A federal appeals court on Tuesday reversed a landmark decision that required the nation’s largest behavioral health insurer to adopt more stringent standards for mental health and substance abuse treatment and reprocess tens of thousands of claims.

The 9th U.S. Circuit Court of Appeals ruled that United Behavioral Health adequately followed plan terms when it denied coverage by self-insured and fully insured employer health plans for residential and outpatient treatment from 2011 to 2017.

“We are pleased with the court’s ruling and continue to support our members with the mental healthcare services they need, when they need it, as part of our broader commitment to accessible, quality care,” a UnitedHealthcare spokesperson wrote in an email.

Individuals on the employer health plans can petition the court to rehear the case. The plans’ attorneys, Zuckerman Spaeder and Psych-Appeal, did not respond to interview requests.

The case stems from two consolidated class-action lawsuits filed in 2014 against the UnitedHealthcare arm, which alleged the insurer breached its fiduciary duty to its members under the federal Employee Retirement Income Security Act by adopting an unreasonable interpretation of plan rules. The adult and children plaintiffs alleged that United Behavioral Health had a conflict of interest, since denying claims allowed it to profit from a greater portion of members premiums.

But the Ninth Circuit said the insurer is not required to cover all treatment that adheres to generally accepted standards of care.

“Even if UBH has a conflict of interest because it serves as plan administrator and insurer for fully insured plans that are the main source of its revenue, this would not change the outcome on these facts,” the Ninth Circuit wrote.

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A lower federal court in November 2020 required UBH to reform its claims processing so that coverage decisions are based on guidelines outlined by professional medical associations, such as the American Society of Addiction Medicine. The decision set a legal precedent in defining how insurers must make patient coverage decisions, experts said at the time. U.S. District Judge Joseph C. Spero also ordered UBH to reprocess the more than 67,000 claims in question.