AG: BlueShield illegally denied claims for mental, nutritional counseling
August 23, 2016
As published in the Albany Times Union on August 21,2016.
BlueShield of Northeastern New York and two sister organizations wrongfully denied $1.6 million in policyholders’ claims for psychotherapy and nutritional counseling, breaking state and federal laws that require insurers to cover mental health services on par with medical care, according to the office of state Attorney General Eric Schneiderman.
Under a settlement with the state, BlueShield parent HealthNow New York, based in Buffalo, will pay a $60,000 fine, reimburse members for thousands of wrongfully denied claims and revise its practices.
“Individuals confronting mental health conditions, eating disorders, or substance abuse should not be denied coverage for the treatment they need and deserve,” Schneiderman said.
In a statement, HealthNow said it would make changes to comply with the settlement and law.
“As an early leader and advocate for improving behavioral health and substance abuse awareness and treatment, HealthNow is committed to providing our members access to the most appropriate and effective treatment,” the company stated. “We now will be taking additional steps to ensure proper compliance with the complex mental health parity law moving forward.”
The health insurer operates in the Buffalo region as BlueCross BlueShield of Western New York and in the central part of the state under the HealthNow name. The company covers about 573,700 New Yorkers.
The Attorney General’s investigation of HealthNow, launched last year, was prompted by complaints from policyholders. They alleged HealthNow had improperly required all outpatient mental health visits be pre-authorized after the first 20 visits per year, though the same review was not required for outpatient medical treatment.
Policyholders with anorexia, bulimia and other eating disorders were denied coverage for nutritional counseling, though the counseling was covered for members with medical conditions like diabetes. The American Psychiatric Association and the National Eating Disorder Association consider nutritional counseling important in treating eating disorders, which can be fatal if not addressed.
The attorney general’s office found HealthNow conducted thousands of wrongful reviews in outpatient mental health cases, denying coverage for about 3,100 members. The 20-visit threshold prompting a review was not based on medical data.
The health insurer denied about 125 sessions of nutritional counseling to members with eating disorders, on the grounds that the service was not a covered benefit, according to the attorney general. Policyholders were wrongly charged a total of about $14,000 for nutritional counseling.
Under the terms of the settlement, HealthNow will cover nutritional counseling for eating disorders and eliminate thresholds exclusive to mental health reviews. Affected policyholders will be notified in coming weeks, the insurer said.
A decade-old state law known as Timothy’s Law requires mental health and substance abuse coverage to be on par with coverage for medical issues. A similar federal mental health parity law has been in effect since 2008.
Since 2014, the Attorney General’s Office has signed agreements with five other insurance companies, including Schenectady-based MVP Health Care, after determining they were not complying with the state and federal laws.