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State Parity Regulatory Enforcement Actions

Fall 2020

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.

 

Delaware – Commissioner Announces First Market Conduct Mental Health Parity Exams including $597,000 for Initial Parity Violations (November 2020)

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):

  • Improper SUD Pre-Authorization Requirements.
    • Aetna’s pre-authorization requirement includes establishing a diagnosis of opioid dependence, proof of counselling and abstinence from all opioids monitored through drug screening. This additional prior authorization requirement causes treatment delay and is excessive and discriminatory to members who need mental health/substance abuse care.
    • Aetna imposed a NQTL of a prior authorization every 6 months on all buprenorphine and buprenorphine/ naloxone containing medications (both brand and generic) used for the treatment of Opioid Use Disorder (OUD). When comparing to opioid medications used for pain management (MED/SURG) the Company offers Butrans (buprenorphine) transdermal patch approved for chronic pain (MED/SURG), without a prior authorization requirement, and Belbuca (buprenorphine) buccal film approved for chronic pain (MED/SURG) with a prior authorization duration of 1
  • Unfair Formulary Tiers.  Aetna imposed higher tier placements (Tier 3) on buprenorphine hcl sublingual tablets, buprenorphine/naloxone sublingual tablets, methadone (all strengths), naltrexone tablets, Suboxone films, and Bunavail. This is a violation by placing higher tiers (Tier 3) on the substance abuse medications used to treat Opioid Use Disorder (OUD) compared to MED/SURG medications which exhibit lower tier designations (Tier 1 and Tier 2) in every medication classification throughout this formulary. Comparing these aforementioned substance abuse medications to MED/SURG medications classified                in this formulary, the patient/member would be paying higher copays resulting in higher cost to treat their
  • Inappropriate Medication Restrictions.
    • Aetna applied a NQTL (quantity limitation/dose restriction) on max dosing of duloxetine for Major Depressive Disorder (MDD) and Generalized Anxiety Disorder (GAD) that was not included on max dosing for its MED/SURG indications. The recommended maximum dose for duloxetine is 120mg per day for Major Depressive Disorder (MDD) and Generalized Anxiety Disorder (GAD) in accordance with both the FDA and the American Psychiatric Association’s (APA) recommended Duloxetine’s other indications such as Diabetic Peripheral Neuropathic Pain (DPNP), Fibromyalgia (FM), and Chronic Musculoskeletal pain all have a maximum dosage of 60mg per day. None of these MED/SURG indications require a prior authorization at their maximum dose. However, a prior authorization override is required at doses of 120mg per day for only mental health indications (MDD and GAD). This policy is discriminatory towards mental health members since the same maximum dosing criteria is not provided equally to MH/SUD and MED/SURG indications.
    • Aetna applied a NQTL (quantity limitation/dose restriction) on max dosing of duloxetine for Major Depressive Disorder (MDD) and Generalized Anxiety Disorder (GAD) that was not included on max dosing for its MED/SURG The recommended maximum dose for duloxetine is 120mg per day for Major Depressive Disorder (MDD) and Generalized Anxiety Disorder (GAD) in accordance with both the FDA and the American Psychiatric Association’s (APA) recommended guidelines. Duloxetine’s other indications such as Diabetic Peripheral Neuropathic Pain (DPNP), Fibromyalgia (FM), and Chronic Musculoskeletal pain all have a maximum dosage of 60mg per day. None of these MED/SURG indications require a prior authorization at their maximum dose. However, a prior authorization override is required at doses of 120mg per day for only mental health indications (MDD and GAD). This policy is discriminatory towards mental health members since the same maximum dosing criteria is are not provided equally to MH/SUD and MED/SURG indications.
    • Aetna placed quantity limitations on ADHD stimulant-based medications When comparing the same criteria to MED/SURG, many MED/SURG medications exceeded their FDA, manufacturer, and peer reviewed literature dosing guidelines during the scope of the exam. This resulted in many paid MED/SURG claims with no dosing restrictions on above label/off label dosing. The Company is being more stringent/restrictive on ADHD medications, prescribed under physician supervision, by holding this type of mental health medication to FDA and manufacturer recommended guidelines. Quantity limits were later adjusted and raised on various ADHD medications as a result of excessive overturn rates on appeals (74%) from the entire class of ADHD medications. The Company applied quantity limitations (off label dosing) to ADHD medications more stringently than the processes, strategies, evidentiary standards, and other factors being applied to MED/SURG

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):

