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October 2013
NEW YORK STATE OFFICE
ATTORNEY
GENERAL
of the
Health Care Bureau
Mental Health Parity:
Enforcement by the New York State Oce of the Attorney General
MAY
2018
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Mental Health Parity:
Enforcement by the New York State Ofce of the Attorney General
New York state and federal law require that health insurance plans cover mental health and
substance use disorder treatment the same way they cover all other medical treatment, ensuring “parity”
between the coverage of mental health or substance use disorder and physical illness. In keeping with
that mandate, the New York State Ofce of the Attorney General (“NYAG”) has been deeply committed
to ensuring that all New Yorkers have access to behavioral health services, including substance abuse
treatment. To that end, in early 2013, the NYAG – based on a growing number of consumer complaints
-- began an industry-wide investigation of health plans’ compliance with state and federal mental health
and addiction parity laws.
This report summarizes the results to date of the NYAG’s industry-wide initiative, including
the enforcement of eight agreements with seven health plans. Four of the settlements required plans
to implement sweeping reforms in their administration of behavioral health benets, in particular
relating to medical management practices, coverage of residential treatment, and co-pays for
outpatient treatment, and to submit regular compliance reports. Two of the settlements focused on
coverage of particular services, and two more addressed the improper imposition of preauthorization
requirements for medication-assisted treatment (“MAT”). Over the past ve years, the NYAG has
vigilantly monitored the health plans’ compliance with these agreements, and the results, presented
in this report, illustrate the degree to which these agreements have contributed to the transformation
of plans’ approach to behavioral health services. Some highlights include:
Plans are imposing fewer barriers to necessary mental health treatment:
Covering the continuum of care, including residential treatment.
More consumers are able to access needed mental health care.
Plans are denying care at a lower frequency than in previous years.
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 million in penalties.
Plans are letting providers prescribe – without preauthorization – medication-assisted
treatment for patients suffering with substance abuse disorder.
The positive trends the NYAG has observed through its monitoring of these agreements has
been reected in other arenas as well. The NYAG’s Health Care Bureau Helpline (“HCB Helpline”) is
a toll-free telephone line staffed by intake specialists and advocates trained to assist New York health
care consumers in a range of complaints, including mediation of disputes to help protect their right
to behavioral health services. Since 2014 the number of consumer complaints to the HCB Helpline
regarding mental health and substance abuse issues diminished by nearly 60%. We strongly believe
that health plans’ compliance with the agreements described herein has resulted in increased access
to behavioral health services, and therefore fewer consumer complaints. Moreover, over the past
ve years the HCB Helpline has provided individual resolutions for many New Yorkers that resulted
in their accessing critical mental health and substance abuse services. For instance, a HealthNow
member who had struggled with opioid addiction for years, was denied coverage for services from
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an out-of-network psychiatrist. After intervention from a Helpline advocate, HealthNow agreed to
process claims at the in-network rate. Similarly, through intervention of a Helpline advocate, a Cigna
member was able to get in-patient psychiatric treatment covered by the health plan, after initially
being denied. These are just a few examples of the many resolutions achieved on behalf of New York
healthcare consumers.
A. Background
Timothy’s Law mandates that New York group health plans that provide coverage for inpatient
hospital care or physician services must also provide “broad-based coverage for the diagnosis and
treatment of mental, nervous or emotional disorders or ailments, . . . at least equal to the coverage
provided for other health conditions.” (emphasis added).
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Further, all group plans must cover, annually,
a minimum of 30 days of inpatient care, 20 visits of outpatient care, and up to 60 visits of partial
hospitalization treatment for the diagnosis and treatment of mental, nervous or emotional disorders
or ailments.
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Timothy’s Law also requires that deductibles, copayments and co-insurance for mental
health treatment be consistent with those imposed on other benets,
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and that utilization review for
mental health benets be applied “in a consistent fashion to all services covered by [health insurance
and health maintenance organization] contracts.”
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Finally, New York law requires health plans to cover
inpatient and outpatient treatment for substance use disorder (“SUD”), and to do so consistent with the
federal Mental Health Parity and Addiction Equity Act (the “Federal Parity Act”).
