ALBANY, N.Y. (AP) - An insurer covering more than 500,000 people in upstate New York has agreed to reform its handling of behavioral health claims, cover residential treatment and charge its lower primary care co-payment for outpatient mental health and addiction treatment, New York’s attorney general said Thursday.
Under the settlement, MVP Health Care members in the Hudson Valley, Albany area and central New York can resubmit those denied claims for independent review. Authorities said that could result in more than $6 million in payments, with $1.5 million designated for residential treatment that had not been covered. The insurer also will pay a $300,000 civil penalty.
“Insurers must comply with the law to ensure that individuals with mental health conditions are treated no differently than those with physical ailments and are getting what they pay for from insurers,” Attorney General Eric Schneiderman said.
MVP said Thursday it has established processes for resubmitting certain claims.
Since 2006, New York’s mental health parity law has required coverage at least equal to that of other health conditions. Schneiderman’s office has been investigating insurers’ compliance. It reached a settlement with Cigna Corp. in January after investigating a complaint that it had denied all but three insurance coverage claims for counseling for a 14-year-old New York City girl with an eating disorder.
Since at least 2011, MVP subcontractor ValueOptions issued 40 percent more coverage denials for behavioral health cases than the insurer did for medical cases, the attorney general’s Health Care Bureau said.
The bureau found that over the last three years, MVP denied almost 40,000 claims for mental health treatment, including 1,200 for inpatient psychiatric treatment, and 11,000 for treating drug and alcohol addictions, including 900 inpatient claims.
“Moreover, when it does approve more intensive levels of care, such as inpatient or partial hospitalization treatment, MVP will often approve just a few days or visits at a time,” the signed settlement agreement said. “MVP’s adverse determination letters denying behavioral health claims are generic and lack specific detail about why coverage was denied for particular members. The letters also fail to explain adequately the medical necessity criteria used in making the determinations and why members failed to meet such criteria.”
People with behavioral health claims from Jan. 1, 2011, to March 10, 2014, denied on grounds citing medical necessity will be contacted by the insurer and can resubmit them for independent outside review, MVP President Denise Gonick said. Claims during the period that included residential treatment will be automatically reviewed, she said.
“MVP is taking important steps to improve the ways in which it communicates decisions regarding claims for behavioral health benefits to its members,” she said in a prepared statement.