  • NQTL Coverage Violation.
    • Highmark excluded methadone medication treatment in 2016, 2017, and all preceding years for opioid use disorder (OUD) at outpatient/ambulatory care prior to January 2018.
  • Improper Utilization Management/Claims Processes. Highmark:
    • Imposed a restrictive prior authorization with a 60-day lookback on medication fills greater than a 5-day supply of buprenorphine sublingual tablets (monotherapy) for Opioid Use Disorder (OUD) thus denying immediate access in emergency situations;
    • Failed to correctly identify ASAM criteria when used with SUD; and
    • Failed to provide notice of acceptance or denial or status within 30 days for the noted
  • Inappropriate Medication Restrictions. Highmark:
    • Used criteria that are more stringently applied to these mental health medications and are not comparable to policies for medical/surgical medications;
    • When compared to medical/surgical medications, imposed improper NQTLs on coverage for:
      • Venlafaxine ER 150mg capsules for the treatment of Major Depressive Disorder (MDD) by establishing a step therapy policy that is more stringently applied to this medication;
      • Brintellix/Trintellix, desvenlafaxine ER, Fetzima, Khedezla, Pristiq, and Viibryd for the treatment of Major Depressive Disorder (MDD);
      • Various atypical antipsychotics (quetiapine, risperidone, and ziprasidone); and
      • Evzio and Narcan nasal spray (vials, syringes) of 4 doses every 360 days.

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 § 1.2.1.5 Authority for Regulation; Basis for Regulation

Connecticut – State Executes Stipulation and Consent Order against 4 Health Plan Subsidiaries with over $1 Million in Fines and Education Payments (July 2020 and January 2021)

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:

  • NQTL Disclosure Requirements. The Respondents imposed nonquantitative treatment limitations (NQTLs) with respect to MH/SUD benefits and was, therefore, required to provide detailed explanations of how its analysis of its underlying processes, strategies, standards and other factors used to apply NQTL to MH/SUD and to medical surgical benefits have led the Respondent to conclude that the NQTLs were applied, as written and in operation, in a manner that was comparable     and not more stringent for MH/SUD than for medical/surgical services and was, consequently, in conformance with legal
  • Lack of Documentation. The Respondent was unable to provide adequate documentation demonstrating compliant parity analyses, despite numerous requests and guidance from examiners, notwithstanding that it was noted that during the period under examination, the Respondent’s application of the NQTLs was contributing to operational outcomes that produced non-comparative predominant
  • Other Parity Concerns. The following areas of concern were also noted, between the rate at which SUD providers and Medical Surgical Providers were accepting new patients in the out-of-network claims rate between MH, SUD and Med/Surg benefits, in the claims denial rate between SUD benefits and Med/Surg benefits, in the rate of fail-first and step therapy programming, applied utilization review management required and pre-authorizations between MH, SUD and Med/Surg benefits, in the average In-Patient stay rate and outpatient treatment/rehabilitation visit rate between SUD benefits and Med/Surgical benefits, in the rate of required pre-authorizations within the drug formularies between SUD Rx benefits and Med/Surgical Rx benefits, and, in the reimbursement rates between Med/Surgical providers, MH providers and SUD

In addition to the fine and education payment associated with the stipulation and consent order, the following findings were made:

  • ASAM Guidelines. United Behavioral Health failed to utilize criteria consistent with the American Society of Addiction medicine (ASAM) Patient Placement Criteria.
  • Parity Compliance Documentation. Oxford Health Insurance was unable to provide to the regulators documentation demonstrating compliant parity comparability analyses.  As a result, Oxford’s operations appeared to result in differing outcomes between MH/SUD benefits and medical/surgical benefits for claim denial rates, the application of fail-first and step therapy programming during the UM process, the average in-patient stay rates and outpatient treatment/rehab visit rates, pre-auth Rx requirements and provider reimbursement rates.

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).

Illinois: State Levies $2 million in Fines against 5 Health Plans due to Parity Violations (July 2020)

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:

