October 18, 2023
OLYMPIA, Wash. — Insurance Commissioner Mike Kreidler has imposed a $500,000 fine against UnitedHealthcare Insurance Company (UHIC) for failing to demonstrate how it administers its mental health and substance use disorder benefits in accordance with state and federal laws. Half of the fine — $250,000 — is suspended, pending adherence to a compliance plan.
“We expect companies to deliver critical benefits to consumers who need them, without barriers, and to demonstrate their compliance when asked,” Kreidler said. “If they cannot do so, we will hold them accountable.”
UHIC failed to sufficiently demonstrate to Kreidler’s office how the company administers its mental health and substance use disorder benefits, despite at least four separate requests made between 2019 and 2021.
The specific issues included:
- Failure to address an apparent disparity that showed a higher number of inpatient facility mental health/substance use disorder cases reviewed and denied for medical necessity, compared to inpatient facility stays associated with a medical service.
- Failure to address an apparent disparity between UHIC’s reimbursement rates for certain types of mental health/substance use disorder providers, as compared to medical and surgical providers.
- Potential non-compliance with state and federal mental health parity laws.
Under state and federal laws, coverage and access to mental health and substance abuse disorder services must be comparable to — and no more stringent than — medical and surgical services. Federal law also requires insurers to perform comparative analyses showing their plans comply with mental health parity requirements and to provide the resulting documentation to regulators upon request.
“The number of people suffering from behavioral health crises in our country is staggering and tragic,” Kreidler added. “We worked hard to increase everyone’s access to meaningful insurance coverage and that includes guaranteeing people coverage of their behavioral health needs, too.”
Under the compliance plan UHIC must work with the OIC to address its issues and report to Kreidler’s office every six months for two years; if any of these reports show a disparity of more than 10% between behavioral health and medical services, UHIC must show the OIC how it will resolve the disparity. The reports must include prior authorization approval rates for inpatient care, office visit reimbursement rates, and out-of-network provider usage.
UHIC has also agreed to show that its network adequacy standards for behavioral health services are comparable to those it applies to medical services.
The suspended fine will be imposed if UHIC doesn’t follow the compliance plan. The OIC could take additional enforcement action if it determines that UHIC is violating additional mental health parity laws.
Background
Washington state’s Mental Health Parity Act was signed into law in 2007. The federal Mental Health Parity and Equity Addiction Act was enacted in 2008.
The Office of the Insurance Commissioner (OIC) received federal grants under the Affordable Care Act in 2018 and 2021 to determine whether Washington’s health insurers offer comprehensive, affordable access to mental health services and treatment for substance use disorders — and to identify the causes of any access issues and propose solutions.
As part of this project, the OIC required insurers to respond to a data call in 2019 and 2020 to identify barriers to mental health services. Based on UHIC’s responses, OIC determined that the company may not have followed state and federal mental health parity requirements. That sparked the review of the company’s practices.
UnitedHealthcare, based in Connecticut, has provided disability and life insurance in Washington since 1974.