$450k in Mental Health Parity Penalties Issued to UnitedHealthcare

Insurer penalties pass the $2M mark in total

Today the Delaware Department of Insurance announced the completion of a follow-up Mental Health Parity and Addiction Equity Act ("Mental Health Parity") examination of UnitedHealthcare Insurance Company. This investigation also included reviews of complaint and grievance handling, policyholder services, claims, utilization review, medical necessity criteria, pharmacy review, and oversight of contracted Pharmacy Benefit Managers and Third-Party Administrators. In response to substantive findings, including repeated issues, the carrier has been issued a corrective action plan and assessed a penalty of $450,000.

"This comprehensive re-examination of multiple areas of UnitedHealthcare's treatment of policyholders seeking mental or behavioral health care and prescriptions will result in much needed corrections in insurer activity. We must remain vigilant in ensuring compliance with our consumer-friendly laws," said Insurance Commissioner Trinidad Navarro. "Protecting consumers and promoting equity in health care access remains a top priority for our team, even considering the federal government's decision not to conduct compliance on Mental Health Parity. My office has been, and will remain, the primary compliance entity for commercial carriers operating here."

Mental Health Parity laws, which exist both at the state and federal levels, aim to eliminate coverage discrimination between policyholders seeking mental illness or substance abuse care and those seeking physical care. A lack of parity can prevent a person from pursuing needed care due to cost or limited access or otherwise make access more expensive or more time intensive than medical visits. Department examinations are critical to uncovering parity issues as consumers may not be aware if they are experiencing disparate treatment when seeking care.

Violations found in policies and practices during this exam revolved around a lack of parity between coverage for procedures and medications, and for preauthorization requirements. Improper application of Step-Therapy Protocol exceptions, misapplication of non-formulary, formulary, and excluded drug definitions, and improper application of prior authorization for medication-assisted treatment were documented. In addition, UHC applied a broader definition of Specialty Drug than the Delaware Code authorizes, and its automated prescription drug processing did not contain mental health drugs.

Investigators noted that the carrier failed to use the full set of American Society of Addiction Medicine (ASAM) criteria to provide unlimited medically necessary coverage for treatment. ASAM criteria are comprehensive clinical standards which guide the placement, level of care, and treatment plan for persons with substance use disorders. Additionally, the company failed to comply with reporting requirements - the required analyses were not sufficiently specific, detailed, and reasoned to demonstrate whether the processes, strategies, evidentiary standards, and other factors were comparable and applied no more stringently than medical/surgical benefits.

The examination reviewed activity over a 24-month period. Some violations were cited in prior examinations, enhancing the level of penalty the company was issued. Inclusive of this reexamination, Delaware insurers have been assessed a total of $2.11M since enforcement of Mental Health Parity began. These dollars go to the state's General Fund.

Additional Findings

The UnitedHealthcare examination included components of traditional, regularly scheduled exams in addition to the Mental Health Parity review. Findings included: noncompliance with arbitration and appeal acknowledgement and transmission timelines; failure to complete speedy review of grievances; imposition of lower-than-minimum claim reimbursement submission timeline; failure to process clean claims within 30 days of receipt; failure to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear; noncompliance with pre-authorization adverse determination notification standards and preauthorization minimum lengths for care, pharmaceuticals, and chronic or long-term conditions; use of unfair claim settlement practices; violations of infertility coverage statutes; and requiring drugs which do not meet the definition of Specialty Drugs to be obtained through company-designated pharmacies.

The scope of the examination was expanded while in process to include the insurer's application and monitoring of medical necessity criteria. This, in part, included investigation of the use of automation and Artificial Intelligence in making medical necessity determinations. No exceptions were noted.

Positive findings of compliance were noted in areas such as management of Pharmacy Benefit Manager and Third-Party Administrator relationships.