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The nation’s largest health care insurer has agreed to pay $16 million in restitution and penalties to consumers, the federal government, and the state of New York to settle complaints that it illegally limited outpatient psychotherapy.
The settlement resolves a joint U.S. Department of Labor and New York Attorney General investigation and lawsuit that found that United Healthcare and United Behavioral Health (UBH) had, since at least 2013, violated the federal Mental Health Parity and Addiction Equity Act of 2008.
United Healthcare and UBH are fighting similar claims in Wit v United Behavioral Health, which is currently on appeal at the U.S. Court of Appeals for the Ninth Circuit. If that complaint is decided against UBH, the insurer might have to reprocess more than 67,000 claims.
The joint New York–federal investigation determined that United Healthcare reduced reimbursement rates for out-of-network mental health services and denied payment for many services using its Algorithms for Effective Reporting and Treatment (ALERT) utilization review program.
All outpatient psychotherapy was subjected to review; by comparison, only a handful of medical and surgical services were. That violated parity laws, the New York Attorney General’s office said in a statement.
“United’s denial of these vital services was both unlawful and dangerous,” New York Attorney General Letitia James said in the statement.
“Protecting access to mental health and substance disorder treatment is a priority for the Department of Labor and something I believe in strongly as a person in long-term recovery,” U.S. Secretary of Labor Marty Walsh said in another statement.
Mr. Walsh added that the settlement “provides compensation for many people who were denied full benefits and equitable treatment.”
‘Investigations change behavior’
Commenting for this news organization, Joe Parks, MD, medical director of the National Council for Mental Wellbeing, applauded the settlement.
“These kinds of investigations change behavior, and people get better coverage,” Dr. Parks said.
He also applauded New York, saying that it “has been one of the more assertive states in expecting companies to comply with parity requirements. They should be emulated by other states.”
Dr. Parks noted that a 2019 U.S. Government Accountability Office report showed that only 20 states routinely conducted parity compliance reviews.
A spokesperson for the American Psychiatric Association said it was notable that the Department of Labor focused on three issues that it had not publicly investigated before.
These were payment parity, the use of algorithms in mental health to identify practitioners and patients who use more health care than expected of the “average” person, and requiring disclosure of how the insurer set rates, guidelines, and medical necessity standards.
The American Psychological Association’s chief of psychological practice, Jared L. Skillings, PhD, said the group was gratified that the Department of Labor and New York took complaints seriously and that it “is encouraged that United Behavioral Health and United Healthcare have agreed to change their unfair procedures regarding reimbursement and denial of psychological care.”
The association “will monitor implementation of the settlement with high hopes for fair treatment for patients with mental health needs,” Dr. Skillings said in an interview.
Across-the-board cuts for therapy
The investigation found that United Healthcare reduced the allowable reimbursement amount for all nonphysicians across the board for psychotherapy – by 25% for PhD-level psychologists and by 35% for all MA-level therapists.
The company’s ALERT system used arbitrary thresholds to trigger utilization review, which “often led to denials of coverage when providers could not justify continued treatment after 20 sessions,” said the New York attorney general.
Beneficiaries had to figure out how to pay for continuing services or abruptly end necessary treatment.
United Healthcare agreed to stop reducing reimbursement and to not employ a similar policy in New York for at least 2 years. It will stop using ALERT and stop issuing denials for psychotherapy through at least 2023.
In addition, “We are committed to ensuring all our members have access to care and to reimbursing providers consistent with the terms of the member’s health plan and state and federal rules,” United Healthcare said.
Dr. Parks noted that United Healthcare had stopped using ALERT long before the settlement and was instead employing Level of Care Utilization System for Psychiatric and Addiction Services (LOCUS) and American Society of Addiction Medicine criteria, which he called “a good step forward.”
‘Meaningful’ payout
United Healthcare will pay $14.3 million in restitution to consumers, including $9 million to 20,000 New Yorkers who received denials of or reductions in reimbursement. The company will also pay more than $2 million in penalties, with $1.3 million going to New York.
The insurer has annual revenues of some $250 billion.
“It’s not a large amount of money in United’s overall business operation,” said Dr. Parks.
However, “It certainly could be a meaningful amount of money for the individuals that didn’t get coverage that paid out of pocket,” he added.
A version of this article first appeared on Medscape.com.
