NY attorney general settles with insurer to provide coverage

New York's attorney general has reached a settlement requiring a Buffalo-based insurer to pay thousands of improperly denied claims for outpatient psychotherapy and about 125 claims for nutritional counseling for eating disorders.

Investigators found more than $1.6 million in wrongful insurance denials by HealthNow New York Inc., which covers more than 573,000 New Yorkers, according to the attorney general's office. The investigation followed consumer complaints last year.

Insurers have federal and state legal obligations to provide the same level of care for behavioral problems as they do for other ailments, Attorney General Eric Schneiderman said Sunday. "Individuals confronting mental health conditions, eating disorders or substance abuse should not be denied coverage for the treatment they need and deserve," he said.

In the settlement, HealthNow, without admitting or denying the findings, agreed to pay a $60,000 penalty, to stop requiring outpatient behavioral health visits to be preauthorized after 20 visits annually and to stop excluding nutritional counseling for eating disorders. It also agreed to notify more than 3,100 members that they can resubmit such unpaid claims since 2012.

The insurer said it cooperated with the investigation, has historically implemented policies to improve service delivery and was an early advocate of improving mental health and drug abuse treatment.

"We now will be taking additional steps to ensure proper compliance with the complex mental health parity law moving forward," spokesman Kyle Rogers said. "In the coming weeks, HealthNow will communicate these changes to our impacted members."

In May, the attorney general's office urged people denied insurance coverage for addiction treatment and mental illness to contact his office for help.

According to Schneiderman, New York's 2006 mental health parity law requires insurers to provide coverage for the diagnosis and treatment of mental health disorders at least equal to their coverage for other health conditions. Also, state insurance law also requires coverage consistent with the 2008 federal law that prohibits greater financial requirements and treatment limitations for mental health than for medical or surgical benefits.

Over the previous two years, the office signed agreements with the insurers Cigna, MVP, EmblemHealth, ValueOptions/Beacon and Excellus that were intended to bring them into compliance with the laws.

It has other ongoing insurance investigations, spokesman Doug Cohen said. He said he couldn't discuss specifics.