A.G. Schneiderman Announces Settlement With Excellus Health Plan To End Wrongful Denial Of Mental Health And Addiction
Unprecedented Enforcement Of Mental Health Parity Laws Leads To Fifth Settlement By Attorney General Schneiderman
Investigation Reveals Excellus Denied Inpatient Addiction Treatment Services At Least Twice As Often As Inpatient Medical Services Between 2011 And 2014, Including Nearly Seven Times As Often In 2012
Settlement With Excellus Requires Reforms To Claims Review Process, Could Net Up To $9 Million For Patients
NEW YORK – Attorney General Eric T. Schneiderman today announced the fifth settlement since last year in an unprecedented enforcement effort of mental health parity laws. The settlement, reached with Rochester-based Excellus Health Plan, requires the health insurer to cover residential treatment for behavioral health conditions and reform its procedures for evaluating behavioral health treatment claims. The settlement also requires Excellus to provide notice of a new appeal right to 3,300 members whose requests for inpatient substance use disorder rehabilitation and eating disorder residential treatment Excellus denied from 2011 through 2014. The estimated value of Excellus’s denial of these individuals’ requests is up to $9 million.
Excellus, which is part of the Blue Cross Blue Shield Association, has 1.5 million members and is upstate New York’s largest health plan. An investigation by Attorney General Schneiderman’s Health Care Bureau found that Excellus denied inpatient substance use disorder rehabilitation recovery services seven times as often as inpatient medical services.
“My office has taken an aggressive approach to enforcing mental health parity laws that I hope can serve as a national model,” said Attorney General Scheiderman. “Mental health and addiction recovery treatments must be regarded the same as other health insurance claims under the law. We will continue to take on those who ignore the law and reinforce the false and painful stigma often associated with these ailments.”
Today’s settlement with Excellus is the Attorney General’s fifth enforcing the mental health parity laws since last year. Insurers Cigna, MVP Health Care, and EmblemHealth have already entered into settlements, and last week, the Attorney General entered into a settlement with ValueOptions, the behavioral health vendor for MVP and Emblem.
New York’s mental health parity law, known as Timothy’s Law, was enacted in New York in 2006, and requires that insurers provide mental health coverage at least equal to coverage provided for other health conditions. The federal Mental Health Parity and Addiction Equity Act, enacted in 2008, prohibits health plans from imposing greater financial requirements or treatment limitations on mental health or substance use disorder benefits than on medical or surgical benefits.
Excellus, based in Rochester, is part of a community that, like many parts of New York State, is experiencing an opioid overdose epidemic with deadly consequences. Heroin overdoses in Monroe County have doubled in recent years, and have increased fivefold since 2011. In 2013 alone, there were 65 heroin-related deaths in Monroe County. Access to substance use disorder treatment – in particular inpatient rehabilitation treatment – is vital to addressing this scourge.
The Attorney General’s investigation revealed that many of Excellus’s inpatient substance use disorder rehabilitation denials were the result of its requirement that members fail outpatient treatment multiple times before accessing such care, which conflicts with New York State guidelines and is not applied by Excellus to medical care. The investigation also showed that some of these denials appear arbitrary and wrongly decided, and that Excellus did not cover residential treatment for behavioral health conditions in its standard contract. In one case, Excellus denied residential treatment coverage, due to lack of a benefit, for a 16-year old girl suffering from the eating disorder anorexia nervosa, even though she was at 83% of ideal body weight, had amenorrhea (the absence of menstruation), malnutrition, unstable vital signs, and bradycardia (a dangerously slow heart rate). The girl later attempted suicide and had to be hospitalized in a medical unit.
Under today’s agreement, Excellus will provide notice of a new appeal right to 3,300 members whose requests for inpatient substance use disorder rehabilitation and residential treatment it denied from 2011 through 2014. These members will get an opportunity to file an independent appeal, if they paid out of pocket for the treatment that Excellus denied, and did not previously file an external appeal. The estimated value of Excellus’s denial of these individuals’ requests is up to $9 million.
Excellus has agreed to cover residential treatment and will make available lists of facilities at which individuals may receive such care, subject to a determination of medical necessity and applicable in-network requirements. Excellus has also agreed to reform its claims process for behavioral health coverage, in particular for substance use disorders, by:
- Not imposing any preauthorization or concurrent review requirements for routine outpatient behavioral health services (i.e., psychotherapy and medication management);
- Covering partial hospitalization and intensive outpatient (“IOP”) treatment for behavioral health conditions;
- Not requiring that members demonstrate a substantial impairment in their ability to function in a major life activity in order to receive coverage for behavioral health care;
- Removing the requirement that members “fail” outpatient substance use disorder treatment before qualifying for inpatient rehabilitation treatment;
- Conducting full and fair reviews for services that require preauthorization, such as inpatient substance use disorder rehabilitation;
- Posting its behavioral health medical necessity criteria on a website, to improve the transparency of the review process;
- Applying the primary care co-payment amount to all routine outpatient behavioral services for all standard individual and small group products offered on the New York Health Benefit Exchange, the New York State of Health (the “Exchange”);
- Providing detailed, accurate oral and written explanations for denied claims, so that members can exercise their appeal rights;
- Employing in-house Behavioral Health Advocates, who can supply members and providers with assistance and information regarding claims denials, appeals, and in-network treatment facilities and providers in the member’s service area;
- Excellus will also post parity disclosures on its website, provide additional training to its staff, file regular compliance reports with the Attorney General, and pay $500,000 in fees and costs.
