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Ninth Circuit Rejects "Reprocessing" of Health Claims as ERISA Remedy

Employee Benefits Alert

In a closely watched case, Wit v. United Behavioral Health, Nos. 20-17363, 21-15193 (Jan. 26, 2023, 9th Cir.), the Court of Appeals for the Ninth Circuit last week reversed a lower court ruling that allowed plaintiffs to seek "reprocessing" of previously denied health claims as an equitable remedy under ERISA. This decision has broad implications for both putative class actions and Department of Labor (DOL) ERISA litigation seeking to remedy health plan benefit denials through re-adjudication of claims across one or more plans or throughout an issuer's entire book of business.

In Wit, plan participants/plaintiffs sought as a remedy the reprocessing of their denied benefit claims for outpatient, intensive outpatient and residential mental health and substance use disorder treatment. Plaintiffs brought their claims alleging both breach of fiduciary duty and improper denial of benefits on a theory that, as claims administrator, United Behavioral Health (UBH) improperly developed and relied on internal guidelines that were inconsistent with the terms of the plaintiffs' health plans and state-mandated criteria.1 The litigation and appeal involved as many as 3,000 different plans, many of which were fully insured plan in which UBH served as both plan administrator and insurer. While the Ninth Circuit affirmed the district court in finding that the plaintiffs had standing to bring their claims, it concluded that class certification was improper as to the benefits claim. Further it disagreed that UBH breached its fiduciary duty and improperly denied benefits, reversing the district court's order that UBH must reprocess over 65,000 benefit claims. 

In analyzing the plaintiffs' fiduciary breach claim, the Court stated that plaintiffs could "seek 'appropriate equitable relief,' which refers to 'those categories of relief that, traditionally speaking (i.e., prior to the merger of law and equity) were typically available in equity.'"2 The Court found, however, that the plaintiffs and the district court "did not explain or refer to precedent showing how a 'reprocessing' remedy constitutes relief that was typically available in equity." Consequently, the Court held that the district court erred in concluding that "reprocessing" was an available form of "appropriate equitable relief" under ERISA. 

The Court also rejected the class plaintiffs' "reprocessing" remedy for their denial of benefits claim, stating that "reprocessing is not truly the remedy that Plaintiffs seek, it is the means to the remedy that they seek." As explained by the appellate court, ERISA permits participants to seek to recover benefits or to enforce or clarify their rights under the plan – but ERISA does not authorize participants to seek the "means" to seek that relief as a remedy itself. The Court held that the district court abused its discretion in accepting "the erroneous legal view that reprocessing is itself a remedy under § 1132(a)(1)(B) independent from the express statutory remedies that Congress created, justifying class treatment." Acknowledging that the plaintiffs framed the remedy to avoid individualized questions regarding entitlement to benefits that could jeopardize class certification, the Court concluded that plaintiffs could not use Federal Rule of Civil Procedure 23 as "a vehicle for enlarging or modifying their substantive rights where ERISA does not provide reprocessing as a standalone remedy."

On the merits, the Ninth Circuit reversed the district court's findings that UBH breached its fiduciary duty and wrongfully denied benefits when it developed and applied benefits coverage guidelines that did not comport with generally accepted standards of care (GASC). Even though UBH acted under a structural conflict of interest as both the claims administrator and plan insurer, the appellate court concluded that the plan documents granted UBH discretion to interpret plan terms, UBH did not abuse its discretion, and that its interpretation did not conflict with plan language. Finally, the Ninth Circuit held that, where the plan requires exhaustion of administrative procedures before a benefits claim may be asserted in court, potential class members who fail to exhaust their administrative remedies must be excluded from the class.

Although binding only on federal courts located in the Ninth Circuit, the ruling on the unavailability of "reprocessing" or re-adjudication of claims as an equitable remedy is likely to be noticed and cited broadly. The Court's acknowledgment of UBH's discretion to interpret plan terms in light of its recognized conflict of interest is also notable. The Ninth Circuit's analyses and conclusions could well have an impact on similar class action lawsuits alleging fiduciary breach and denial of benefits claims related to ERISA health plans, as well as affect federal administrative investigations and lawsuits where corrective action in the form of widespread re-adjudication and payment of claims at the service provider or issuer level is often requested.

For more information, please contact:

Joanne Roskey,, 202-626-5847

Dawn E. Murphy-Johnson,, 202-626-6050


1 Plaintiffs asserted claims under ERISA sections 502(a)(1)(B) and 502(a)(3), 29 U.S.C. §1132(a)(1)(B) and (3). ERISA section 502(a)(1)(B) allows a participant or beneficiary to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." Section 502(a)(3) allows a participant or beneficiary to seek in court, among other things, "appropriate equitable relief" to redress acts or practices that violate ERISA or ERISA plan terms.

2 Slip Op. at 25-26 quoting Castillo v. Metro. Life Ins. Co., 970 F.3d 1224, 1229 (quoting CIGNA Corp. v. Amara, 563 U.S. 421, 439 (2011)).

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