread denial of health benefits—profit-driven, internally-developed clinical coverage guidelines. Recent federal ERISA litigation has brought internal insurance company guidelines under scrutiny. On March 5, 2019, U.S. Magistrate Judge Joseph C. Spero issued a 100-page decision criticizing UnitedHealthcare’s use of narrow and restrictive internal clinical guidelines for mental health and substance abuse coverage. Judge Spero ruled that UnitedHealthcare’s guidelines were “defective” and “riddled with requirements that provided for narrower coverage than is consistent with generally accepted standards of care giv[ing] rise to a strong inference that [UnitedHealthcare’s] financial interests interfered with the Guideline development process.” Wit v. United Behavioral Health, 2019 WL 1033730, at *48 (N.D. Cal. 2019). Magistrate Judge Spero wrote that the insurer did not take into account what beneficiaries actually need, general standards of care and treating underlying conditions. The opinion repeatedly calls the policies “unreasonable.”


Just one month later, on April 16, 2019, UnitedHealthcare agreed to settle an ERISA class action brought by patients denied coverage for lumbar artificial disc replacement surgery on the grounds that L-ADR was considered “investigational” by UnitedHealthcare’s clinical guidelines. According to the patients’ motion for preliminary settlement approval in Hill v. UnitedHealthcare Ins. Co., No. 2018 WL 6112660, at *1 (C.D. Cal. 2018), UnitedHealthcare agreed to reverse its position and find that L-ADR can be medically necessary. This settlement, if approved, will require UnitedHealthcare to adhere to a new coverage policy for L-ADR, and reprocess patients claims under UnitedHealthcare’s revised coverage guidelines.

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