The last in our series on mental health parity laws and enforcement in North Carolina, and beyond.
By Yen Duong
In 2018, the national advocacy project, Parity Track, gave North Carolina an “F” on how well its statutes guarantee that people with mental health issues get treatment equal to those who require physical health interventions. North Carolina was in good company; 32 other states also received failing grades on mental health parity.
But the nation as a whole has some bright spots when it comes to treating people with mental health issues equally.
North Carolina gets an “F” on how equally it treats mental and physical illness,
Mental health parity isn’t panning out for some patients and parents,
Mental Health providers struggle with disparities in the system,
Determining disparity in mental health treatment can be difficult
For instance, in May 2018, the New York Attorney General released a report from a five-year investigation into how insurers treat mental and behavioral health. Solutions New York started to implement in 2014 have resulted in a 60 percent drop in complaints and fewer denials.
“Access to mental health services, including substance abuse treatment, is critical to New Yorkers’ health and well being,” wrote then-Attorney General Barbara Underwood in an email. “Our office is committed to enforcing mental health parity laws to increase this access for all New Yorkers.”
Many complaints investigated
In 2018, the N.C. Department of Insurance fielded at least 50 complaints related to mental health and substance abuse parity, according to a file NCHN received as the result of a public records request.
By comparison, the New York report shows that state, two times the size of North Carolina, dealt with 60 parity complaints in 2011 and another 100 complaints in 2012, spurring an investigation.
In the New York report, Underwood cited insurance companies for several different violations, including:
- Higher denial rates for behavioral health and rehab than for medical or surgical treatments
- Requiring prior authorization for psychotherapy after 20 visits with no similar requirement for medical treatment
- High “fail first” requirements for rehab
- Charging higher copays for behavioral health than for primary care visits
- Limiting nutritional counseling visits for eating disorders, but covering it for diabetes and obesity
High denial rates and pre-authorizations
Seven insurance companies were cited for over-using utilization review, where employees of the insurance agency decide if a treatment is medically necessary.
Kathy Shortt, a deputy commissioner with N.C. Department of Insurance, said those types of  reviews are legitimate. For example, insurers may check on patients in physical rehab centers and stop paying for treatment once progress stops. But if they only apply such criteria to substance abuse rehab, they violate the federal Mental Health Parity and Addiction Equity Act, passed in 2008.
“If you need 30 days of substance abuse treatment, they don’t give you 30 days of substance abuse treatment,” said Scott Leshin, whose company SJ Health Insurance Advocates helps consumers write insurance appeals.
“You have to get authorization in the first 24 to 48 hours of admission. If you fail to do so, you could be denied and then when you get authorization, the authorization is for […] seven days at best. That in itself is a breach [of parity].”
Excluding residential treatment, non-quantifiable limits
Mary Covington, whose company Denials Management also helps with consumer insurance appeals, decried insurance companies’ use of strict criteria for greenlighting treatment. She said many patients who could benefit from treatment at residential treatment centers, wilderness programs, sober living houses or transitional living facilities are told that they need to be sicker in order to get their treatment approved.
“The insurance companies are measuring the medical necessity using the hospital criteria,” Covington said. “That’s where the violation occurs.”
“If a plan says you can only visit a doctor 10 times a year and you can only visit a mental health provider three times a year, that’s pretty easy [to identify],” seconded Jennifer Snow, national director of policy for the National Alliance on Mental Illness. But it’s harder to tell if there’s a problem with decisions about “the best therapy, or someone’s appropriateness on a prescription drug or some prior authorization requirements.”
Kelsey Berry, a Harvard Ph.D. candidate whose research has focused on lawsuits and marketplace plans violating parity, said that existing regulations don’t encompass all possible violations, which frustrates consumers, providers, insurers and regulators. Though many people are working on better standards, Berry said, “trying to create equity between two different things is a tall request.”
Fixing New York’s problems
In response to her office’s findings, Underwood imposed several conditions on health insurance plans in New York state. Insurers needed to:
- Rework utilization review procedures and send thorough explanations for denials
- Pay penalties ranging from $300,000 to $1.2 million
- File two years’ worth of quarterly reports for parity compliance
- Stop paying less to non-physician providers who do psychotherapy
- Allow all claimants who had been denied for the past four years to retroactively appeal their decisions
- Stop requiring prior authorization for medically assisted treatment for opioid addiction, such as Suboxone
In total, seven insurance companies paid $3 million in penalties and reimbursed customers $2 million for previously denied claims.
The solutions were successful in decreasing denials. For one insurer, denials for substance abuse rehabilitation went from 59 percent at the start of 2014 to 8 percent by the beginning of 2018.
The New York AG made another insurer “auto-approve” all treatment for substance abuse detox and rehab, bringing its denial rate down to almost zero. Two insurers then dropped prior authorization requirements for suboxone, a drug which helps treat opioid addiction, and implemented that policy nationally.
Large penalties may be an effective way to enforce parity, said patient advocate Leshin, but could be a double-edged sword in a place like North Carolina, where a large part of the state is covered by one insurer.
“If [an insurer] is denying $5 billion of claims and they have to pay a fine of $25,000 or $100,000 or whatever it is, that’s fine,” Leshin said. “Blue Cross isn’t going to go out of business. The state won’t penalize them to put them out of business, because then you’ll have millions out of insurance and then where do we go?”
Spokesperson Austin Vevurka wrote in an email that Blue Cross Blue Shield of NC has not had any governmental fines related to parity.
Accreditation, not investigations
Like New York, the Illinois Department of Insurance requires insurers to file statements of parity compliance with their plans. Illinois was the only state to get an “A” in the same report where North Carolina received an “F” rating.
David Lloyd, director of policy for the Kennedy Forum Illinois, said providers and patients have little way to know what’s really in their plan until they make a claim and get dinged by the insurance company. “We think unless there is more transparency, our progress is going to be limited,” he said.
Lloyd recommends that state regulators require insurers to file compliance analyses before plans are sold. Garry Carneal, whose company ClearHealth Quality Institute will start offering mental health parity accreditation to plans nationally this month, said a proactive approach will help avoid lawsuits and complaints.
“With the focus just on fining or suing health plans, that’s not really the best way to effectuate a public policy change,” Carneal said.
Insurers will pay Carneal’s company to help them analyze their plans for compliance on federal and state laws, and if they pass a review and an onsite visit, they’ll receive a two-year accreditation. That, Carneal hopes, would prove parity compliance before states bring the hammer down.
The accreditation holds no legal authority, but Carneal hopes state insurance departments will also start using his online tool to assess health plans.
Following other states’ footsteps
In a press release last month, Blue Cross NC announced an initiative to connect mental health care providers and primary care providers for better patient treatment.
“Blue Cross North Carolina fully supports the work of the Kennedy Forum to evaluate states’ performance on enforcing federal parity laws,” Vevurka wrote in an email. “Additionally, we are working closely with the Kennedy Forum to be a model health plan, ensuring adherence to parity and increasing transparency for our members and the general public.”
These changes could be useful in addressing North Carolina’s opioid epidemic, something state Attorney General Josh Stein said is one of his priorities.
Michelle Laws, a policy analyst with NAMI North Carolina, said when she was a legislative liaison for mental health and substance abuse services, she felt welcomed in a collaborative environment. But she said she felt the political climate has changed.
“When consumers and advocates are not at the table, then the perspective in terms of what is needed and how to move forward with creating equity, it looks different,” Laws said.
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I am curious to know if you spoke with anyone who served on the CHQI parity standards committee and the basis for our non support for the standards as they are currently drafted.