Over the past four years, eight states have implemented corrective actions against 29 health plans and behavioral health organizations (BHOs) for parity violations and similar deficiencies related to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (the Federal Parity Law) and applicable state laws. To date, the states have assessed over $13 million in fines and related payments for these violations which helped fund mental health and substance use (MH/SUD) services.
The Kennedy Forum expects these enforcement actions to become more commonplace as states become more knowledgeable about how to make sure health plans and BHOs comply with regulatory requirements.
Note: Market conduct enforcement actions are cited in reverse chronological order.
On November 19, 2020, Insurance Commissioner Trinidad Navarro published a press release announcing the completion of the first in a series of Mental Health Parity examinations involving our major health insurers in Delaware. Two of the four exam reports have been published, resulting in $597,000 in parity violations thus far. The press release notes:
The 2018 passage of SB 230 required companies to submit an initial analysis of mental and behavioral health coverage to the department in 2019, after which the department would include compliance reviews in their annual market conduct exams. A high number of violations was expected due to this being the first assessment by the department.
“After an incredibly thorough review, our team identified many changes that needed to be made to improve parity. Today’s announcement shows that there is more work to do to ensure those seeking mental health care can do so without undue expense or difficulty. I will continue to hold insurers accountable to meet our state’s standards,” said Commissioner Navarro. “Each violation incurred a fine, but it also brought about important conversations that will result in action, and insurers have been cooperative throughout the process and are already making improvements. We will be following up with insurers frequently and expecting substantial progress.”
In general, the violations found in policies and practices revolved around a lack of parity between mental health and medical/surgical procedures, medications and procedure preauthorization requirements. Mental health patients often had to meet higher standards for Non-Quantitative Treatment Limitation (limits on the scope or duration of benefits) than other patients, and pharmacy requirements appeared to differ as well. The companies are working to resolve these differences.
Parity Violations Published Reports
The two major health insurers where the market exam findings have been published are Aetna Health Plan and Highmark BCBSD Inc. The audit focused on the following health plan lines of business: forms, complaint handling, grievances and appeals, and claims.
Aetna Health Plan
In terms of parity-related violations, the Delaware Department of Insurance identified the following deficiencies against Aetna (Note: Findings are quoted directly from the report in most instances):
See 18 Del. C. § 3343(b)(1)(b) Insurance coverage for serious mental illness and 45 CFR § 146.136(c)(4)(ii)(a)(b) Nonquantitative treatment limitations.
Highmark BCBSD Inc.
In terms of parity-related violations, the Commissioner identified the following deficiencies against Highmark (Note: Findings are quoted directly from the report in most instances):
See 18 Del. C. § 3343(b)(1)b and (b)(2)a. Insurance coverage for serious mental illness, and 18 Del. C.§ 3350(b) Prescription medication; 45 CFR 146.136 (c)(4)(i) General rule and 45 CFR 146.136 (c)(4)(ii)(A); 8 Del. Admin. C. 902 § 126.96.36.199 Authority for Regulation; Basis for Regulation
On July 30, 2020, the Connecticut Insurance Department published a market conduct exam involving Oxford Health Insurance (dba Oxford HealthPlans) and UnitedHealthcare Insurance Company. On January 1, 2021, these health plans and United Behavioral Health entered into a stipulation and consent order that included the payment of $575,000 in fines and $500,000 to fund education programs.
The examination covered three calendar years covering 2015 through 2017 and was limited to Connecticut business. The audit covered a full range of insurance activities including the solicitation of new business, marketing and sales, agent licensing and appointment, underwriting and rating, policyholder services, compliant handling, network adequacy, provider credentialing, claim processing, company operations, and parity violations. Elements of the review did include compliance with federal and state MH/SUD parity requirements as well.
Although many elements of the review were satisfactory, the insurance regulators identified several problem areas. Here are some findings covering the health plans in a July 22, 2020 Market Conduct Report:
In addition to the fine and education payment associated with the stipulation and consent order, the following findings were made:
In the final order, the health plans deny that they violated applicable state laws but waive their rights to further hearings on the matter. The health plans agreed to corrective action plans to address these deficiencies and will provide the CID a full report within 180 days (on or about July 1, 2021).
