Enforcement of Parity Law Broadens to Include New Areas of Insurer Violations

The Mental Health Parity and Addictions Equity Act (MHPAEA) has been largely effective in eliminating discriminatory quantifiable treatment limits—outpatient visit or inpatient stay limits—for mental illness or substance use disorders.

But APA staff involved with enforcement of the parity law say that insurance companies have continued to find ways to limit access to care. At least one law firm that has aggressively pursued enforcement of the parity law insists there are wide areas of enforcement in which clinicians and/or patients may be plaintiffs in class-action lawsuits.

Prior authorization, utilization review practices requiring “step care” (the practice of requiring patients to try a lower-cost form of treatment before being authorized for more expensive care), and other “nonquantifiable treatment limits” are still being used by insurance companies to restrict access to care, said Brian Hufford, J.D., an attorney with Zuckerman Spaeder LLP.

“Insurance companies are at war with the behavioral health community,” Hufford told Psychiatric News. “They want to keep down utilization as far as possible. The insurance companies have the upper hand because they control the dollars that pay for treatment. It’s important that the mental health community realize that there are wide areas of violation of the parity law, and behavioral health providers and their patients need to be prepared to fight back to level the playing field.”

Irvin “Sam” Muszynski, J.D., APA’s senior policy advisor and director of parity enforcement and implementation, said that the encompassing problem is “network inadequacy”—health plan provider networks that have few mental health professionals available to treat patients. In some cases, health plans have been found to have “phantom networks” that may include physicians who are no longer accepting patients, have moved out of a geographic area, or—in some cases—are deceased.

A study last year by researchers with the American Psychiatric Association Foundation found that the majority of network psychiatrists listed as practicing in the Washington, D.C., area in three major health plan networks were either not able to schedule an appointment or were not reachable at the telephone numbers listed for enrollees to call. The analysis revealed that close to a quarter of the phone numbers for the listed psychiatrists were nonworking numbers or were not associated with a return call. And only 14 percent of psychiatrists were able to schedule any appointment at all; in one plan, only 4 percent were able to schedule an outpatient appointment (Psychiatric News, June 17, 2016).

Similar studies being conducted across the country have yielded similar results, according to Muszynski.

Hufford and Muzsynski said that an especially prominent problem that contributes to network inadequacy is the practice of discriminatory reimbursement for mental health.

“We hear constantly of inadequate provider networks resulting in patients being on extraordinarily long waiting lists or otherwise having great difficulties finding in-network providers,” Hufford said. “We think that a big cause of this problem is that reimbursement for behavioral health providers is so poor. If we can collect evidence of the fact that reimbursement for behavioral health is much more restrictive than it is for medical care, we believe this can serve as an important part of a parity law claim.”

Muzsynski said that APA has engaged with state insurance commissioners and state attorneys general about provider reimbursement for mental health, and the issue is beginning to attract the attention of insurance regulators. He and Hufford urge psychiatrists to contact APA or Zuckerman Spaeder about discriminatory reimbursement rates and other practices they believe may be limiting access to care in violation of the parity law.

But it’s also critical, they said, for patients to come forward as witnesses or plaintiffs willing to testify that insurance company practices have hindered their access to care. The APA Ethics Committee, in response to a query from Psychiatric News, released a statement saying clinicians can ethically inform patients about opportunities to litigate on the patient’s behalf when insurance company practices have denied or limited the patient access to necessary care.

The committee statement noted that Section 7 and Section 9 of the Principles of Medical Ethics With Annotations Especially Applicable to Psychiatry “encourage psychiatrists to participate in activities that improve public health and access to care.”

The committee statement also said, “It is not unethical for a psychiatrist to inform patients that there may be an opportunity for them to litigate claim denials on behalf of themselves and others who are discriminated against because they have a mental illness and to provide them with the information about how to inquire into this opportunity. It would not be appropriate, however, to force patients into following through or to attempt to influence their decisions.”

Zuckerman Spaeder has aggressively pursued litigation around parity violations. Most prominently, the law firm represented the New York State Psychiatric Association’s (NYSPA) suit against UnitedHealth Group challenging a host of restrictions that NYSPA alleged that United had laced on mental health care. The suit alleged such problems as more restrictive internal coverage guidelines, higher evidentiary burdens for authorization of care, more stringent utilization review practices, refusal to pay claims during the appeal process, and applying less favorable reimbursement rates.

An August 2015 ruling by the U.S. Court of Appeals for the Second Circuit recognized that NYSPA could represent its members and their patients in pressing a claim under the MHPAEA through “associational standing.” Also, the court decision (overruling a lower court) recognized that United could be sued even when it acted not as the insurer but as the administrator of a self-insured plan. This means that the carriers are at risk under MHPAEA whenever they exercise discretion in the administration of benefits and employees do not have to sue their employer (as United argued) to recover benefits (Psychiatric News, October 16, 2015).

The firm is currently pursuing a case in New York state against UnitedHealth, claiming the insurance company restricts coverage of nutritional counseling for patients with anorexia in violation of the parity law.

Hufford said since passage of the parity law—and regulations issued by the government requiring strict interpretation of parity rules—insurance companies have become more creative in finding ways to keep utilization low.

That’s a message APA shared last year with the White House Task Force on Parity, appointed by then President Barack Obama. When the task force’s report was released last October, among its recommendations was that the federal government work with the National Association of Insurance Commissioners and states to develop a standardized template that states could use to help assess parity compliance.

Hufford noted, however, that some insurance practices are difficult to litigate under the parity law, which requires a comparison of insurance company practices across the mental health/substance use and medical/surgical areas of coverage. For that reason, he said, the firm is turning to charging insurance companies with failure of fiduciary responsibility under ERISA (Employee Retirement Income Security Act).

“Insurance companies are applying hidden internal guidelines that allow them to be more restrictive of mental health care,” Hufford said. “It’s important that people in the behavioral health community—providers and patients—understand that they don’t have to take it lying down, and there are ways to fight back.” ■