  • CIGNA Healthcare of IL was fined $582,000 for failing to:
    • Use the American Society of Addiction Medicine (ASAM) guidelines as required by Illinois law;
    • Allow providers to request a medical exception process that allows covered person or an authorized representative to request any clinically appropriate prescription drug;
    • Implement a step therapy exception request process; 
    • Notify the party filing the appeal and all other necessary parties of all the information required to evaluate the appeal in a timely manner and then orally notify all of the parties in the appeal of the decision;  
    • Implement reasonable standards for the prompt investigation and settlement of claims; and
    • Effectuate prompt, fair and equitable settlements when liability is reasonably clear.  
  • United Healthcare Companies was fined $550,000 for failing to: 
    • Follow proper appeal timeframes and notification requirements (including notifying orally the person filing the appeal, the enrollee, their primary care physician and the ordering provider of the appeal decision); 
    • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations; 
    • Use the  ASAM guidelines as required by Illinois law; and
    • Implement adjusted maximum benefits for Autism Spectrum Disorders.
  • CIGNA Health and Life was fined $418,000  for failure to:
    • Notify the party filing the appeal and all other necessary parties of all the information required to evaluate the appeal within three (3) business days and then orally notify all of the parties in the appeal of the decision;  
    • Acknowledge with reasonable promptness pertinent communications with respect to all claims; 
    • Respond to the department of insurance of complaints received by the department in a timely manner;
    • Use ASAM patient placement criteria when making medical necessity determinations; and
    • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations.
  • Health Care Service Corporation (HCSC) was fined $325,000 for failure to:
    • Notify all parties involved with the appeal of health plan’s decision; and
    • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations.
  • Celtic was fined $208,000 for failing to:  
    • Perform the substantially all/ predominant cost-sharing tests before insurance policies were issued;
    • Prevent policies from being issued that do not meet the cost-sharing requirements;
    • Acknowledge with reasonable promptness pertinent communications with respect to all claims; and
    • Pay interest on health claims beyond the thirty (30) days of receipt of written proof of the loss.  

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.

Massachusetts – Assurance of Discontinuance Agreements Executed with 5 Health Plans and 2 BHOs (February 2020) along with over $900,000 in fines.

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: 

  • Settlement (aka Assurance of Discontinuance) Agreements.  
    • The Commonwealth asserts the health plans and behavioral health organizations (BHOs) covered in the AODs have not complied with the Federal Parity Law and applicable state law provisions. 
    • The health plans and BHOs are paying payments into a trust fund in amounts ranging from $60,000 to $275,000.
    • The settlements include robust reporting requirements on several key areas described below. 
    • All five AODs follow similar fact patterns and assurance requirements (with some customization for each health insurance arrangement offered by each plan and/or BHO).
    • The three areas of focused investigation covered:
      • Provider Access/Provider Directories – Applies to all 5 AODs
      • Provider Reimbursement Rates – Applies to 3 of the AODs (includes Fallon/Beacon, Allways/Investigation and Harvard/Optum) 
      • Utilization Management — Applies to 3 of the AODs (includes Fallon/Beacon, Allways/Investigation, Harvard/Optum).
  • Provider Access/Provider Directories.  A central focus of the remediation plan is to improve the MH/SUD provider network for each health plan vis-à-vis their respective provider directories.  
    • The health plans must address the following provider directory deficiencies:
      • Failure to provide accurate updates on providers availability to see new patients for outpatient services;
      • The posting/publishing of inaccurate provider contact information; 
      • Inadequate searching capabilities for consumers to identify provider options who can see patients through their participation in group practices; and
      • Failure to accurately   identify which health insurance policies accept specific providers as “in network”.
    • The health plans must improve the accuracy and timelines of the provider directories to include: 
      • Identifying when each provider listing was updated electronically and the date of printing of any paper directory;
      • Whether each provider is accepting new patients;
      • Sharing information to allow consumers to file a complaint with the MA DOI if there is an issue; 
      • The ability to process most updates within 30 days; and
      • Clearly identifying whether the health plan is using a BHO vendor to maintain the MH provider network.
    • The Settlements identifies how the provider directories should be formatted/published.
    • The health plans/BHOs need to complete quarterly audits of the provider network to ensure ongoing accuracy.
  • Provider Reimbursement Rates (not applied to BCBS of MA and Tufts)
    • The health plans and BHOs shall use a methodology and processes for establishing behavioral health care provider reimbursement rates for all levels of provider licensure that is, as written and in operation, comparable to, and applied no more stringently than, the methodology and processes used for establishing medical/surgical provider reimbursement rates and that complies with the Federal Parity Law..
    • When a BHO partner is used, the “allowed amounts” shall be reported annually by the plan for medical/surgical physicians and separately by the BHO for behavioral health care physicians, PhDs, master-level clinicians, and nurse practitioners for each designated CPT code.
  • Utilization Management (not applied to BCBS of MA and Tufts)
    • The health plans and BHOs must disclose their respective utilization management policies and procedures, including requirements relating to prior authorization.   
    • The UM program shall include: 
      • Notification that health plan members do not ever need prior authorization to be admitted as an inpatient to a facility from a licensed emergency department to receive behavioral health care;
      • Notification that routine behavioral health care services do not require prior authorization; and
      • Identification of prior authorization processes and requirements applicable to all behavioral health outpatient services that are not routine behavioral health care services.
    • The health plans and BHOs shall document the processes, evidentiary standards and other factors used to develop and apply utilization management techniques for outpatient behavioral health care and how such processes, evidentiary standards, and other factors were applied comparably with respect to utilization management techniques used for outpatient medical/surgical care.