State Senator Phil Boyle, Chairman of the Senate Committee on Alcoholism and Drug Abuse,said, “One of the most pressing issues which surfaced during last year’s State Senate Heroin Task Force forums was the lack of adequate insurance coverage for addiction treatment. I applaud Attorney General Schneiderman for his continuing leadership through these settlements, ensuring that New Yorkers who suffer from addiction can obtain they treatment the need without having to spend their life savings to pay for it.”
State Senator Robert Ortt, Chair of the Senate Committee on Mental Health and Developmental Disabilities,said, “This settlement is another important step to ensure that individuals suffering from mental illness receive equitable and sufficient coverage. It will help those who were denied equal treatment. Perhaps just as significantly, this can help serve as a guide to better care moving forward. This is especially critical as the state expands and consolidates insurance while transitioning to managed care.”
“One of the biggest barriers to treatment of mental health and substance abuse disorders is stigma,” said Assemblywoman Aileen Gunther, Chair of the Assembly Mental Health Committee. “Insurance companies perpetuate stigma and delay treatment by improperly denying claims and putting up roadblocks. We would be horrified if somebody with heart disease were told they needed to ‘fail first’ before they got the care they needed. I applaud Attorney General Schneiderman for his dogged enforcement of Timothy’s Law and for being a champion to people whose lives are changed by substance abuse and mental illness.”
“I applaud Attorney General Schneiderman’s work to guarantee that New Yorkers in need of treatment for mental health or substance abuse issues can receive timely and effective care and treatment, as is the case for any other medical condition,” said Assemblymember Linda B. Rosenthal, Chair of the New York State Assembly Alcoholism & Substance Abuse Committee. “While I am disappointed that nearly 10 years after its passage, insurers in New York State are still not complying with the requirements of Timothy’s Law and are instead continuing to vilify and single out certain consumers for substandard treatment, I know that the Attorney General will continue to be the watchdog for the people of New York State.”
“We commend Attorney General Schneiderman and his staff for fighting to ensure mental health parity,” 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. These settlement agreements address many of these concerns. These agreements also send a strong message to the community that people are entitled to quality behavioral health care”
“LICADD is hopeful with these changes in healthcare policies more New Yorkers will have greater access to concrete treatment services for substance use disorders," said Steve Chassman, LCSW, CASAC, Executive Director of the Long Island Council on Alcoholism and Drug Dependence, Inc. "The full recognition of substance use disorders by insurance companies as a progressive, and potentially fatal, disease is long overdue. As with most diseases, assessment, diagnosis and treatment planning should be conducted by qualified healthcare professionals where the primary focus is with recovery and wellness. As this national substance use crisis continues to rage, causing devastation and loss to entirely too many New York families, LICADD commends Attorney General Eric Schneiderman and our Long Island elected officials for leading the efforts to preserve families, save lives and provide individuals with greater opportunity to engage the miracle of recovery.”
“The Legal Action Center applauds Attorney General Schneiderman for standing up for New Yorkers in need of substance use and mental health treatment," said Paul N. Samuels, Director and President of the Legal Action Center. "For too long, individuals with these disorders have faced barriers to treatment due to discriminatory practices by many health insurers. AG Schneiderman continues to lead the country in enforcing the groundbreaking federal parity law that prohibits such discrimination and helps people access health care. As New York and the country face a growing opioid addiction epidemic, and access to treatment is often a matter of life or death, enforcement of the parity law could not come at a more critical moment.”
“NAMI-NYS wholeheartedly supports the Attorney General’s active enforcement of Timothy’s Law,” said Wendy Burch, Executive Director of the National Alliance of Mental Illness New York State. “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.”
Consumers with questions or concerns about this settlement or other health care matters may call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.
The agreement with Excellus stems from a broader and ongoing investigation into health insurance companies’ compliance with mental health parity laws.
The investigation of this matter was conducted by Assistant Attorney General Michael D. Reisman, of the Attorney General’s Health Care Bureau, which is led by Bureau Chief Lisa Landau. The Health Care Bureau is a part of the Social Justice Division, led by Executive Deputy Attorney General for Social Justice Alvin Bragg.
A copy of the settlement can be read here.