On July 15, 2020, The Illinois Department of Insurance (IDOI) announced fines totaling over $2 million for five major health insurance companies found to be in violation of the Federal Parity Law. The Market Conduct Examination Reports can be found online here.
Market conduct examinations performed by IDOI from 2015-2017 found that CIGNA, UnitedHealthcare, HCSC (parent company of Blue Cross Blue Shield) and Celtic had violations that resulted in the following fines:
In summary, all five health plans were found to be in violation of the law have agreed to take corrective action based on the exam findings. For each “stipulation and consent order” signed by the parties, the health plans have thirty (30) days to submit proof of compliance with each of the infractions referenced above. The IDOI plans to conduct follow up exams to ensure the health plans remain in compliance.
The Massachusetts Office of Attorney General reached Assurance of Discontinuance (AOD) agreements with five health insurance companies and two companies that manage behavioral health coverage for insurers that will provide more than one million Massachusetts residents with improved access to behavioral health services. The state regulatory enforcement agreements with the health plans can be found online here.
The five assurances of discontinuance involve: 1) Harvard Pilgrim Health Care and United Behavioral Health d/b/a Optum; 2) Fallon Community Health Plan and Beacon Health Strategies; 3) AllWays Health Partners; 3) Blue Cross Blue Shield of Massachusetts; and 5) Tufts Health Plan.
Here are the highlights of the enforcement action:
In 2017, the New Hampshire Insurance Department started market conduct examinations of Anthem, Ambetter by NH Healthy Families, and Harvard Pilgrim. The regulatory review reflects an 18-month look at the health plans’ adherence to the Federal Parity Law during the exam period of January 2016 to July 2017.
In several examination reports published in early 2020, the Department found that Anthem and Harvard Pilgrim had a number of problems associated with the offering and reimbursement for MH/SUD treatments. In particular, the state observed that both health plans are reimbursing providers for mental health services at lower rates than they do for other medical treatments. The findings stop short of accusing the health plans from violating the Federal Parity Law. The reports represent a warning sign and it puts an obligation on the carrier to come forward with documentation about what their procedures and standards are for setting reimbursement rates. The health plans disagreed with the findings.
The state is requiring Anthem and Harvard Pilgrim to demonstrate comparable provider reimbursement practices as written and in operation. The health plans shall:
The state is also requiring the health plans implement and adhere to the written plan to ensure that each health plans is taking steps to develop a MH/SUD network that is comparable to the steps it takes to develop a M/S network, factoring in patients’ needs. The health plans must continue to undertake efforts to capture and understand MH/SUD treatment needs of at-risk populations and work to address those needs. The requirement to take steps to develop its MH/SUD network that are comparable to the steps it takes to develop its M/S network shall not be interpreted to require the Company to achieve comparable results, as there may be exogenous factors beyond the Company’s control that contribute to disparate outcomes.
Other minor violations were identified in the market conduct exam reports regarding specific ways the policies were designed and payments were made. Anthem and Harvard Pilgrim contested the report findings but will comply with the corrective action plan put forth by the state. The health plans will provide quarterly reports back to the states for two years. Other follow-up actions are outlined if the health plans fail to meet the conditions of the settlement agreements.
In a third review against Ambetter by NH Health Families, the state found a number of MH/SUD violations regarding prior authorization, appeals, how claims were paid processed, financial/quantitative treatment limitations (QTLs) comparability analysis requirements, failure to include some benefits (such as treatment for injuries due to self-harm), some network adequacy issues, balance billing, etc. The health plan agreed to a corrective action plan to be submitted within 60 days with follow-up from the state with a targeted market conduct exam.
No financial fines appeared to be assessed against the three health plans.
The Pennsylvania Insurance Dept. officials announced in early Nov. 2019 a $1 million fine against United Healthcare. Based on violations of the Federal Parity Law and other violations contained in the report, UnitedHealthcare has agreed to pay restitution to consumers from claims wrongly denied, overpaid out-of-pocket expenses, and interest on delayed claims. The plan also has agreed to develop an $800,000 public outreach campaign to educate consumers about their mental health and substance use disorder benefits.