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The Federal Parity Act prohibits large group, individual, and Medicaid health plans that
provide both medical/surgical benets and mental health or SUD benets, from: (i) imposing nancial
requirements (such as deductibles, copayments, co-insurance, and out-of-pocket expenses) on mental
health or SUD benets that are more restrictive than the predominant level of nancial requirements
applied to substantially all medical/surgical benets; (ii) imposing treatment limitations (such as
limits on the frequency of treatment, number of visits, and other limits on the scope or duration of
treatment) on mental health or SUD treatment that are more restrictive than the predominant treatment
limitations applied to substantially all medical/surgical benets, or applicable only with respect to
mental health or SUD benets; and (iii) conducting medical necessity review for mental health or
SUD benets using processes, strategies or standards that are not comparable to, or are applied more
stringently than, those applied to medical necessity review for medical/surgical benets.
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1 N.Y. Ins. Law §§ 3221(l)(5)(A); 4303(g)(1).
2 N.Y. Ins. Law §§ 3221(l)(5)(A)(i)&(ii); 4303(g)(1)(A)&(B).
3 N.Y. Ins. Law §§ 3221(l)(5)(A)(iii); 4303(g)(1)(C).
4 2006 N.Y. Laws Ch. 748, § 1.
5 N.Y. Ins. Law §§ 3221(l)(7)(A); 4303(l)(1); and 3216(i)(31).
6 42 U.S.C. § 300gg-26; 45 C.F.R. § 146.136(c)(4)(i). The essential health benet regulations under the Affordable
Care Act extend the Federal Parity Act’s requirements to small and individual plans. 45 C.F.R. § 156.115(a)(3).
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B. Investigations and Agreements by the New York Attorney General’s Ofce
The NYAG launched our mental health parity initiative after receiving many complaints
regarding health plans’ coverage of behavioral health treatment.
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The complaints fell into three
categories: (1) plans were conducting frequent and stringent utilization review for behavioral
health treatment, resulting in unwarranted medical necessity denials; (2) plans were excluding
coverage of residential treatment for behavioral health conditions, while covering skilled nursing
care, which is the equivalent level of care for medical/surgical conditions; and (3) plans charged
consumers higher copayments for behavioral health treatment than for primary care medical visits.
Based on an abundance of consumer complaints, in 2013 the NYAG initiated investigations
of MVP, EmblemHealth (“EmblemHealth” or “Emblem”), Excellus, Beacon Health Options
(formerly ValueOptions), and Cigna, and in 2015, we initiated an investigation of HealthNow. The
results of our investigations are as follows:
1. MVP: The NYAG determined that MVP violated the parity laws by imposing
stricter utilization review for behavioral health services than medical services
(evidenced in part by much higher denial rates for inpatient behavioral health treatment
than for inpatient medical/surgical treatment), excluding residential treatment, and
charging higher copays for behavioral health services than for medical services. In
March 2014, the NYAG entered into an agreement with MVP, which required them
to: (i) cover residential treatment; (ii) overhaul its behavioral health utilization review
processes (including by providing detailed denial letters); (iii) charge the same co-
pays for most outpatient behavioral health visits as for primary care visits; (iv) pay
a penalty of $300,000; (v) appoint an internal compliance monitor that will submit
quarterly compliance reports for a minimum of two years; and (vi) provide members
who received medical necessity denials over a four-year period with an opportunity to
le appeals, to be decided by an independent entity.
2. EmblemHealth: The NYAG determined that EmblemHealth violated the
parity laws by imposing stricter utilization review for behavioral health services than
medical services (evidenced in part by much higher denial rates for inpatient behavioral
health treatment than for inpatient medical/surgical treatment), excluding residential
treatment, and charging higher copays for behavioral health services than for medical
services. In July 2014, the NYAG entered into an agreement with EmblemHealth,
similar to the MVP agreement, which required Emblem to: (i) cover residential
treatment; (ii) overhaul its behavioral health utilization review processes (including
by providing detailed denial letters); (iii) charge the same co-pays for most outpatient
behavioral health visits as for primary care visits; (iv) pay a penalty of $1.2 million; (v)
submit to monitoring by an outside entity that issues quarterly compliance reports for
7 In 2011, the HCB handled almost 60 substantive complaints relating to insurance coverage of mental health/
substance use disorder treatment. In 2012, the HCB handled almost 100 such complaints.
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a minimum of two years; and (vi) provide members who received medical necessity
denials over a four-year period with an opportunity to le appeals, to be decided by an
independent entity.
