New York Attorney General Finds ValueOptions Denied Claims for Addiction Services at Four Times the Rate of Other Services, Reaches Settlement Including $900,000 Fine

March 5, 2015New York Attorney General Eric T. Schneiderman today announced a settlement with Beacon Health Options (formerly known as ValueOptions) for wrongly denying addiction and mental health benefits to millions of New Yorkers in violation of state and federal parity laws. The settlement requires ValueOptions—which administers behavioral health benefits to 2.7 million New Yorkers and 45 million Americans—to overhaul its claims review process and pay a $900,000 penalty. The settlement against ValueOptions is the fourth reached by AG Schneiderman’s Health Care Bureau since last year, making AG Schneiderman’s office a national leader in enforcing the federal parity law. Previously, his office settled with MVP Health Care, EmblemHealth, and Cigna for parity violations. ValueOptions administered behavioral health benefits for both MVP Health Care and EmblemHealth.

The Attorney General’s Health Care Bureau’s investigation found that ValueOptions denied mental health claims twice as often as other medical and surgical claims, and it denied addiction claims four times as often as other medical and surgical claims. ValueOptions violated state and federal parity laws that require insurers that provide mental health and substance use disorder benefits to provide them equally—or at parity—with other medical and surgical benefits. In its press release, the Attorney General noted that, although one in ten New Yorkers has a substance use disorder, only 11% of those individuals receive any treatment. Research has shown that the primary reason that people who seek substance use disorder treatment do not receive it is a lack of insurance coverage and inability to pay the cost.

The Legal Action Center worked successfully with the substance use disorder and mental health fields towards passage of the federal mental health and addiction parity law in 2008.  Furthermore, through our work co-leading the national Coalition for Whole Health, we have been instrumental in securing strong federal rules for covering substance use disorder and mental health treatment at parity with other health benefits in order to ensure that the law is implemented effectively.

For more details about the agreement between the Attorney General and Beacon Health Care/ ValueOptions, see the Attorney General’s press release. For more information about the AG’s previous settlements, the Legal Action Center’s summaries of the EmblemHealth settlement and the MVP Health Care settlement provide additional detail.  For additional information about the federal mental health and addiction parity law, see the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA)’s website, as well as the Legal Action Center’s Frequently Asked Questions and the tools developed by the Coalition for Whole Health. New Yorkers with questions or concerns about the settlement, the mental health and addiction parity laws, or any other health care matters can also call the New York Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.

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