The report, which covers the period from January 2015 through March 2016, found extensive noncompliance with mental health parity and prompt pay laws, as well as concerns with the company’s coverage for services relating to autism spectrum disorders and substance use disorders. The examination also covered company operations, handling of consumer complaints, and policyholder services.
Market conduct results and recommendations include:
The Pennsylvania Department of Insurance fined Aetna $190,000 for violating rules on coverage of drug and alcohol abuse treatment and autism. The market conduct exam report can be viewed online here.
The corrective action and fine was a result of DOI’s review of insurer’s operations in PA between January 2015 and March 2016. Specific violations included: incorrect application of copays, coinsurance, and visit limits, as well as violations involving prior authorization for treatment and step therapy.
BlueCross BlueShield of Rhode Island agreed to pay $5 million to expand mental health services following a state audit that found insurer to be out of compliance with state and federal laws. The market conduct exam report can be found online here.
The state investigation found that the requirements for prior authorization of prescription drugs used to treat mental health conditions led to, or caused a potential to, impede or delay care. Specifically, the health plan reviewed in-patient care for MH/SUD more frequently than it did on the physical health side, and that there were times when a less costly drug was used to treat certain mental health conditions when the more expensive drug would be the preferred choice. As a result, the health plan agreed to pay $5 million into a fund at the RI Foundation used for prevention of mental health problems and intervention, in lieu of paying a traditional fine.
Additional background can be found in this U.S. News and World Report article.
Report issued to summarize results of NYAG’s industry-wide initiative to investigate health plans’ compliance with state and federal parity laws. The Attorney General findings can be viewed online here.
The enforcement action includes eight (8) agreements with seven (7) health plans, including: MVP, EmblemHealth, Excellus, Beacon Health Options, Cigna, HealthNow and Anthem:
Through the work of the NYAG, plans are imposing fewer barriers to necessary mental health treatment, plans reimbursed more than 300 consumers over $2 million for their out-of-pocket costs for previously denied claims, plans paid a total of $3 in penalties, and plans are letting providers prescribe, without preauthorization, MAT for patients suffering with SUD.
California Department of Managed Health Care reached settlement with Kaiser to address repeated failures to provide patients with timely access to mental health services. The Stipulated Settlement Agreement can be viewed online here.
Kaiser agreed to make corrections in six (6) areas: 1) improved documentation of Plan’s quality improvement efforts for access compliance and development of Behavioral Health Quality Assurance document; 2) improved transparency in behavioral health appointment access compliance measurement; 3) improved monitoring of member impact of access insufficiency and associated real time member remediation; 4) full implementation of systematic process to monitor follow-up appointment access adherence to member’s treatment plan; 5) improved internal corrective action plan development; and 6) improved integration of external provider access data and oversight. If Plan does not meet benchmarks in Agreement, fines will be incurred (up to $1 million).
Kaiser agreed to hire an outside consultant for three (3) years to help address access problems and improve oversight of behavioral health program.
This Settlement follows years of warnings to Kaiser for violating state law (Examples: In 2013, Kaiser agreed to pay $4 million fine for failing to get patients into appropriate treatment soon enough; In 2015, CA Department of Managed Health Care found some Kaiser patients still had to wait weeks or months to see psychiatrists or therapists; In June 2017, CA Department of Managed Health Care found Kaiser continued to have deficiencies)
Oregon Department of Consumer and Business Services issued proposed enforcement order to four (4) insurance companies related to categorical denial of mental health treatments including ABA therapy. Details about the enforcement order can be viewed online here.
Oregon law requires insurers to cover all medical services for a child enrolled in the plan who is younger than 18 years old and who has been diagnosed with a pervasive developmental disorder including autism. Those services include rehabilitation services, such as speech therapy, that are medically necessary and are otherwise covered under the plan. The health plans fined by the state include Pioneer Educators Health Trust (fined $100,000), Regence BlueCross BlueShield of Oregon (fined $100,000), United Healthcare (fined $110,00) and Kaiser Foundation Health Plan of the Northwest (fined $250,000).