The fourth story in a series examining mental health parity.

By Yen Duong

An October report from a national advocacy project gave North Carolina an “F” when it comes to statutes on treating mental and physical health similarly.

Nonetheless, Jennifer Snow, the national director of public policy for the National Alliance on Mental Illness, said identifying a statewide problem is tricky.

“You can imagine for someone going through a mental health crisis, dealing with paperwork is not an easy thing to do at that moment,” said Snow. “It’s really hard for the insurance commissioners to assess how to appropriately enforce when they don’t see a huge number of complaints and there isn’t a consistent pattern of abuse.”

That’s borne out in the research. Harvard researchers found several 2014 insurance plans offered under the Affordable Care Act which blatantly broke the 2008 federal law requiring mental and physical health to be treated equally. A 2017 follow-up study analyzed lawsuits related to disparate treatment. Kelsey Berry, lead author of the studies, said customer complaints are crucial for regulators to find out about issues.

“Those… are in fact driving much of the enforcement landscape,” Berry said. “Taken together, they provide a picture of the ways in which consumers see their rights not being realized.

But David Lloyd, policy adviser for the Kennedy Forum, which runs the site that issued the failing grade, said states shouldn’t rely solely on complaints by families or patients in mental health or addiction crises to find a problem.

“If care is denied, that’s the most difficult point in their lives already,” Lloyd said. “Ideally we should do everything we can to make sure we never get to that point.”

Get Help:

The Kennedy Forum offers a step-by-step help guide for consumers who want to file appeals or complaints.

North Carolinians can file complaints related to parity online or by phone with the North Carolina Department of Insurance. Note: NC DOI is an NC Health News underwriter.

Hard to prove a negative

In North Carolina, people can reach out to the state insurance commissioner’s office if they suspect their case is a violation of mental health parity rules. From July 2016 to October 2018, 59 complaints came into the Department of Insurance, ranging from early patient discharges from rehab to difficulties getting medications.

“It’s not always a problem, it’s just people perceive that things should have been done differently,” said deputy commissioner Kathy Shortt.

Shortt said she has not identified a problem with parity violations in North Carolina.

Shortt suggested if they received several complaints about rehab patients requiring reviews every two days to continue treatment, it could raise suspicions.

“We would then make a referral to our market examiners who would look to see if the company complies with what the laws and their own policies say,” Shortt said. “It’s… a cycle where we all talk together amongst each other.”

The difference between a $20 physical health copay and a $30 behavioral health copay could be easy to spot, but much of the litigation that Berry, the Harvard researcher, found had to do with medical denials of services.

“It’s not entirely clear yet from the law how those ought to be treated,” said Berry, who noted courts are looking at this issue. She said regulators need to be clearer “about what the specific requirements of the law are and how to measure compliance.”


Lloyd, the policy analyst, said that instead of waiting for families to complain, state regulators should demand compliance reports before plans are even offered.

“Regulators have a responsibility to make sure health plans are compliant by really digging deep,” Lloyd said. “That’s a critical component that we don’t think many states have done well.”

“Blue Cross NC ensures parity by complying with all requirements,” emailed BCBSNC spokesperson Austin Vevurka. “An attestation that we have tested and comply (sic) is required as part of our filings for ACA benefit plans.”

Laurie Coker, executive director of NC CANSO, an advocacy organization, said that the state should also think about its uninsured population. Regulators need to reach out to people who are eligible for Medicaid but aren’t enrolled, she said.

“Even if we have our policy makes it to where we have better coverage for mental health, if it doesn’t ensure that everybody is having access to care, we still have a parity problem,” Coker said.

Another way to see a problem

Patients can appeal denied claims with their insurance company. If the company upholds the denial, patients can appeal a second time. If the insurance company upholds a second time, patients can appeal to the NC DOI for an external review.

Smart NC, a free program of the NC DOI that manages external reviews and assists patients with first- and second-level appeals, sends the paperwork to an independent reviewer for a final decision.

Smart NC began in 2002 and has returned over $15 million to consumers over almost 5,000 external review requests. The program used to report a large amount of annual data on their website until a law change in 2013 reduced reporting requirements.

