Insurance Department Market Conduct Report on Blue Cross of NEPA Focuses on Substance Use Disorder Treatment Compliance

HARRISBURG, Pennsylvania, Feb. 13 -- The Pennsylvania Insurance Department issued the following news release:

Acting Insurance Commissioner Jessica Altman today announced results of a market conduct examination (http://www.insurance.pa.gov/Regulations/Regulatory%20Actions/Documents/Current%20Market%20Conduct/First%20Priority%20Life%20Insurance%20Co.%2018.pdf) conducted on the practices and procedures of Blue Cross of Northeastern Pennsylvania (BCNEPA).

Particularly, while the department reviewed many priority areas through this examination, a significant focus was on the company's compliance with laws requiring parity of coverage for substance use disorders and mental health, which must be offered at the same level of benefits as medical or surgical treatment.

"Making sure Pennsylvanians receive the benefits to which they are entitled under their health insurance coverage is a key part of Governor Wolf's battle against the opioid crisis, and these market conduct examinations are an important way to make sure this is happening," Altman said.

The report, which covers the period from January 2015 through March 2016, found substantial areas of compliance with insurance laws. This includes policies and procedures used for the company's collections and billing practices, where no violations were found.

However, the Insurance Department noted several areas where violations were found, including:

* Parity in coverage for substance use disorder and mental health treatment.

* Prompt payment and proper handling of claims. The law requires all uncontested claims and uncontested portions of contested claims be paid within 45 days of receipt.

* Substance use disorder coverage for inpatient detoxification, nonhospital residential treatment, and outpatient services.

"The results of this examination will be helpful for the Insurance Department in our future oversight of the company," Altman said. She noted the department has recommended changes to internal insurance company procedures to correct the issues noted in the report. The Insurance Department recovered $9,000 for consumers from claims that were wrongly denied and interest on delayed payments.

Highmark Inc., acquired BCNEPA June 1, 2015, during the time this market conduct examination was being conducted. In its response to this report, Highmark Inc. asserts many of the violations noted have been addressed by transitioning the practices and procedures of BCNEPA to those of Highmark Inc.

The Insurance Department is in the process of conducting similar market conduct examinations, emphasizing mental health and substance use disorder parity, on all of Pennsylvania's major health insurers to ensure they are in compliance with state and federal law.

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires health insurance plans to contain the same level of coverage for mental health and substance use disorders as for medical or surgical care. This coverage includes quantitative limitations (copays, deductibles, and limits on inpatient or outpatient visits that are covered) and non-quantitative limitations (pre-authorizations, providers available through a plan's network, and what a plan deems "medically necessary"). The law was incorporated into Pennsylvania law in 2010 through Act 14.

Currently, parity is required for individuals with the following health plans:

* Individual and small group health plans, as required by the Affordable Care Act;

* Large group health insurance plans which offer substance use disorder and mental health coverage. Fully insured plans are required to offer this coverage under Pennsylvania Act 106.

* Children's Health Insurance Program (CHIP) and some Medicaid plans.

The Pennsylvania Insurance Department currently reviews all individual, small and large group policies to ensure those policies contain all state and federal policy requirements, including mental health parity.

"Mental health parity in individual and small and large group plans is a critical protection for consumers," said Altman. "Gov. Wolf has made it a priority that the Insurance Department be vigilant in ensuring that Pennsylvanians are receiving the benefits that they are entitled to under state and federal law."

Altman also urged consumers to contact the department's Bureau of Consumer Services if they think their plan does not meet parity requirements for mental health and substance use disorder coverage or have questions about the benefits to which they are entitled.

Information on substance use disorder and mental health coverage (http://www.insurance.pa.gov/Coverage/Pages/MentalHealthSUD.aspx) requirements is available on the Health page at www.insurance.pa.gov.