New York Regulations

The New York Department of financial services–which is responsible for regulating health insurance–issued a letter(pdf | Get Adobe® Reader®) to health plans informing them that the Department will be reviewing their use of quantitative treatment limitations and non-quantitative treatment limitations (NQTLs) for compliance with the Federal Parity Law and parity sections of state law (see the bottom of this page for a summary of those sections of state law). It also informed them that the Department will take “necessary action” if it finds examples of non-compliance.
The letter advised plans of a recent guidance(pdf | Get Adobe® Reader®) issued by the federal Departments of Labor and Health and Human Services that listed some examples of NQTL application that could be violations of the Federal Parity Law. That guidance highlighted the following NQTLs:

• Prior authorization
• Fail-first protocols
• Probability of improvement requirements
• Written treatment plan requirement
• Other requirements, such as patient non-compliance rules, residential treatment limits, geographical limitations, and licensure requirements

Settlement with Excellus Health Plan
(click here for Press Release)

Description:
Under Section 63(12) of the Executive Law and Article 22-A of the General Business Law, the New York Attorney General’s Office launched an investigation of Excellus Health Plan for parity violations, and reached a settlement with Excellus on March 11, 2015. Excellus Health Plan is part of the Blue Cross Blue Shield Association, and is based in Rochester, New York. Excellus is the largest health plan in upstate New York, serving 1.5 million members.
The investigation found that inpatient substance use disorder rehabilitation recovery services were denied seven times as often as inpatient medical services by Excellus. The investigation also found that Excellus was requiring its members to fail outpatient treatment multiple times before they could be covered for inpatient substance use disorder rehabilitation. This policy did not exist for physical health services covered by Excellus, and it conflicts with New York State guidelines. The investigation also found that some denials were arbitrary and wrongly decided. The standard contract with Excellus did not cover residential treatment for behavioral health conditions.
As part of the settlement, Excellus will now cover residential treatment, after a determination of medical necessity and in-network status. Lists of facilities at which members can receive residential treatment will be made available by Excellus. Excellus has also agreed to not impose preauthorization or concurrent review for routine behavioral health services, to cover partial hospitalization and intensive outpatient treatment, to remove the requirement of failing outpatient substance use disorder treatment before being able to access inpatient rehabilitation treatment, to share its behavioral health medical necessity criteria on a website, to use the primary care co-payment amount for all routine outpatient behavioral health services for standard individual and small group plans offered on the New York Health Benefit Exchange, to provide detailed explanations of denied claims, to employ Behavioral Health Advocates that can assist members with denials and appeals, to train to its staff on parity, to file compliance reports with the Attorney General, and to pay $500,000 in fees and costs.
Excellus will also notify the 3,300 members who were denied inpatient substance use disorder rehabilitation and residential treatment that they now have a right to appeal these decisions.
Summary:
The New York Attorney General’s Office launched an investigation of Excellus Health Plan for parity violations, and reached a settlement with Excellus on March 11, 2015. The settlement includes many changes that Excellus has agreed to make, as well as having to pay $500,000 in fees and costs.

Settlement with ValueOptions, now known as Beacon Health Options
(Click here for press release)
Description:
Under Section 63(12) of the Executive Law and Article 22-A of the General Business Law, the New York Attorney General’s Office launched an investigation of ValueOptions for parity violations, and reached a settlement with ValueOptions on March 4, 2015. ValueOptions is a managed care company that serves 45 million people across the country, and 2.7 million New Yorkers in fully funded or state and local government health plans. ValueOptions administers behavioral health benefits for MVP Health Care and EmblemHealth. The New York Attorney General’s Office launched investigations of MVP Health Care and EmblemHealth in 2014. Both investigations resulted in settlements.
The investigation found that mental health claims were denied almost twice as often as other medical claims by ValueOptions. The investigation also found that addiction recovery services claims were denied almost four times as often as other medical claims by ValueOptions. The investigation also found that utilization review for behavioral health services happened more often and was more rigorous than for other medical services.
As a result of this settlement, and the settlements with MVP Health Care and EmblemHealth, ValueOptions will make changes to improve its claims review process. Additionally, ValueOptions will now cover residential treatment as part of the settlement. ValueOptions will now charge the primary care co-payment for most behavioral health outpatient visits. ValueOptions has also agreed to remove visit limits for almost all behavioral health services, to remove preauthorization requirements for outpatient behavioral health services, to pay for services for various types of mental health practitioners, to ensure that reviews for services that require preauthorization are full and fair, to provide detailed explanations for denied claims, to remove the requirement that members “fail” outpatient substance use disorder treatment before being allowed to access inpatient rehabilitation treatment, to continue member coverage through the appeals process, to reimburse treatment for most diagnoses listed in the DSM, to file compliance reports with the Attorney General’s Office, and to pay a $900,000 penalty.
Members who were previously denied behavioral health services under MVP Health Care and EmblemHealth can now have their claims submitted for an appeal through an independent organization. Over 11,000 EmblemHealth members were notified of their appeal rights. Appeals for MVP Health Care members have already resulted in $250,000 being paid back to members who were denied services and paid out of pocket. It is estimated that between MVP Health Care appeals and EmblemHealth appeals, millions of dollars may be paid back to members who were denied services and paid out of pocket.
Summary:
The New York Attorney General’s Office launched an investigation of ValueOptions for parity violations, and reached a settlement with ValueOptions on March 4, 2015. The settlement includes many changes that ValueOptions has agreed to make, as well as a $900,000 penalty.

