Insurer Admits Errors, Agrees to Implement Parity

By late last fall, Minnesota Attorney General Mike Hatch had heard his fill of complaints that Blue Cross and Blue Shield of Minnesota was denying mental health care for children whose parents’ insurance policies entitled them to that care. After discussions with officials of the insurer went nowhere, Hatch decided the best way to get the company to remedy the alleged breaches of contract was to take them to court.

His strategy has paid off in a big way.

In a settlement of the suit announced on June 20, Blue Cross/Blue Shield agreed to alter the way it evaluates the need for mental health care and to lower barriers that make it difficult for beneficiaries to access that care. It also agreed to pay a multimillion-dollar fine to compensate Minnesota taxpayers for care for which it should have paid but for which beneficiaries were forced to turn to the public sector.

Hatch’s suit, filed last October, accused the insurer of causing “a barrage of unwanted delays, unlawful excuses, and unnecessary hurdles” for insured families that tried to obtain mental health, substance abuse, and eating disorder treatment for their children (Psychiatric News, April 20).

Hatch also accused the insurer of illegally shifting to Minnesota taxpayers the cost of care it contracted to provide its beneficiaries by forcing insureds to turn to the public sector for mental health care after Blue Cross delayed or denied care they sought, in some cases care that was ordered by courts. He also charged that the insurer “delay[s] coverage by forcing subscribers into unwarranted appeals of denials of coverage for medically necessary and preauthorized treatment” and misrepresents the way it covers treatment that is authorized. In filing the suit, Hatch included statements from 80 families in which the care of an acutely ill youngster was denied by the insurer’s mental health carveout company, Behavioral Health Services Inc.

He estimated that the total came to about $20 million, and he wanted the insurer to reimburse the state for that amount.

(A recent analysis by the Minneapolis Star Tribune found that dozens of companies issuing policies in Minnesota owed the state $51 million for mental health care for people who had private insurance but for whom the state had to pay after their insurer turned them down.)

Blue Cross had denied the charges, insisting that it paid for 94 percent of the claims submitted for mental health and substance abuse care. In an October 3 statement the company said, “The issue is not about denying care; the issue is about providing care in the most appropriate setting.”

Claims-Denial Procedures

Under the terms of the settlement, in which Blue Cross/Blue Shield did not admit wrongdoing or concede any liability, the insurer agreed to process “urgent” claims within 24 hours and “nonurgent” claims within two business days. This is designed to end the delays that the attorney general claimed were forcing beneficiaries to look to the public sector for care to which they were entitled under the Blue Cross policy.

If it denies a claim or does not adhere to these deadlines, the claim immediately goes to a specially appointed, three-member review committee, with one member appointed by the attorney general, one by a Hennepin County District Court judge, and one by Blue Cross. In addition, if the denial is of a request for substance abuse or eating disorder treatment based on lack of medical necessity, the insurer is obligated to forward that denial to the review committee within six hours.

90 Days to Parity

In an unprecedented agreement for such a pretrial settlement, Blue Cross also said it would implement parity coverage for mental health and substance abuse care that applies to both inpatient and outpatient treatment. The company has 90 days to institute parity coverage, and it is to apply to existing as well as future insurance policies.

The settlement agreement also addressed complaints about treatment-access obstacles. The insurer promised to ensure that it has contracted with enough psychiatrists and other clinicians to meet its subscribers’ mental health care needs. The agreement states that Blue Cross will “have an appropriate provider available within a medically appropriate time for treatment and services, which in no event shall be more than 10 business days.” If a member cannot access a provider in that time, that beneficiary “shall be entitled to receive benefits from a licensed provider within Minnesota or within 100 miles in a contiguous state,” even if that clinician is not part of Blue Cross’s network, and the insurer is obligated to pay for the services.

In addition, the company agreed to make access to care for substance abuse and eating disorders easier and said it “recognizes the medical necessity of treatment for these conditions, including 28-day inpatient treatment for chemical dependency, as well as inpatient and partial inpatient treatment for eating disorders.”

Finally, the insurer agreed to a cash settlement of $8.2 million to compensate the state for care the company should have provided but for which the state had to pick up the tab.

Richard Neuner, Blue Cross’s vice president of consumer affairs, acknowledged at a post-settlement, joint press conference with Hatch that the company “failed these families in some important ways.”

The president of the Minnesota Psychiatric Society, Scott Crow, M.D., told Psychiatric News that he and his colleagues are viewing the settlement as “a very positive development for patients and the providers who treat them.” He noted that in light of the increasingly difficult time patients have had in accessing mental health care over the last few years, the terms of the settlement “seem to be a major step in the right direction.”

The terms of the settlement in the case State of Minnesota v. Blue Cross and Blue Shield of Minnesota can be read on the Web at www.ag.state.mn.us/ by clicking on “Attorney General Mike Hatch. . . .” ▪