New York Attorney General Eric T. Schneiderman on Wednesday is set to announce a settlement with EmblemHealth Inc. that requires the health-insurance company to change the way that it deals with behavioral-health and substance-abuse claims, his office said.
The attorney general’s office said its investigation found that since at least 2011, EmblemHealth, through a subcontractor, issued 64% more denials of coverage in behavioral-health cases than in medical cases.
The New York-based insurance company, which has more than 3 million members, will be fined $1.2 million.
EmblemHealth also must cover health care at residential-treatment centers and charge lower copayments for outpatient treatment at mental-health and substance-abuse treatment centers.
In addition, the insurer will be required to submit previously denied mental-health and substance-abuse-treatment claims for independent review—and potential reimbursement to patients. The restitution could total $31 million or more, according to Mr. Schneiderman’s office.
“Insurers … must treat people with mental-health and substance-abuse conditions as they do those with medical conditions,” Mr. Schneiderman said in a statement, citing mental-health parity laws.
“My office will make sure that everyone, including big insurance companies, play by the rules,” Mr. Schneiderman said.
EmblemHealth doesn’t admit nor deny any violations of law in this settlement.
A spokesman for the company said it “understands the importance of providing access to quality behavioral services. We are working with the attorney general … to … improve the management of behavioral services. Policies and procedures dealing with the issues … have been put in place, as well as enhanced compliance oversight.”
A New York law known as Timothy’s Law, enacted in 2006, requires insurers to cover mental-health treatments and treatments for other health conditions comparably.
Mr. Schneiderman has said his office is conducting a continuing investigation into health-insurance companies’ compliance with the law. The EmblemHealth settlement is the third such agreement reached by Mr. Schneiderman’s office this year.
“So far it seems like a successful initiative,” said Abbe Gluck, a professor at Yale Law School focused on health law.
Ms. Gluck, a former senior adviser to the New Jersey attorney general, said Mr. Schneiderman’s investigation could have broad impacts.
“State attorneys general often can help to set a national agenda…by aggressively enforcing a state law” that is parallel to a federal law, she said. The attorneys general can “sometimes step in to fill important gaps that the feds do not have the resources to fill themselves.”
The agreement is “absolutely terrific,” said Elizabeth Berardi, founder of the nonprofit Safe Sober Living, which advocates for people with substance-abuse issues. “If they can set a precedent in New York, and other states follow,” she said, “that will save lives.”
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