3. Beacon Health Options (formerly known as ValueOptions): The NYAG
determined that Beacon Health Options, which administers behavioral health benets
for MVP and Emblem, as well as the Empire Plan, violated the mental health parity
laws for the reasons set forth above in the summaries of the MVP and EmblemHealth
settlements. In March of 2015, the NYAG entered into an agreement with Beacon,
which requires the insurer to: (i) abide by the terms of the MVP and EmblemHealth
agreements; (ii) cooperate with the compliance administrators for the MVP and
EmblemHealth agreements; (iii) comply with additional terms, such as stopping its
practice of discounting psychotherapy rendered by non-physician providers; (iv)
appoint an external claims administrator for the EmblemHealth parity agreement
appeal process; and (v) pay a $900,000 penalty.
4. Excellus: The NYAG determined that Excellus violated the parity laws
by imposing stricter utilization review for inpatient SUD health services than medical
services (evidenced in part by the imposition of “fail rst” requirements for inpatient
SUD rehabilitation treatment and much higher denial rates for that service than for
inpatient medical/surgical treatment), excluding residential treatment for behavioral
health conditions, and charging higher copays for behavioral health services than
for medical services. In March of 2015, the NYAG entered into an agreement with
Excellus, requiring them to: (i) eliminate the fail rst requirements for inpatient SUD
rehabilitation services; (ii) cover residential treatment for behavioral health conditions;
(iii) charge the primary care copay for behavioral health visits for most of its plans;
(iv) provide members who received medical necessity denials for inpatient SUD
treatment over a four-year period with an opportunity to le appeals, to be decided
by an independent entity; (v) appoint an internal compliance monitor that will submit
quarterly compliance reports for a minimum of two years; and (vi) pay a penalty of
$500,000.
5. HealthNow: The NYAG determined that HealthNow violated the parity
laws by: (1) excluding coverage for nutritional counseling for eating disorders while
covering this treatment for medical conditions such as diabetes and morbid obesity; and
(2) requiring prior authorization for outpatient psychotherapy after members exceeded
20 visits, but not imposing a similar requirement for medical treatment. In August of
2016, the NYAG entered into an agreement with HealthNow, which requires the insurer
to cover nutritional counseling for eating disorders and to remove its 20-visit threshold
for reviewing outpatient behavioral health treatment. HealthNow will also reimburse
individuals who received denials due to the nutritional counseling exclusion and the
20-visit threshold, and paid out of pocket for the treatment.
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6. Cigna: The NYAG determined that Cigna violated mental health parity
laws by applying a limit of three visits to a nutritional counselor per year for mental
health conditions, but not for medical conditions. In January of 2014, the NYAG
entered into an agreement with Cigna, which required them to eliminate the three-visit
limit for mental health conditions, provide restitution to the members whose nutritional
counseling claims were denied due to the limit, and pay a $23,000 penalty.
• Medication-Assisted Treatment (“MAT”): Over the last several years,
the NYAG has received complaints that some health plans were restricting
coverage of MAT for opioid use disorder (such as Suboxone) by requiring
prior authorization for such drugs, and that plans’ authorized provider
networks are limited, such that people addicted to opioids must wait a long
time before they can access this treatment. The NYAG’s response to these
complaints is reected in the below agreements with Cigna and Anthem.
7. Cigna: In October of 2016, the NYAG entered into a second resolution
with Cigna, in which the insurer agreed to remove prior authorization for MAT drugs
for its non-federal beneciaries, nationwide (including for self-insured plans). The
pioneering agreement removed barriers to MAT medication for members in need of
drug treatment.
8. Anthem: In January of 2017, Anthem/Empire Blue Cross Blue Shield
(“Empire BCBS”) executed an agreement in which the health insurer agreed to remove
prior authorization for MAT drugs nationally, including self-funded plans. In addition,
Empire BCBS agreed not to require authorization for injectable naltrexone in New
York. Empire BCBS also agreed to launch a MAT initiative to increase its network
provider base capacity to provide MAT to its members.
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C. Effects of NYAG’s Enforcement of Parity Laws
1. MVP: The plan is compliant with the prospective measures of the agreement. MVP
reimbursed 101 members a total of $645,000 for their out-of-pocket costs for previously denied
treatment. MVP reports that spending and utilization for behavioral health increased since 2014. In
its most recent report submitted in May of 2017, MVP reported that, in contrast to earlier periods (in
particular, in the “pre-agreement” rst quarter of 2014), denial rates are declining, as follows:
2. EmblemHealth: The plan is compliant with the prospective measures of the agreement.
EmblemHealth reimbursed 131 members a total of $782,000 for their out-of-pocket costs for
previously denied treatment. Emblem’s denial letters show greater specicity and the review
process has produced more accurate results. As of a report issued in April of 2017, there were
positive trends, which have continued. In that report, a much lower percentage of Emblem’s
denials were reported to be “inappropriate” (only 28%, versus 62% in the prior reporting period).