The nation’s largest health care insurer has agreed to pay $16 million in restitution and penalties to consumers, the federal government, and the state of New York to settle complaints that it illegally limited outpatient psychotherapy.
The settlement resolves a joint U.S. Department of Labor and New York Attorney General investigation and lawsuit that found that United Healthcare and United Behavioral Health (UBH) had, since at least 2013, violated the federal Mental Health Parity and Addiction Equity Act of 2008.
United Healthcare and UBH are fighting similar claims in Wit v United Behavioral Health, which is currently on appeal at the U.S. Court of Appeals for the Ninth Circuit. If that complaint is decided against UBH, the insurer might have to reprocess more than 67,000 claims.
The joint New York–federal investigation determined that United Healthcare reduced reimbursement rates for out-of-network mental health services and denied payment for many services using its Algorithms for Effective Reporting and Treatment (ALERT) utilization review program.
All outpatient psychotherapy was subjected to review; by comparison, only a handful of medical and surgical services were. That violated parity laws, the New York Attorney General’s office said in a statement.
“United’s denial of these vital services was both unlawful and dangerous,” New York Attorney General Letitia James said in the statement.
“Protecting access to mental health and substance disorder treatment is a priority for the Department of Labor and something I believe in strongly as a person in long-term recovery,” U.S. Secretary of Labor Marty Walsh said in another statement.
Mr. Walsh added that the settlement “provides compensation for many people who were denied full benefits and equitable treatment.”
‘Investigations change behavior’
Commenting for this news organization, Joe Parks, MD, medical director of the National Council for Mental Wellbeing, applauded the settlement.
“These kinds of investigations change behavior, and people get better coverage,” Dr. Parks said.
He also applauded New York, saying that it “has been one of the more assertive states in expecting companies to comply with parity requirements. They should be emulated by other states.”
Dr. Parks noted that a 2019 U.S. Government Accountability Office report showed that only 20 states routinely conducted parity compliance reviews.
A spokesperson for the American Psychiatric Association said it was notable that the Department of Labor focused on three issues that it had not publicly investigated before.
These were payment parity, the use of algorithms in mental health to identify practitioners and patients who use more health care than expected of the “average” person, and requiring disclosure of how the insurer set rates, guidelines, and medical necessity standards.
The American Psychological Association’s chief of psychological practice, Jared L. Skillings, PhD, said the group was gratified that the Department of Labor and New York took complaints seriously and that it “is encouraged that United Behavioral Health and United Healthcare have agreed to change their unfair procedures regarding reimbursement and denial of psychological care.”
The association “will monitor implementation of the settlement with high hopes for fair treatment for patients with mental health needs,” Dr. Skillings said in an interview.
Across-the-board cuts for therapy
The investigation found that United Healthcare reduced the allowable reimbursement amount for all nonphysicians across the board for psychotherapy – by 25% for PhD-level psychologists and by 35% for all MA-level therapists.
The company’s ALERT system used arbitrary thresholds to trigger utilization review, which “often led to denials of coverage when providers could not justify continued treatment after 20 sessions,” said the New York attorney general.
Beneficiaries had to figure out how to pay for continuing services or abruptly end necessary treatment.
United Healthcare agreed to stop reducing reimbursement and to not employ a similar policy in New York for at least 2 years. It will stop using ALERT and stop issuing denials for psychotherapy through at least 2023.
In addition, “We are committed to ensuring all our members have access to care and to reimbursing providers consistent with the terms of the member’s health plan and state and federal rules,” United Healthcare said.
Dr. Parks noted that United Healthcare had stopped using ALERT long before the settlement and was instead employing Level of Care Utilization System for Psychiatric and Addiction Services (LOCUS) and American Society of Addiction Medicine criteria, which he called “a good step forward.”
‘Meaningful’ payout
United Healthcare will pay $14.3 million in restitution to consumers, including $9 million to 20,000 New Yorkers who received denials of or reductions in reimbursement. The company will also pay more than $2 million in penalties, with $1.3 million going to New York.
The insurer has annual revenues of some $250 billion.
“It’s not a large amount of money in United’s overall business operation,” said Dr. Parks.
However, “It certainly could be a meaningful amount of money for the individuals that didn’t get coverage that paid out of pocket,” he added.
A version of this article first appeared on Medscape.com.
