Health plans faces scrutiny at Senate mental health hearing
The health insurance industry faced withering criticism and the threat of a joint legislative audit during a hearing last month to examine how well the state is enforcing a landmark 2020 mental health parity law.
During the three-hour hearing by the State Senate Select Committee on Mental Health and Addiction Medicine, mental health advocates and county healthcare officials testified that health plans are flaunting the law and pushing patients with severe mental health conditions onto the taxpayer-supported public healthcare system.
State Sen. Dave Cortese, D-San Jose, who serves on the Joint Legislative Audit Committee, suggested that an audit might be necessary to determine how much the failure of health plans to comply with parity laws is costing taxpayers.
“There are too many ‘I don’t knows there for me,’” Cortese said during the hearing. “We have other avenues to find out what those answers really are.”
The Oct. 18 hearing focused on the enforcement of SB 855, the landmark parity law authored by State Sen. Scott Wiener, that was written to stop health plans from wrongly denying mental health care to Californians. The bill requires health plans to:
- Cover medically necessary services for all mental health conditions identified in the Diagnostic and Statistical Manual and International Classification of Diseases.
- Determine “medical necessity” based on non-profit professional association guidelines rather than allowing health plans to set their own criteria that too often result in denying appropriate treatment.
- Provide out-of-network care at no additional cost when timely or geographically accessible in-network care is not available for medically necessary treatment.
The Department of Managed Health Care, which is tasked with enforcing the law, faced criticism for lax oversight, but representatives for the health insurance industry also found themselves in the “hot seat,” for failing to abide by SB 855.
The health insurance industry faced withering criticism and the threat of a joint legislative audit during a hearing last month to examine how well the state is enforcing a landmark 2020 mental health parity law.
Joan Borsten, executive director of Summit Estate Recovery Center, testified that health plans are ignoring SB 855’s requirement to use criteria established by the American Society of Addiction Medicine (ASAM) to determine length of stay and level of care for patients with substance use disorders.
She told legislators that health plans were flaunting the law by continuing to pay doctors not trained in addiction medicine to use inappropriate criteria to deny coverage.
“Across California insurance companies prematurely send substance use disorder patients home early, disregarding the ASAM criteria, putting countless patients at risk of relapse, homelessness, and in some tragic cases even death,” she told legislators.
Borsten added that her agency tracked billing denials to find that none of the approximately 80 internal and external doctors hired by insurance companies to perform peer-to-peer reviews were ASAM accredited, nor did they use ASAM criteria as required under state law.
State regulators found similar issues with Kaiser Permanente during its recent investigations. An audit of 100 patient charts found that none indicated the use of nonprofit clinical criteria, such as ASAM. Instead, Kaiser was found to use improper criteria to make medical necessity determinations, including Tridiuum’s BHI.
Taxpayers left paying the tab
Michelle Cabrera, executive director of the County Behavioral Health Directors Association of California, testified that county mental health systems have been overwhelmed with requests from privately-insured residents, and that private health insurance plans routinely refuse to adequately reimburse counties for the care provided.
“We have heard repeatedly from our beneficiaries with significant mental health conditions such as Schizophrenia… that their commercial insurance plans suggest to them directly that they drop their commercial insurance and become Medi-Cal eligible so that they can access the more robust set of benefits that are available through our counties,” Cabrera said. “This really shows that we have so much more work to do beyond parity… to improve coverage of life-saving treatments that can assist individuals in preventing the worst outcomes.”
Jedd Hampton, who represented the health insurance industry at the hearing, struggled to win over legislators. Sen. Wiener, who chaired the hearing, challenged Hampton’s claim that health planss struggled with the high cost of out-of-network care.
“One of the challenges around network adequacy is because the reimbursement rates are not where they need to be,” Wiener told Hampton. “And so you have a lot of mental health providers who choose not to go in-network because of those inadequate reimbursement rates. So I think it’s tough for plans to note that there are costs associated with out-of-network care when the reason that’s happening is because of inadequate reimbursements.”
In response, Hampton, the legislative director for the California Association of Health Plans, asserted that reimbursement rates are negotiated with therapists. He told the legislators that “There are two parties at the table to negotiate those rates,” a claim that ignores the reality that only institutional providers tend to have real market clout, and even they are often ignored.
Legislators challenge the health plans’ claims
Sen. Cortese directly challenged Hampton when he claimed that fraudulent claims were contributing to denials of care by health plans.
“I want to know the percentage of denials that are because of fraud,” Cortese said. “I think you have to put your analytics where your mouth is on this. If you’re going to sit here before a Senate committee and say fraud is the problem, then show us the numbers on that.”
The legislators made clear to state regulators and health plan representatives that better oversight of SB 855 was needed and that the recent Kaiser settlement was only a first step to vigorous enforcement.
“From what we hear on the ground, it seems there is pretty widespread non-compliance,” Sen. Wiener said. “I want to stress the importance… of robust enforcement. And what happened with Kaiser is great. And I hope that can be a template for other problem situations.”