Friday, March 21, 2014


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Health insurer settles claim that it wrongly denied mental health benefits to thousands of New Yorkers

NEW YORK – After an investigation uncovered widespread violations of mental health parity laws, Attorney General Eric Schneiderman announced a settlement with Schenectady-based MVP Health Care, requiring the health insurer to reform its behavioral health claims review process, cover residential treatment and charge the lower primary care co-payment for outpatient visits to most mental health and substance abuse treatment providers. The settlement, the second against a health insurer so far this year enforcing the parity laws, also requires the health insurance plan -- which has more than 500,000 members in the Albany region, Central New York and the Hudson Valley -- to submit previously denied mental health and substance abuse treatment claims for independent review, which could result in more than $6 million being returned to its members.

An investigation by the Attorney General’s Health Care Bureau found that since at least 2011, MVP Health Care, through its behavioral health subcontractor, Value Options, issued 40% more denials of coverage in behavioral health cases than in medical cases. The agreement with MVP is the second reached by the Attorney General’s office so far this year and stems from a broader, ongoing investigation into health insurance companies’ compliance with mental health parity laws. For details on the earlier settlement with Cigna Corporation, please click here.  

“Ensuring that New Yorkers have adequate access to mental health and substance abuse treatment should be a priority for our state,” Schneiderman said. “Insurers must comply with the law to ensure that individuals with mental health conditions are treated no differently than those with physical ailments – and that they are getting what they pay for from insurers.  With this settlement, MVP Health Care commits to greatly improving treatment services available to thousands of New Yorkers.”

New York’s mental health parity law, known as Timothy’s Law, was enacted in New York in 2006, and requires that insurers provide mental health coverage at least equal to coverage provided for other health conditions.