The Promise of Mental Health Parity, 13 Years Later
Part III: Denials, Appeals and External Reviews -- Is the System Broken?
This article is the third in a series about the Federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The Federal MHPAEA was enacted as a remedy for not treating mental health (MH) and substance abuse (SA) as comprehensively as medical and surgical treatment. As explained previously, the key promise is that treatment limitations for mental health be no more restrictive than medical/surgical health, and there be no separate limitations that are only applicable to mental health or substance abuse treatment. Earlier articles focused on inadequate treatment networks for MH/SA, and non-quantitative treatment limitations that we commonly encounter when assisting families in obtaining coverage. Today’s article will focus on denials and both internal and external appeals.
Too frequently, the checks and balances in obtaining medically necessary treatment do not work. The first level of the appeal process actually involves obtaining a written response to the request for treatment or the request for payment of claims, which often is a denial letter. As strange as this may seem, we OFTEN encounter problems in this very first stage. Claims are frequently lost, not processed, deleted, or we are told that the facility is “not eligible.” This is a deliberate tactic, which allows the plans to stall in processing the claims, and wears down those trying to get coverage. When they say they do not have the claim in their system, they require you to submit again, and allow themselves an additional 30 days from receipt to process. It happens nearly reliably in certain situations for certain types of plans, and much more frequently on the MH than the medical/surgical side of the plan. For example, for Wilderness programs, when we submit claims to the “local” Blue affiliate (where the facility is located) on behalf of a facility (which is how the Blue plans tell you to submit), the claim is supposed to be forwarded to the “home” plan, where the person’s insurance is based, and then processed (they will pay or provide a reason for denial). As a counter-measure, we will submit to both “home” and “local” plans. Even with that, however, the two plans play a game of hot potato, denying because it was sent to the ‘wrong’ entity, though it was sent to both. We often have to bring in the state regulator or employer just to get the claim processed.
Another type of struggle that we frequently encounter with United Behavioral Health is that when trying to obtain prior authorization, we learn that the facility has been placed on a “do not authorize” list. UBH often does not provide a written denial, or if they do, it is vague about the reasons. The facility typically undergoes increased scrutiny and must satisfy a long list of requirements, which are not typically imposed on equivalent facilities on the medical/surgical side, before they can be be removed from this list.
In the Kaiser system, many of our clients are incorrectly told by clinicians that certain mental health services are not available. They must then reach out and formally request services from the member services department before they receive a written denial letter. These are systemic problems which occur much more frequently on the mental health than the medical side of the plan and are used by the health plans to delay and obstruct the appeal process.
The second level of this process involves responding to the written denial. We will carefully review the reasons given, and write a thoughtful appeal based on their reasons. But the plan holds all the cards here: they both issue the decision and arbitrate it. It is rare (but not unheard of) that cases get overturned. Sometimes when they do, there is an extreme case of medical necessity that was not fairly reviewed initially, or there was a blatant and obvious error. Some plans only allow one internal review, others require two, and some plans allow an optional second level appeal.
The third part of this process involves an external review with an outside reviewing agency that is supposed to be impartial. Some plans will only allow this for cases where medical necessity is in dispute. Others will sometimes send administrative/legal disputes to a legal team for review (WA state), or in other states, the regulator will step in and moderate (CA, NY). For self-funded plans, the health plan (also known as the Third Party Administrator) contracts directly with the external reviewing agency. This introduces an inherent bias, -- if the reviewing agency routinely overturns the plan’s decisions, it is likely that the plan will engage a different group that gives them more favorable results the next time. We see fewer overturns from self-funded than fully funded plans, though they do occasionally occur. Even with fully funded plans, however, we often see unfair rulings where the reviewing agency misstated medical facts, used overly stringent criteria that failed to conform with generally accepted standards of care, or simply echoed back the plan’s argument, even though it had little merit. We have recently started to see lawsuits where the reviewing agency is named as a co-defendant along with the health plan.
All of these tactics make it harder for families to get coverage for legitimate mental health treatments, leading to an increased need for more litigation. While most families prefer not to go through this stressful process, it sometimes is the only option where they can find justice in what is too often a broken system.
