Findings from Recent Market Conduct Exams Put Insurers on Notice | The Kennedy Forum

Findings from Recent Market Conduct Exams Put Insurers on Notice
January 13, 2020

State Regulators Using Audits and Enforcement Actions to Promote Compliance with Federal and State Parity Laws

Pennsylvania Insurance officials recently announced a $1 million fine against UnitedHealthcare based on violations of the Mental Health Parity and Addiction Equity Act (MHPAEA) and other state regulatory requirements as a result of a recent market conduct exam. UnitedHealthcare has agreed to pay the regulatory fine, along with restitution, to consumers from claims wrongly denied, overpaid out-of-pocket expenses, and interest on delayed claims. United also has agreed to develop an $800,000 public outreach campaign to educate consumers about their mental health and substance use disorder benefits.

The Pennsylvania regulators, who investigated United from January 2015 through March 2016, found extensive noncompliance with mental health parity and prompt pay laws, as well as concerns with the company’s coverage for services relating to autism spectrum disorders and substance use disorders. The audit report also identified other consumer issues associated with the handling of consumer complaints and policyholder services.  

In recent years, the frequency of parity regulatory audits has been on the rise. Several factors account for the increasing accountability. First, the federal government has issued hundreds of pages of additional regulatory and sub-regulatory guidance to the Federal Parity Law over the past five years. The most recent was the September 5, 2019 U.S. Department of Labor (DOL) Guidance which provided information about nonquantitative treatment limitations (NQTL) requirements and a model disclosure form. (The Kennedy Forum published a blog post about this latest guidance). Several key states, such as Illinois and Colorado, also have expanded their parity protections. 

Several key publications, including the Six Step Parity Compliance Guide, have provided an important framework to allow state regulators to begin to standardize the parity audit process. In addition, several auditing tools are being used by state regulators, including U.S. DOL’s Self Compliance Tool, CMS’s Parity Compliance Toolkit, and ParityManager™ (originally developed by CHQI but recently purchased by URAC).

Mannatt Phelps & Philips, reports that “(i)n total, 40 states have taken action to address parity compliance through data calls, investigations, examinations or other regulatory initiatives.” Below are a few more examples of state parity investigations that have led to fines against several well-known health plans.   

In July 2017, the California Department of Managed Health Care reached a settlement with Kaiser Permanente to address repeated failures to provide patients with timely access to mental health services. Kaiser agreed to make corrections in six areas:

  • Improved documentation of quality improvement efforts for access compliance and development of behavioral health quality assurance plan;
    • More transparency in behavioral health appointment access compliance measurement;
    • Increased monitoring of member impact of access insufficiency and associated real-time member remediation;
    • Full implementation of systematic processes to monitor follow-up appointment access adherence to member’s treatment plan;
    • Improved internal corrective action plan development; and
    • Enhanced integration of external provider access data and oversight.

In May 2018, the New York Attorney General published a report summarizing its industry-wide initiative to investigate health plans’ compliance with state and federal parity laws which led to $3 million in fines and another $2 million in consumer reimbursement. The findings included enforcement of eight agreements with seven health plans, which are: MVP, EmblemHealth, Excellus, Beacon Health Options, Cigna, HealthNow, and Anthem. The enforcement actions required plans to implement reforms in their administration of behavioral health benefits, particularly related to medical management practices, coverage of residential treatment, co-pays for outpatient treatment, regular submission of compliance reports, and the improper imposition of preauthorization requirements for medication-assisted treatment (MAT).

Two other noteworthy enforcement actions include:  

  • In September 2018, Blue Cross and Blue Shield of Rhode Island agreed to pay $5 million to expand mental health services following a state audit that found insurers to be out of compliance with state and federal laws; and
  • In January 2019, The Pennsylvania Department of Insurance fined Aetna $190,000 for violating rules on coverage of drug and alcohol abuse treatment and autism.

Parity advocates are expressing hope that we have a reached a tipping point in holding health plans accountable to the Federal Parity Law and state parity laws. This enhanced accountability also has been seen in a number of recent federal court decisions against insurers and third parity administrators for breach of fiduciary duty claims pursuant to the Employee Retirement Income Security Act of 1974 (ERISA) and Federal Parity Law violations. ERISA “is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.”

It is important that consumers and their ordering providers continue to alert the applicable regulatory agencies about any inappropriate denials of care and of any potential parity violations. In addition, please register your complaints at www.parityregistry.org. This information is very helpful for states to launch future regulatory enforcement actions. 

Learn more about parity rights at www.DontDenyMe.org