In particular, Emblem’s denial rates in 2017 were much lower than in prior years, which is quite
positive:
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3. Excellus: The plan is compliant with the prospective measures of the agreement. The
NYAG has worked with Excellus to ensure greater specicity in their denial letters and to address
their high denial rates for more intensive levels of SUD care. In June 2016, the NYAG began to
require that Excellus: (1) automatically approve coverage of SUD inpatient detoxication, inpatient
rehabilitation and residential treatment in New York facilities for members with moderate or severe
opioid use disorder (“automatic approval process”); (2) use criteria issued by the New York State
Ofce of Alcoholism and Substance Abuse Services; (3) further improve their utilization review
procedures; and (4) exercise greater quality control over their denial letters. The “auto approval”
policy has resulted in a marked decrease in the denial rate for more intensive SUD services. In its
most recent compliance report, supplied in March of 2018, Excellus reported that its denial rates
for more intensive levels of SUD treatment have declined to almost zero, as shown by these charts
from the report:
In the fourth quarter of 2016, Excellus approved more than 650 episodes of care under the automatic
approval process set forth in the amendment to the agreement. As shown in the following tables,
that positive trend has continued through 2017:
While Excellus’ mental health residential treatment denial rate remains high, the below table
demonstrates that progress has been made in this area as well:
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4. Beacon Health Options: The company has been compliant with the prospective
measures of the agreement with the NYAG. In 2016, Beacon conrmed that it:
• will no longer manage outpatient behavioral health benets in New York
using set thresholds for reviewing cases (i.e., it has eliminated the “outpatient
outlier model” in New York).
• is covering treatment pending decisions on internal appeal for all levels of
care.
• removed an element of its provider rating program that evaluated providers
based on their level of agreement with Beacon’s review decisions.
• removed its prior authorization requirements for medication-assisted
treatment for opioid use disorder.
• revised its residential treatment medical necessity criteria to not require
imminent danger, to self/others. In response to a complaint prior to these
revisions, Beacon reported that it will reimburse 15 members a total of
$250,000 for inappropriate denials of coverage for residential treatment, and
will retrain its staff on the criteria.
• is tracking modications (days requested by providers vs. days approved).
• has removed preauthorization requirements for MAT on their end.
5. HealthNow: The plan has implemented the terms of the agreement with the NYAG
and sent notice to members regarding their ability to le new claims for previously improperly
denied behavioral health services.
6. Cigna: The plan removed the visit limit for nutritional counseling for mental health
conditions and paid a total of $29,000 in reimbursement to a total of 52 members for previously
denied claims.
MAT: In an effort to expand its network of MAT providers, and pursuant to an agreement with the
NYAG, Empire BCBS launched an initiative to identify in-network MAT providers, and post the
names of these providers on its website. As a result of this effort, members are now able to search
for a MAT-authorized provider in the Empire BCBS directory and on its public website. Empire
BCBS continues its efforts to expand its network of MAT-certied providers.
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RESTITUTION IN MENTAL HEALTH PARITY SETTLEMENTS
In addition to changing the landscape for member access to critical mental health services going
forward, a hallmark of the mental health parity agreements has been that health plans reimburse
members for out of pocket expenses for behavioral health services that should have been covered
by the health plan. In this regard, the NYAG efforts have reaped very tangible benets for nearly
500 members – totaling over $2 million in restitution.
TOTAL RESTITUTION Members Dollars
Cigna 52 $28,908
MVP 93 $652,377
Emblem 127 $801,094
Excellus 31 $236,347
Beacon 15 $254,656
HealthNow 179 $62,852
497 $2,036,234
D. Other Efforts
The NYAG continues to actively monitor health plans’ compliance with mental health
and addiction parity laws, and has undertaken substantial outreach with consumers, providers,
and health plans to provide information about the laws and our enforcement work. In addition,
the NYAG HCB Helpline continues to help individual consumers gain access to much needed
behavioral health services.
New York Ofce of the Attorney General | www.ag.ny.gov | 1-800-771-7755
