Insurers in New York are agreeing to reform their policies for behavioral healthcare treatment and rehabilitation coverage, after an "unprecedented enforcement effort of mental health parity laws."
Excellus BlueCross BlueShield, serving in western New York with 1.5 million members, is promising to change its practices for behavioral health and addiction treatment, and potentially cover up to $9 million in previously-rejected claims for 3,300 members, under a settlement with state attorney general Eric Schneiderman.
Nonprofit Excellus is the latest insurer in the Empire State to agree to changes after probes from Schneiderman, following similar settlements Cigna, MVP Health Care, and EmblemHealth.
In the case of Excellus, Schneiderman's office conducted an investigation into coverage for mental health and addiction treatment--amid an "opioid overdose epidemic" in upstate New York--and found that claims for inpatient substance abuse rehabilitation recovery services were being denied seven times as often as inpatient medical services.
The investigation found that a lot of denials for inpatient substance use disorder rehabilitation were the result of a health plan policy requiring members to first try outpatient treatment at least several times. That "conflicts with New York State guidelines and is not applied by Excellus to medical care," Schneiderman's office said.
In July 2012, the insurer denied almost half of all coverage requests for inpatient substance abuse rehab, including for individuals using multiple drugs daily--alcohol, heroin, prescription narcotics, "bath salts" or crack cocaine--and for some individuals who had previously overdosed or attempted suicide.
The investigation also found some denials that were "arbitrary and wrongly decided," failing to cover residential treatment for conditions in its contract. One patient, a 16-year old suffering from anorexia nervosa, malnutrition and a slow heart rate, was denied residential treatment and then later attempted suicide and was hospitalized.
"My office has taken an aggressive approach to enforcing mental health parity laws that I hope can serve as a national model," said Schneiderman. "Mental health and addiction recovery treatments must be regarded the same as other health insurance claims under the law."
Rochester-based Excellus is "part of a community that, like many parts of New York State, is experiencing an opioid overdose epidemic with deadly consequences," Schneiderman said. Overdoses of heroin have increased fivefold since 2011 in Rochester's Monroe County, with 65 heroin-related deaths in 2013.
"Access to substance use disorder treatment, in particular inpatient rehabilitation treatment, is vital to addressing this scourge," Schneiderman said.
Under the settlement, Excellus has to offer appeal opportunities to 3,300 members whose requests for inpatient substance abuse rehabilitation and eating disorder residential treatment were denied from 2011 through 2014. Those claims amount to an estimated total of $9 million. The settlement also requires 10 changes to the insurer's policies.
Excellus has promised refrain from preauthorization for routine outpatient behavioral health services such as psychotherapy and medication management, stop requiring outpatient therapy as a step before inpatient rehabilitation, and stop requiring a demonstrated "impairment in the ability to function in a major life activity" as a condition for behavioral healthcare.
The insurer will cover partial hospitalization and intensive outpatient treatment for behavioral health conditions, post behavioral health necessity criteria online "to improve the transparency of the review process," apply primary care co-payments to all routine outpatient behavioral services for individual and small group plans sold in the state exchange, and employ eight behavioral health advocates to help guide members and providers through the options, networks and policies.
Under the settlement, Excellus will also post mental health parity disclosures on its website, complete additional training with staff, file regular compliance reports, and pay $500,000 in fees to the state.
"We've worked closely and cooperatively with the New York State Attorney General's Office for two years, responding to its broad industry-wide inquiry into the complexities of administering behavioral health benefits," said Jim Redmond, communications and community investment VP at Excellus.
"During that time, we've made a number of behavioral health benefit and policy changes prompted by recent revisions in the law and regulations as implemented by the New York State Department of Financial Services. We remain fully committed to providing our members with the information and resources to secure coverage for medically necessary behavioral healthcare."
The settlement is being lauded by mental health advocates who long been seeking more comprehensive coverage for expensive treatment options like inpatient and residential therapy.
It sends a message "that people are entitled to quality behavioral healthcare," said Glenn Liebman, CEO of the Mental Health Association of New York State. "The tenets of mental health parity are to ensure access to services, expand networks of care, eliminate barriers that don't currently exist for physical health benefits and create a strong right to appeal."
Wendy Burch, the executive director of the National Alliance of Mental Illness New York State, is more blunt, arguing that insurers need to be closely supervised in the transition to mental health parity. "By not treating mental health claims in the same manner as other physical illnesses, insurance companies are guilty of blatant discrimination and place those suffering at increased risk while hampering their chance at recovery," Burch said.
A case for investing in mental wellness With new essential health benefit rules, some insurers are starting to take a more proactive approach to mental and behavioral health.