UnitedHealth to Pay $15.7M to Settle Mental Health Benefits Parity Case

UnitedHealth Group has agreed to pay nearly $2.1 million in penalties and $13.6 million in restitution to resolve battles with federal and state regulators over behavioral health benefits.

The federal Employee Benefits Security Administration (EBSA) and New York Attorney General Letitia James have accused the company’s Optum Behavioral Health of violating the federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) by applying different rules to behavioral health care claims than to other types of health care claims.

James has also accused Optum of violating New York’s state behavioral health parity law, which was adopted in 2006.

In her complaint, James says an Optum senior medical director told colleagues that a failure to provide adequate provider reimbursement for one sick woman led to the woman entering an inpatient facility at a cost of $2,000 per day.

In a stipulation document that spells out the terms of the settlement agreement, the parties note that Optum Behavioral Health has not admitted fault, guilt or wrongdoing, and that no court has ruled on the merits of the allegations.

UnitedHealth said in a statement about the settlement that the company is committed to ensuring that enrollees have access to care and to complying with state and federal provider reimbursement rules.

‘We are pleased to resolve these issues related to business practices no longer used by the company,” the company said. “As part of our broader commitment to quality care, we continue to support our members with increased access to providers and new ways to get the effective behavioral support they need.”

Behavioral Health Parity Basics

The term “behavioral health” refers to care both for conditions such as depression and schizophrenia and treatment for substance use disorders, such as alcoholism.

MHPAEA requires an affected health plan that pays for behavioral health care to use comparable quantitative and non-quantitative limits for behavioral health care and other types of health care.

The New York parity law, Timothy’s Law, requires that coverage for mental health and substance use disorder treatment be no more restrictive than coverage for treatment of other health problems.

State insurance regulators handle MHPAEA and state parity law enforcement in cases involving individual coverage and fully insured group benefits.

EBSA — an arm of the U.S. Department of Labor — is in charge of policing parity at self-insured employer plans.

Health Net is one example of a health insurer that has said it has seen a great deal of fraud at drug rehabilitation centers.

Many behavioral health professionals say they have such a hard time getting paid that they run cash-only practices and decline to participate in health plans’ provider networks.

Consultants at Milliman, an actuarial consulting firm, argued in 2017 that patients’ use of out-of-network providers is a good indicator of health plan reimbursement adequacy.

The consultants reported that patients with preferred provider organization coverage were between 2.8 times more likely and 4.2 times more likely to use out-of-network providers than users of other types of care were.

The Allegations

James alleges in her complaint that Optum Behavioral Health treated behavioral health care providers differently from other providers in two ways.

One was that the organization reduced the allowed reimbursement amount for services provided by non-physicians, even though non-physicians provide the majority of behavioral health care. The organization reduced the allowed amount by 25% for services provided by psychologists with doctorates and by 35% for services provided by therapists with master’s degrees, according to James.

Optum applied those kinds of reimbursement rate reductions for medical treatments only in limited circumstances, James says.

James says Optum also treated behavioral health care providers differently by using a special utilization review program, the Algorithms for Effective Reporting and Treatment (ALERT) program, on behavioral health care and no other forms of care.

Up until June 3, 2019, the ALERT program led Optum Behavioral Health to deny many of patients’ behavioral health claims, based on assertions that the level of care requested was not medically necessary,

For some other types of care, UnitedHealth has used an outlier management program that has been much less likely to lead to denials of claims, and, for other types of care, the company has used no comparable utilization review method, James alleges.

Labor Department building in Washington. (Photo: Mike Scarcella/ALM)