HealthNow New York will pay $1.6 million in patient claims for outpatient psychotherapy and nutritional counseling for eating disorders under a settlement with State Attorney General Eric T. Schneiderman.
Schneiderman said Buffalo-based HealthNow, which does business locally as BlueCross BlueShield of Western New York, wrongfully denied thousands of claims for outpatient psychotherapy for about 3,100 members since 2012 and also 125 sessions of nutritional counseling for members with eating disorders.
The settlement calls for HealthNow to pay members for those claims, revise its policies, and eliminate a company policy that subjected all psychotherapy claims to review after a member’s 20th visit.
“Insurers have a legal obligation to provide the same level of care to patients being treated for behavioral health conditions as they do for patients with other ailments,” Schneiderman said in a statement. HealthNow will also pay a $60,000 civil penalty.
HealthNow said it “cooperated fully” with the attorney general’s investigation over the past 18 months.
“As an early leader and advocate for improving behavioral health and substance abuse awareness and treatment, HealthNow is committed to providing our members access to the most appropriate and effective treatment,” the company said in a statement.
HealthNow has agreed to eliminate utilization review for outpatient behavioral treatment based on set thresholds that trigger a review, such as – but not limited to – a 20-visit threshold it has applied since 2010.
The insurer will also cover nutritional counseling for eating disorders, including anorexia nervosa and bulimia nervosa.
The Attorney General’s Office said the 125 sessions of nutritional counseling to family members that were denied cost members about $14,000 for the treatments.
Schneiderman said the company covers nutritional counseling visits for medical conditions, such as patients with diabetes.
Schneiderman said his office began its investigation last year in response to complaints from consumers who contended HealthNow was requiring that all outpatient behavioral health visits be pre-authorized after the first 20 visits per year, and by excluding coverage for nutritional counseling for eating disorders.
HealthNow said it “will be taking additional steps to ensure proper compliance with the complex mental health parity law moving forward,” and will share details of the changes it will make with its impacted members.
A state law known as Timothy’s Law, which is similar to the federal mental health parity law, requires New York group health plans to provide “broad-based coverage for the diagnosis and treatment of mental, nervous or emotional disorders or ailments … at least equal to the coverage provided for other health conditions.”