New Hampshire – Market Conduct Exams Identify Deficiencies with Anthem and Harvard Pilgrim Parity Compliance (Feb 2020)

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: 

  • Develop, in writing, an analytic framework describing its provider reimbursement practices.  For example, the health plans need to demonstrate a framework that is sufficiently objective and verifiable through quantitative metrics that can be used to demonstrate their respective processes, strategies, evidentiary standards and other factors for provider reimbursement are comparable and that they do not apply them more stringently to MH/SUD services.
  • Utilize this framework (1) to re-evaluate its MH/SUD statewide fee schedules at the beginning of the monitoring period and (2) to review its MH/SUD statewide fee schedules annually thereafter. In doing so, the health plans shall make such adjustments to their respective schedules as are warranted by the conscientious application of this framework.  
  • If the health plans use custom fee schedules for certain providers or provider groups that depart from the statewide fee schedules, the framework shall explain how the processes and factors relied upon in establishing that variation from the statewide fee schedule are consistent with the Federal Parity Law’s comparability requirements and whether the applicable health plan is applying its processes, strategies, evidentiary standards and other factors for determining reimbursement rates more stringently to MH/SUD services by acting in a manner that is arbitrary or discriminatory.

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. 

Pennsylvania – State Assesses $1.8 Million in Payments Associated with United Healthcare Parity Violations (November 2019)

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. 

To view the Pennsylvania Insurance Department press release, click here.  The Market Conduct Exam Report can be viewed online here

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:

  • Review and revision of internal control procedures to ensure compliance with the mental health and SUD parity compliance requirements including:
    • Evaluate QTL analyses and ensure that each QTL for mental health or SUD benefits in each classification is not more restrictive than the predominant financial requirement or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification
    • Evaluate NQTL analyses and ensure that for each NQTL for mental health or SUD benefits in each classification, the processes, strategies, evidentiary standards, or other factors used in applying that limitation to mental health or SUD benefits within that classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards or other factors used in applying the limitation to medical/surgical benefits in the classification
    • Reprocess claims for all Pennsylvania members that may have been impacted to determine if restitution, including interest, is due.
  • Revision of its procedures to ensure that initial internal complaint review processes are completed within 30 days of the receipt of a complaint – along with revision of other internal complaint processes to comply with state law
  • Ensuring that all clean claims including autism spectrum disorders (ASD) diagnostic and treatment claims are paid within 45 days of receipt 
  • Ensuring that applicable interest is paid to any unpaid claims identified in the Examination Report 
  • Improvement of complaint processes to ensure compliance with state law regarding the complaint appeal processing and acknowledgement notifications.
  • Revision of internal control procedures to ensure compliance with the claims handling requirements including:
    • Conducting a reasonable investigation based on all available information for claim processing
    • Affirming or denying coverage within 45 days after proof of loss for the claims   received
    • Providing Prompt, fair and equitable settlements are being provided to the claimants
    • Providing an explanation of benefits that properly represents the activity of the claim after sending a letter requesting information to the subscriber
    • Providing a reasonable explanation   in the insurance policy in relation to the facts or applicable law for the denial of a claim or for the offer of a compromise settlement.
  • Revision of its processes to ensure compliance with state and federal law regarding Essential Health Benefits and cost-sharing requirements.

Pennsylvania – State fines Aetna, Inc. $190,000 for Parity Violations (January 2019)

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.

Rhode Island – State Requires BlueCross BlueShield of Rhode Island to Pay $5 Million in Support of Mental Health Care (September 2018)

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.   

New York -- NY State Office of the Attorney General Assesses $3 million in Fines Against 7 Health Plans for Violating State and Federal Parity Requirements (May 2018)

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:

  • Four (4) settlements required plans to implement reforms in their administration of behavioral health benefits, particularly related to medical management practices, coverage of residential treatment, co-pays for outpatient treatment, and regular submission of compliance reports
  • Two (2) of the settlements focused on coverage of particular services
  • Two (2) of the settlements addressed improper imposition of preauthorization requirements for MAT.

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 – State Requires Kaiser Permanente to Enter into a Corrective Action Plan to Ensure Parity Compliance with Potential Fines (July 2017)

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 – State Assesses over $550,000 in Fines against Four Health Plans for Parity Violations (March 2017)

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).