Schenectady-based MVP Health Care has agreed to overhaul its mental health claims process and submit thousands of previously denied claims for independent review, the state Attorney General’s Office announced Thursday.
The agreement came in the form of a settlement after the office of Attorney General Eric T. Schneiderman found “widespread violations of mental health parity laws” by the company.
Those took the form of 40 percent more denials in behavioral health cases than other cases.
Insurers in New York have been required since 2006 to provide mental health coverage with at least equal coverage as other health conditions, according to the Attorney General’s Office.
“Insurers must comply with the law to ensure that individuals with mental health conditions are treated no differently than those with physical ailments — and that they are getting what they pay for from insurers,” Schneiderman said in a news release Thursday. “With this settlement, MVP Health Care commits to greatly improving treatment services available to thousands of New Yorkers.”
The requirements came with the passage of “Timothy’s Law,” named for 12-year-old Timothy O’Clair, of Rotterdam, whose struggle with mental illness ended in suicide in 2001.
Denise Gonick, president and CEO of MVP, issued her own statement, saying the company “agrees that access to quality care is essential, and that such access is critical to our goal of building healthier communities.”
“We at MVP care deeply about the communities we serve, and we will continue to strive to offer high quality services that promote the health and well-being of all our members,” Gonick said in the statement.
Included in the settlement are requirements for MVP to reform its claims review process, cover residential treatment and charge lower primary care co-payments for outpatient visits to most mental health and substance abuse treatment providers, according to the Attorney General’s Office.
Previously denied mental health claims submitted from Jan. 1, 2011, to March 10 of this year also must be sent for independent review. That could result in more than $6 million being returned to members, according to the Attorney General’s Office.
The Attorney General’s Health Care Bureau investigation found that MVP, through its subcontractor Value Options, issued a disproportionate number of denials for behavioral health service claims.
Since MVP outsourced behavioral health condition benefit administration to Value Options in 2009, the attorney general found, behavioral health care claims were scrutinized more rigorously than medical or surgical claims. Denial rates were more than double the denial rates of inpatient medical claims.
Glenn Liebman, CEO of the Mental Health Association in New York State, on Thursday applauded the efforts of the Attorney General’s Office in checking insurers’ compliance with the mental health parity laws.
“We think this is a great step forward,” Liebman said.
Liebman said he hopes the action will help end any other plans that may be out there violating mental health parity laws.
The Mental Health Association works with its 30 affiliates around the state to provide mental health services. In Albany, it works on advocacy, training and anti-stigma efforts.
“We’re very pleased that the attorney general is being so mindful of the process and paying real attention,” Liebman said.
The settlement is the second such settlement the Attorney General’s Office has reached this year with an insurer. Cigna Corporation reached a similar agreement in January.
In the MVP investigation, the AG’s office found that MVP repeatedly denied coverage for the treatment of a young woman with a serious history of substance abuse. The denials came even as her providers had prescribed inpatient rehabilitation, residential and intensive outpatient treatment.
The result was the woman’s family was forced to pay $150,000 out of pocket for her treatment. They also were forced to spend time on a series of appeals.
In another case, investigators found that a member with a long history of heroin and prescription painkiller addiction requested coverage for inpatient substance abuse rehabilitation treatment. The plan rejected the claim, citing the wrong criteria, according to the Attorney General’s Office.
In another case, investigators found that a woman suffering from the life-threatening disorder anorexia nervosa was denied inpatient treatment, forcing her family to pay thousands of dollars out of pocket.
The settlement includes an agreement to cover residential treatment in such cases. MVP has also set aside $1.5 million to reimburse members’ past residential treatment claims that weren’t covered. An estimated 3,000 members may be eligible for reimbursement.
MVP has more than 500,000 members in the Capital Region, Central New York and the Hudson Valley.
Customers with questions or concerns about the settlement or other health care matters can call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.