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N.Y. AG settles with MVP Health Care for wrongly denying mental-health benefits

By Eric Reinhardt

Date:

New York Attorney General Eric Schneiderman on March 20 announced a settlement with Schenectady-based MVP Health Care after an investigation uncovered “widespread” violations of mental-health parity laws.

The probe found the health insurer denied mental-health benefits to “thousands” of New Yorkers, Schneiderman’s office said in a news release.

Schneiderman’s office estimates that more than 3,000 MVP members may be eligible for reimbursement for denied claims, including for residential treatment, the news release said.

The settlement requires the health insurer to reform its review process for behavioral-health claims; cover residential treatment; and charge the lower primary-care co-payment for outpatient visits to most mental health and substance-abuse treatment providers, Schneiderman’s office said.

The settlement also requires MVP to submit previously denied mental health and substance-abuse treatment claims for independent review.

That review could mean MVP will return more than $6 million to its members, according to Schneiderman’s office.

MVP Health Care did not respond to requests for comment by press time.

MVP Health Care covers more than 44,000 members in Central New York. The figure is part of more than 500,000 members in a New York service area that also includes the Albany region and the Hudson Valley, the news release stated.

State lawmakers enacted New York’s mental-health parity law, known as Timothy’s Law, in 2006. It requires that insurers provide mental-health coverage at least equal to coverage provided for other health conditions, according to Schneiderman’s office.

Schneiderman’s health-care bureau conducted an investigation that found MVP Health Care, through its behavioral-health subcontractor, Value Options, issued 40 percent more denials of coverage in behavioral-health cases than in medical cases since at least 2011.

In one case, the investigation found that MVP repeatedly denied coverage for the treatment of a young woman with a “very serious history” of substance-abuse disorder, even though her providers had prescribed inpatient rehabilitation, residential, and outpatient treatment. 

As a result, the woman’s family spent a “great deal of time on a long series of appeals,” and paid more than $150,000 out of pocket for her treatment, the office said.

Ensuring that New Yorkers have adequate access to mental health and substance-abuse treatment “should be a priority” for the state, Schneiderman said in the news release.

“Insurers must comply with the law to ensure that individuals with mental-health conditions are treated no differently than those with physical ailments and that they are getting what they pay for from insurers.  With this settlement, MVP Health Care commits to greatly improving treatment services available to thousands of New Yorkers,” Schneiderman said.

Under the settlement, MVP Health Care has agreed to cover residential treatment for behavioral-health conditions, including eating and substance-abuse disorders. It has also designated $1.5 million for reimbursement of members’ past residential-treatment claims that had previously not been covered.

MVP Health Care has agreed to overhaul its claims-review process by removing visit limits for almost all behavioral-health services; classifying claims correctly so that it conducts reviews “expeditiously” and it affords members full appeal rights; and by removing the requirement that members “fail” outpatient substance-abuse treatment before receiving inpatient-rehabilitation treatment, according to Schneiderman’s office.

In addition, MVP will base the number of treatment days or visits approved on members’ needs instead of arbitrary limits; co-locate medical and behavioral-health claims review staff, which will facilitate the coordination of members’ care; ensure that letters denying behavioral-health claims are “accurate and specific,” so that members can exercise their appeal rights.

Additionally, it its claims-review overhaul, MVP will continue coverage of treatment, pending the completion of internal appeals, so that treatment is not interrupted, according to Schneiderman’s office.

MVP Health Care has also agreed to provide members with an independent review of claims or requests that were denied as not medically necessary from 2011 through present, which could result in more than $6 million in reimbursement to members. 

The plan will also allow members to submit claims for reimbursement for residential-treatment services since 2011, which could result in MVP providing refunds of up to $1.5 million to members.

Under the settlement, MVP Health Care will also submit to monitoring and will pay $300,000 to Schneiderman’s office as a civil penalty, the office said.

The agreement with MVP is the second that Schneiderman’s office has reached so far this year and stems from a “broader, ongoing” investigation into health-insurance companies’ compliance with mental-health parity laws.

The office on Jan. 15 announced a similar settlement with Cigna Corp. (NYSE: CI).

Contact Reinhardt at ereinhardt@cnybj.com

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