The New York Department of Financial Services–which is responsible for regulating health insurance–issued a letter(pdf | Get Adobe® Reader®) to health insurers. This letter made clear that insurance plans cannot deny to cover medically necessary services for gender dysphoria (pdf | Get Adobe® Reader®). The letter explained that state law and the Federal Parity Law require insurance plans to cover services for gender dysphoria.

Settlement with EmblemHealth
(Click here for press release)
Description:
Under Section 63(12) of the Executive Law and Article 22-A of the General Business Law, the New York Attorney General’s Office launched an investigation of EmblemHealth for parity violations, and reached a settlement with EmblemHealth on July 3, 2014. EmblemHealth is based in New York City and was created from a merger of Group Health Incorporated (GHI) and the Health Insurance Plan of Greater New York (HIP). EmblemHealth serves 3.4 million members through its GHI and HIP divisions.
The investigation found that through its behavioral health subcontractor, Value Options, EmblemHealth denied 64% more claims for behavioral health than it did for physical health. This practice had been occurring since at least 2011. The investigation also found that EmblemHealth inspected behavioral health claims more thoroughly than it did physical health claims. These practices resulted in thousands of EmblemHealth members not receiving coverage for care. Claims for more intensive levels of care were even more likely to be denied, with 36% of member claims for inpatient psychiatric treatment being denied and 41% of member claims for inpatient substance abuse treatment being denied. The investigation also found that EmblemHealth did not cover residential treatment for behavioral health conditions prior to 2014. Although EmblemHealth was not covering these services for behavioral health conditions, similar services were covered for physical health conditions. In one case, EmblemHealth denied coverage of residential treatment for a young woman with severe anorexia nervosa, and only agreed to cover her treatment after the involvement of the Attorney General’s Office. EmblemHealth also denied substance abuse rehabilitation claims stating that the member was not experiencing “life-threatening withdrawal.” EmblemHealth also used “fail first” requirements for coverage of substance abuse rehabilitation treatment.
As a result of this settlement, EmblemHealth will reform its behavioral health claims review process. EmblemHealth has also agreed to cover residential treatment for behavioral health conditions, including substance use disorders and eating disorders. EmblemHealth will charge the primary care co-payment for outpatient visits to mental health and substance abuse treatment providers. EmblemHealth will submit previously denied behavioral health claims for independent review. The independent review process could result in the reimbursement of over 15,000 members, possibly totaling over $31 million. EmblemHealth has also agreed to remove visit limits for almost all behavioral health services, to remove “fail first” requirements for inpatient rehabilitation treatment, to provide detailed explanations for denied claims, to continue member coverage through the appeals process, to notify members of their eligibility for independent review, and to employ behavioral health advocates that can assist members. EmblemHealth has also agreed to being monitored, filing an annual parity compliance report, and paying $1.2 million to the Attorney General’s Office as a civil penalty.
Summary:
The New York Attorney General’s Office launched an investigation of EmblemHealth for parity violations, and reached a settlement with EmblemHealth on July 3, 2014. The settlement includes changes to EmblemHealth’s behavioral health claims review process, as well as a $1.2 million penalty.

The New York Department of Financial Services–which is responsible for regulating health insurance–issued a letter(pdf | Get Adobe® Reader®) to health insurers. This letter clarified that the Affordable Care Act now requires any small employer plans or individual plans that offer essential health benefits to comply with the Federal Parity Law. The letter also explained some parts of the final regulation issued on the Federal Parity Law.

