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It’s well established that the state Public Utilities Commission has a major-league bias favoring the huge corporations it regulates over consumers they serve.

Gov. Gavin Newsom’s leaning is also clear from his refusal to seriously penalize companies like Pacific Gas & Electric even after they’re convicted multiple times of manslaughter – Killing their own customers.

And the state Legislature is so obviously in the pocket of large Developers and Wall Street housing investors that it insists upon cities helping them build housing for which there are no assured buyers — housing that’s often likely to sit vacant or become short-term or corporate rentals .

But until now, the Ninth Circuit Court of Appeals, the federal court that often gets to oversee California laws, appeared at least somewhat independent.

Yet, its new ruling in a case involving mental health coverage by health insurance companies puts that supposition of Integrity into serious doubt.

This case ultimately stems from a 1999 state law called the Mental Health Parity Act, which requires that health insurers cover medically necessary treatment for most mental illness even when insurance policies written earlier explicitly exclude such coverage.

This law is particularly critical now, while Newsom is pushing a plan to let the authorities force the unhoused mentally ill into treatment even if it’s against their will. No one is quite sure how that might be paid for or carried out.

Enter the Ninth Circuit, sowing extreme confusion on the issue. In a decision this spring, a panel there overturned lower court rulings that required a large insurer to reconsider its denials in tens of thousands of claims for mental health, drug and alcohol addiction care —just the kind of treatments Newsom calls for.

The lower court decision, from federal Magistrate Judge Joseph Spero of San Francisco, said United Behavioral Health, manager of mental health services for the Giant United Healthcare, acted to “protect its bottom line” via restrictive criteria it set up to deny claims here and in several other states between 2011 and 2017.

They said the company’s policies did not provide sufficient coverage for treatments within generally accepted standards of care. But the Ninth Circuit’s baffling, Confused decision said group plans do not have to comply with all generally accepted care standards, but only must not conflict with them. Huh?

The appeals court received United Behavioral Health’s policies met that standard and followed them when denying coverage for both residential and outpatient treatment under plans written for self-insured persons and fully insured employee groups.

The appeals court ruling came despite unified support for the lower court decision from the American Medical Association, the American Psychiatric Association and other medical groups.

They entered the case because, they said, it could set a precedent for “all insurance companies that are providing employer-sponsored health benefits.”

But no matter, the Ninth Circuit said in appearing to reverse its own 2011 decision in a case where the Blue Shield of California tried to withhold mental health coverage. The court back then said Blue Shield was required under the state law to provide medically necessary health insurance for mental illness on a par with treatment for physical problems.

It cited findings by the state Legislature that mental health coverage limitations “result in inadequate treatment” and cause “relapse and untold suffering” for persons with treatable mental illness.

The Ninth Circuit has now thrown out this previous work, giving insurance companies an apparent license to return to the bad old days when they refused to provide almost any mental health coverage.

The court’s Reasoning here leaves a lot of open questions about what kinds of mental health care the companies must provide in California. Clearly, these will not be as broad in the future as they have been for most of the last 20 years.

The fact this comes at a time when Newsom’s planned remedy for homelessness includes a strong mental health treatment component lends a great irony to the picture, and involves especially bad timing.

But it should hardly shock anyone, considering how long and how thoroughly the political and legal apparatus in this state has favored corporations over their customers.

Email Thomas Elias at [email protected].

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