NY Attorney General Finds Excellus Denied Claims for Inpatient Addiction Services at Seven Times the Rate of Other Services, Violating Parity Law

March 18, 2015New York Attorney General Eric T. Schneiderman today announced a settlement with Excellus Health Plan for wrongly denying addiction and mental health benefits to thousands of New Yorkers in violation of state and federal parity laws. The settlement requires Excellus—which is part of the Blue Cross Blue Shield Association and has 1.5 million members in upstate New York—to cover residential treatment for addiction and mental illness and overhaul its claims review process for these services. It also requires Excellus to provide notice of a new appeal right to 3,300 members whose claims for addiction and mental health services were previously denied. The new appeals could return up to $9 million to patients.

The Attorney General’s Health Care Bureau’s investigation found that Excellus denied claims for inpatient substance use disorder treatment seven times as often as claims for inpatient medical care. Excellus 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. According to the Attorney General’s press release, “many of Excellus’s denials were the result of its requirement that members fail outpatient treatment multiple times” before inpatient services would be covered. These “fail twice” policies are harmful to patients. They also violate New York guidelines and, in this case, parity laws since the requirements were not applied to other medical services.

The settlement against Excellus is the fifth 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 ValueOptions, MVP Health Care, EmblemHealth, and Cigna for parity violations.

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.  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 to ensure the law is implemented effectively.

For additional information about the federal mental health and addiction parity law, see Legal Action Center’s Frequently Asked Questions and the Coalition for Whole Health’s parity webpage or visit the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA) website. 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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