The nation’s largest health care insurer has agreed to pay $16 million in restitution and penalties to consumers, the federal government, and the state of New York to settle complaints that it illegally limited outpatient psychotherapy.
The settlement resolves a joint U.S. Department of Labor and New York Attorney General investigation and lawsuit that found that United Healthcare and United Behavioral Health (UBH) had, since at least 2013, violated the federal Mental Health Parity and Addiction Equity Act of 2008.
United Healthcare and UBH are fighting similar claims in Wit v United Behavioral Health, which is currently on appeal at the U.S. Court of Appeals for the Ninth Circuit. If that complaint is decided against UBH, the insurer might have to reprocess more than 67,000 claims.
The joint New York–federal investigation determined that United Healthcare reduced reimbursement rates for out-of-network mental health services and denied payment for many services using its Algorithms for Effective Reporting and Treatment (ALERT) utilization review program.
All outpatient psychotherapy was subjected to review; by comparison, only a handful of medical and surgical services were. That violated parity laws, the New York Attorney General’s office said in a statement.
“United’s denial of these vital services was both unlawful and dangerous,” New York Attorney General Letitia James said in the statement.
“Protecting access to mental health and substance disorder treatment is a priority for the Department of Labor and something I believe in strongly as a person in long-term recovery,” U.S. Secretary of Labor Marty Walsh said in another statement.
Mr. Walsh added that the settlement “provides compensation for many people who were denied full benefits and equitable treatment.”
‘Investigations change behavior’
Commenting for this news organization, Joe Parks, MD, medical director of the National Council for Mental Wellbeing, applauded the settlement.
“These kinds of investigations change behavior, and people get better coverage,” Dr. Parks said.
He also applauded New York, saying that it “has been one of the more assertive states in expecting companies to comply with parity requirements. They should be emulated by other states.”
Dr. Parks noted that a 2019 U.S. Government Accountability Office report showed that only 20 states routinely conducted parity compliance reviews.
A spokesperson for the American Psychiatric Association said it was notable that the Department of Labor focused on three issues that it had not publicly investigated before.
These were payment parity, the use of algorithms in mental health to identify practitioners and patients who use more health care than expected of the “average” person, and requiring disclosure of how the insurer set rates, guidelines, and medical necessity standards.
The American Psychological Association’s chief of psychological practice, Jared L. Skillings, PhD, said the group was gratified that the Department of Labor and New York took complaints seriously and that it “is encouraged that United Behavioral Health and United Healthcare have agreed to change their unfair procedures regarding reimbursement and denial of psychological care.”
The association “will monitor implementation of the settlement with high hopes for fair treatment for patients with mental health needs,” Dr. Skillings said in an interview.
Across-the-board cuts for therapy
The investigation found that United Healthcare reduced the allowable reimbursement amount for all nonphysicians across the board for psychotherapy – by 25% for PhD-level psychologists and by 35% for all MA-level therapists.
The company’s ALERT system used arbitrary thresholds to trigger utilization review, which “often led to denials of coverage when providers could not justify continued treatment after 20 sessions,” said the New York attorney general.
Beneficiaries had to figure out how to pay for continuing services or abruptly end necessary treatment.
United Healthcare agreed to stop reducing reimbursement and to not employ a similar policy in New York for at least 2 years. It will stop using ALERT and stop issuing denials for psychotherapy through at least 2023.
In addition, “We are committed to ensuring all our members have access to care and to reimbursing providers consistent with the terms of the member’s health plan and state and federal rules,” United Healthcare said.
Dr. Parks noted that United Healthcare had stopped using ALERT long before the settlement and was instead employing Level of Care Utilization System for Psychiatric and Addiction Services (LOCUS) and American Society of Addiction Medicine criteria, which he called “a good step forward.”
‘Meaningful’ payout
United Healthcare will pay $14.3 million in restitution to consumers, including $9 million to 20,000 New Yorkers who received denials of or reductions in reimbursement. The company will also pay more than $2 million in penalties, with $1.3 million going to New York.
The insurer has annual revenues of some $250 billion.
“It’s not a large amount of money in United’s overall business operation,” said Dr. Parks.
However, “It certainly could be a meaningful amount of money for the individuals that didn’t get coverage that paid out of pocket,” he added.
A version of this article first appeared on Medscape.com.