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Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

New York Reaches Settlement with Insurer for Parity Violations

March 27, 2014 | Parity | Comments
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New York Attorney General Eric T. Schneiderman last week announced a settlement with a health insurance company based on its violations of state and federal parity law. This settlement is groundbreaking because it is one of the first to be reached under the 2008 parity law, which prohibited insurance plans from placing restrictions on behavioral health coverage that are more stringent than those placed upon medical/surgical coverage.

The Attorney General’s Health Care Bureau investigation found that MVP Health Care, through its behavioral health subcontractor Value Options, violated the parity law by issuing 40 percent more denials of coverage for behavioral health cases than medical/surgical cases, particularly at more intensive levels of care, where denials for benefits like inpatient substance use treatment and inpatient psychiatric treatment were more than double the plan’s denial rate for inpatient medical claims.

The settlement includes a $300,000 civil penalty, required review of certain previously denied claims, which could lead to more than $6 million in reimbursements to plan members, and an overhaul of the insurer’s claims review process. Last week’s announcement follows the Attorney General’s announcement in January of a settlement with Cigna for violations of the state and federal parity laws.

More details about the settlement between the New York Attorney General’s office and MVP Health Care are available here.