Insurers still dropping the ball on parity

While federal and state laws insist on parity for behavioral health treatment, insurers apparently are having a hard time with compliance.

Several health plans have ended up in court this year, ultimately  paying restitution and substantial penalties for wrongly denying coverage. Part of the problem lies in the fact that the typical management techniques insurers use for medical or surgical care don’t translate well to behavioral health, which gets them into legal trouble and causes detrimental treatment delays for patients.

“Be careful what you wish for because there are inherent problems in parity,” says Debbie F. Plotnick, MSS, MLSP, senior director of state policy for Mental Health America, a national advocacy organization. “You can’t look at medical necessity in the same way that you look at it for medical/surgical.”

Because behavioral health is driven by diagnosis and symptoms, determining medical necessity and aligning insurance coverage is a formidable task for insurers. They might be able to determine, for example, that a broken arm would heal after a certain amount of time and a certain number of physical therapy treatments, but they lack experience in making on-par coverage determinations for behavioral health.

“As long as they try to make them apples-to-apples, you’ll see more denials,” Plotnick says.

Likewise, insurers tend to target high-level specialist services in medical categories as areas for cost containment. Behavioral health providers have to make the case when high-level services, such as residential programs for substance-abuse treatment, are appropriate levels of care.

“We see people come into private insurance and the only services available are geared toward more acute situations,” Plotnick says. “Insurance companies are used to measuring more acute services, but their internal processes still look at how to hold down high payment for services that cost the most, such as inpatient and specialists.”

Insurer gives back $31 million

New York has been particularly aggressive in examining parity, and on July 9, settled a case against Emblem Health that calls for more than $31 million in restitution and a $1.2 million penalty to be paid by the insurer. This is the third such investigation by the state’s attorney general. In March, insurer MVP settled with New York for about $6 million, and in January Cigna settled at a cost of about $56,000. In each case, the insurers are also obligated to change their practices and policies, which will be further scrutinized by the state.

“State law clearly requires health insurance companies to provide mental health benefits on par with other medical benefits. There is no gray area here,” Attorney General Eric T. Schneiderman said in a press release.

Insurance giant UnitedHealthcare is also being taken to the woodshed in a class action suit in California on behalf of plan members. Among other points, the case questions the criteria United applied to coverage preapprovals for residential treatment, which allegedly conflicts with proven treatment standards.

Among the policies plans are reversing as a result of the settlements are “fail first” techniques—also called “step therapy”—that required patients to try less intense treatment before moving on to more intense treatment. For example, in the Emblem case, the insurer required patients to be unsuccessful in their substance-abuse outpatient treatment before they would be covered for inpatient treatment. The settlement requires the insurer to remove the fail-first policy.

Compare the facts

Emblem Health covers 3.4 million members and had 2012 revenues of $10 billion. New York found that the insurer’s spending on behavioral health dropped from 3.6% of its overall spending to 2.6% between 2011 to 2013—which is far below the national benchmark of 7.3%.

The settlement document provides particulars of how Emblem Health handled behavioral claims in comparison to medical claims from January 2011 to mid-2013:

The document also specifies the number of denials from January 2011 to mid-2013:

·         4,000 approval requests for inpatient psychiatric treatment;

·         2,500 claims for inpatient psychiatric treatment;

·         2,300 approval requests for inpatient substance abuse rehabilitation; and

·         2,000 claims for inpatient substance abuse rehabilitation.

More online

Read the settlement document here.