New York City-based health insurer Emblem Health has agreed to pay a $1.2 million civil penalty and reimburse its members up to $31 million for mental health claims that were wrongfully denied, according to the New York Attorney General.
The settlement comes after an investigation by the Attorney Generals Health Care Bureau revealed widespread violations of the mental health parity law by Emblem.
The parity law requires insurers to provide mental health coverage at least equal to coverage provided for other health conditions. The law also prohibits health plans from imposing greater financial requirements or treatment limitations on mental health or substance use disorder benefits than on medical or surgical benefits.
The investigation found Emblem, through its behavioral health subcontractor, Value Options, had issued 64 percent more denials of coverage in behavioral health cases than in medical cases since 2011. Emblem denied 36 percent of its members' claims for inpatient psychiatric treatment and 41 percent of its members' claims for inpatient substance abuse treatment, according to the report.
Under the settlement agreement, Emblem is required to reform its behavioral health claims review process, provide coverage for residential treatment and charge a lower co-payment for outpatient visits to mental health and substance abuse treatment providers.
The settlement also requires Emblem to submit previously denied mental health and substance abuse treatment claims for independent review. In total, this could result in more than $31 million in reimbursement to more than 15,000 Emblem members, according to the report.
Other health plans have also recently faced scrutiny concerning their mental health coverage. In May, a class-action lawsuit was filed against United Healthcare alleging the company acted in violation of the mental health parity law by improperly denying mental health and substance-abuse related claims.
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