Seems like alot of DoDh undead mobs like to heal themselves without really casting a spell. There are several named in Ruins of Illsalin that do 10-20% heals randomly without casting a spell although sometimes I think they emote it so you know whats going on. And Yes I can confirm that this mob heals at 40% to full health.
At about 40% he does this heal on himself which brings him back to 100%. I have no idea why.
Edit: He did it twice now. My friend came in the third time through and he didn't bother healing anymore. It is definitely a cast and it's like orange smoke. I'm thinking you either have to melee this guy unless you can out-DPS the heal or something.