“Of the cases we received, we accepted 2,587, or about 53 percent, [but in 2018], we’ve accepted 71 percent,” said Susan Nestor, an NC DOI deputy commissioner who runs Smart NC. “If it’s not a covered benefit or [a beneficiary is] not enrolled anymore or if it’s a self-funded plan or their plan is in South Carolina, it’s not eligible.”

A horizontal bar graph showing 12 reasons that external reviews were denied in 2013
Before 2013, Smart NC tracked the reasons for denials of external review requests. Table shows the number of cases (out of a total of 223) not accepted for review in 2013, and the reasons why. Figure credit: NC DOI.

Before 2013, Smart NC tracked the reasons for denials of external review requests. The table shows the number of cases (out of a total of 223) not accepted for review in 2013, and the reasons why. Figure credit: NC DOI

About half the time, external reviews overturn decisions in the consumer’s favor.

“I promise you that someday, you, a family member, your neighbor, your minister, your sorority sister, somebody is going to have a denial,” Nestor said. “What I want you to do is tell them that there is a division at the Department of Insurance that can help you with that sort of thing.”

But Scott Leshin, whose New Jersey company, SJ Health Insurance Advocates, which helps customers write health insurance appeals, was not as sanguine. He said reviewers may not be reading the entire clinical record, “or you’re briefing through it very quickly, because these things are 500, 1,000, sometimes 2,000 pages.”

This graph indicates how often different independent review organizations that the DOI has contracted between 2003 and 2013 overturned denied claims. In 2013, the DOI was instructed to stop keeping track of this information, but past reports are still available online. Graph credit: Yen Duong

The annual reports from 2003 to 2013 show that between five and 16 accepted external reviews a year related to inpatient mental health services. They don’t show how many requests relate to mental health.

“We’ve received a total of 4,833 cases total and when you look at that, compared to the number of people that are insured, and the number of denials, it’s really a drop in the bucket,” Nestor said.

But Leshin said it’s a problem that Smart NC has only accepted half of its cases over time and only overturned half of those accepted cases.

“The insurance companies are winning because even if they paid every single one of those 5,000 cases, they’re still ahead,” Leshin said. “They make the process so challenging and so convoluted and so you just give up.

“I have clients that say ‘hey, is it worth it?’ I say, ‘hell yeah, it’s worth it, this is your money, this is your life, it’s worth it. Let’s go fight these guys.’”

How can consumers get help?

Consumers can use private companies like Leshin’s for help filing appeals.

Mary Covington started Denials Management, Inc. in 1990 out of Salt Lake City after working in health insurance since 1970.

“I found that the insurance companies were not telling things correctly to families and denying claims that were valid,” Covington said. “I just thought there’s really a need for people to have someone that they could take their claim problems to.”

In the mental health arena, she said “the denials were more frequent, more outrageous, and people just didn’t know how to access their benefits.”

Back then, lifetime spending caps per patient still existed in insurance plans. Covington said after the Affordable Care Act banned those limits, she saw a change in the numbers of denied claims.

“Insurance companies were actually taking an opportunity to deny care because they had to put up with the unlimited benefit,” she said. “It’s like, ‘Okay, you want an unlimited benefit, we’re going to give it to you, but we’re going to deny more claims as not medically necessary.’”

Covington said her success rate has gone from 40 or 50 percent to 15 percent. She estimates she has reported 1,000 cases to the site run by the Kennedy Forum.

Leshin agrees that the success rate for overturning mental health denials has plummeted.

“These [independent review organizations] are not completely independent,” Leshin said. “It’s more profitable for them to work for the insurance companies.

“The insurance commissioner really doesn’t get it, or they simply don’t care. It’s either incompetence or indifference, it’s nothing else.”

Leshin, who founded his company in 2013, said the problem has gotten worse over time.

“I have a stack of hundreds upon hundreds upon hundreds of external appeals where I would tell families ‘You have a very strong case, odds are we’re going to win, obviously I can’t promise’,” Leshin, who works on contingency, said. “Now, unfortunately, while I’m still happy to do appeals, I have to tell families, ‘Look, you’re up against a rigged system’.”

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Yen Duong covers health care in Charlotte and the southern Piedmont for North Carolina Health News.