July 9, 2014 – New York Attorney General Eric T. Schneiderman today announced a settlement with EmblemHealth for wrongly denying addiction and mental health treatment to thousands of New Yorkers in violation of state and federal parity laws. The settlement includes a $1.2 million penalty, required review of certain previously denied claims, which could lead to more than $31 million in reimbursements to plan members, and an overhaul of the insurer’s claims review process. The settlement against EmblemHealth comes on the heels of the Attorney General’s March 2014 settlement with MVP Health Care for similar violations, as well as a January 2014 settlement against Cigna for wrongfully denying mental health benefits, making the Attorney General Schneiderman’s office a national leader in enforcing addiction and mental health parity laws. The Legal Action Center commends the Attorney General for holding insurers accountable under the parity laws, and protecting the rights of New Yorkers who suffer from mental health and substance use disorders.
An investigation by the Attorney General’s Health Care Bureau determined that EmblemHealth, through its behavioral health subcontractor Value Options, violated state and federal laws requiring covered health insurers to provide mental health and addiction benefits equally, or at “parity,” with medical and surgical benefits. Value Options was also the behavioral health subcontractor for MVP Health Care during the period that the Attorney General found MVP to have violated the parity laws. The investigation found that EmblemHealth and Value Options issued 64% more denials of coverage in behavioral health cases than in medical cases. This disparity was particularly egregious at more intensive levels of care. For example, EmblemHealth denied 41% of its members’ claims for inpatient addiction treatment. 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 EmblemHealth, see the Attorney General’s press releaseand the settlement agreement. For additional information about the federal mental health and addiction parity law, check out the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA)’s website, as well as the Legal Action Center’sFrequently 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.