ALBANY, N.Y.—After a state attorney general investigation revealed that health insurer EmblemHealth Inc. had been denying mental health and substance abuse treatment to thousands of its New York members, the company will now have to pay a penalty of $1.2 million.
The investigation found that since at least 2011, EmblemHealth had issued 64 percent more denials for behavioral health cases than medical cases. The company also failed to cover residential treatment for behavioral health conditions before this year.
Attorney General Eric T. Schneiderman’s office announced on Wednesday that the company agreed to a settlement requiring it to submit its denied claims from 2011 to the present for independent review and reimburse residential treatment costs, which can amount to more than $31 million in reclaimed funds for more than 15,000 members.
“Our mental health parity laws were enacted to ensure that New Yorkers have adequate access to mental health and substance abuse treatment,” Schneiderman said in a press statement. “Insurers must comply with the laws—and they must treat people with mental health and substance abuse conditions as they do those with medical conditions.”
In 2006, New York state passed Timothy’s Law, which requires that insurers provide equal coverage for mental health as for other medical conditions.
EmblemHealth operates within New York state, with a total of 3.4 million members. The company previously denied coverage of rehab treatment for people suffering from substance abuse, on the basis that they had not failed at an outpatient program recently, or that they had not suffered from a “life-threatening” case of withdrawal.
Under the attorney general’s settlement, the company agreed to eliminating these limitations and covering residential treatment for all behavioral health conditions. EmblemHealth will also charge members primary care co-pays for their outpatient treatment, instead of charging the higher specialist copay price.