Settlement with MVP Health Care
(Click here for press release)
Description:
Under Section 63(12) of the Executive Law and Article 22-A of the General Business Law, the New York Attorney General’s Office launched an investigation of MVP Health Care for parity violations, and reached a settlement with MVP Health Care on March 19, 2014. MVP Health Care is based in Schenectady, and has more than 500,000 members in the Albany region, Central New York and the Hudson Valley.
The investigation found that through its behavioral health subcontractor, Value Options, MVP Health Care, denied 40% more claims for behavioral health than it did for physical health. This practice had been occurring since at least 2011. The investigation also found that MVP Health Care did not cover residential treatment for behavioral health conditions. Although MVP Health Care was not covering these services for behavioral health conditions, similar services were covered for physical health conditions. The investigation found that MVP Health Care inspected behavioral health claims more thoroughly than it did physical health claims. These practices resulted in thousands of MVP Health Care members not receiving coverage for care. Claims for more intensive levels of care were even more likely to be denied, with 39% of member claims for inpatient psychiatric treatment being denied and 47% of member claims for inpatient substance abuse treatment being denied. In one case, MVP Health Care repeatedly denied coverage of inpatient rehabilitation, residential treatment, and intensive outpatient treatment to a young woman with a serious substance use disorder. All of these services were prescribed by her providers. The young woman’s family spent a lot of time in appeals, and paid over $150,000 out of pocket for her treatment. In another case, inpatient substance abuse rehabilitation treatment was denied to a member with a long history of addiction to heroin and prescription painkillers. In another case, MVP Health Care denied coverage of residential treatment to a young woman with severe anorexia nervosa. The young woman’s family paid thousands of dollars out of pocket for her treatment.
As a result of this settlement, MVP Health Care will reform its behavioral health claims review process. MVP Health Care has also agreed to cover residential treatment for behavioral health conditions, including substance use disorders and eating disorders. EmblemHealth will charge the primary care co-payment for outpatient visits to mental health and substance abuse treatment providers. MVP Health Care will submit previously denied behavioral health claims for independent review. The independent review process could result in member reimbursement, possibly totaling over $6 million. MVP Health Care has also agreed to remove visit limits for almost all behavioral health services, to remove “fail first” requirements for inpatient rehabilitation treatment, to provide detailed explanations for denied claims, to continue member coverage through the appeals process, and to employ behavioral health advocates that can assist members. MVP Health Care has also agreed to being monitored and paying $300,000 to the Attorney General’s Office as a civil penalty.
Summary:
The New York Attorney General’s Office launched an investigation of MVP Health Care for parity violations, and reached a settlement with EmblemHealth on March 19, 2014. The settlement includes changes to MVP Health Care’s behavioral health claims review process, as well as a $300,000 penalty.

Settlement with Cigna
(Click here for press release)
Description:
Under Section 63(12) of the Executive Law and Article 22-A of the General Business Law, the New York Attorney General’s Office launched an investigation of Cigna for parity violations, and reached a settlement with Cigna on January 7, 2014. Cigna is made up of Connecticut General Life Insurance Company and the Cigna Health and Life Insurance Company, two for-profit corporations, that provide insurance coverage for 171,000 New Yorkers.
The investigation found that hundreds of claims for nutritional counseling for mental health conditions were wrongfully denied by Cigna. The investigation was initiated in response to a complaint from the family of a fourteen-year-old girl. Cigna rejected all but three of the girl’s claims for nutritional counseling that were part of her mental health treatment for anorexia nervosa. The family continued paying for treatment out of pocket, which cost them $2,400. The company had a three visit limit per calendar year. Since 2010, Cigna has denied over 300 sessions of nutritional counseling to about fifty of their members. These members paid $33,000 out of pocket to continue their necessary treatment. Although Cigna limited nutritional counseling for mental health conditions, Cigna did not limit nutritional counseling for physical health conditions, such as diabetes.
As a result of this settlement, Cigna will eliminate their three visit limit for nutritional counseling for mental health conditions. Additionally, Cigna will reprocess and pay hundreds of claims for nutritional counseling for mental health conditions. Cigna will also pay $23,000 to the New York Attorney General’s Office as a civil penalty.
Summary:
The New York Attorney General’s Office launched an investigation of Cigna for parity violations, and reached a settlement with Cigna on January 7, 2014. The settlement includes changes to service limitations that Cigna has agreed to make, as well as a $23,000 penalty.

The New York State Department of Health issued a letter(pdf | Get Adobe® Reader®) to Medicaid managed care organizations asking them to review their plans to make sure they complied with the Federal Parity Law. The letter made clear that quantitative treatment limitations and non-quantitative treatment limitations (NQTLs) for behavioral health services cannot be more restrictive than limitations in place for other medical services. The letter then listed some examples of NQTLs and one example of an NQTL parity violation. The letter also stated that the interim regulations released in 2010 required plans to disclose their criteria for medical necessity review to patients’ providers and that a written request is not needed to release this information.

The New York State Insurance Department–which is housed in the Department of Financial Services–issued a letter to insurers explaining parity requirements. This letter addressed both the state law and the Federal Parity Law. The letter briefly explained plans’ obligations related to copayments,coinsurance,deductibles,inpatient care,outpatient care, and partial hospitalization. The letter also explained that some plans that are considered small employer plans by New York State would actually be considered large employer plans by the Federal Parity Law. This was because the Federal Parity Law counts any employee while New York State only counts employees who receive health insurance from the employer.