Regence BlueShield fined for violating WA mental health rules

Washington’s Office of the Insurance Commissioner has fined Regence BlueShield $550,000 over the health insurer’s failure to follow rules to ensure equitable mental health coverage.

The office found Regence violated state and federal laws for “mental health parity,” which require insurers to provide mental health coverage at a rate comparable to their coverage of medical and surgical benefits.

For example, if a provider offers coverage for unlimited visits to the doctor for a chronic physical condition, such as diabetes, it must offer comparable coverage for a chronic mental health condition, such as schizophrenia or depression.

Regence failed to provide documentation that showed it was in line with mental health parity laws, the insurance commissioner’s office said in a news release. That included details about what information Regence uses to determine if care is “in network,” and what criteria it uses to set reimbursement rates for providers (the amount of money a provider gets back from an insurance company for offering care).

It also failed to provide documentation showing how the limitations of its mental health coverage compare to those for its medical or surgical coverage.

The state had requested this information several times between 2019 and 2023, and had conducted several market scans and reviews, the insurance commissioner's office said.

When Regence did provide data, its coverage showed disparities in multiple areas, including how much it was reimbursing its medical and surgical providers compared to behavioral health providers.

“The data Regence provided, or in some cases failed to provide, demonstrates a lack of accountability for following this nation’s insurance laws,” said Washington Insurance Commissioner Patty Kuderer in a news release. “Throughout this process, Regence’s staff appeared to willfully misinterpret our questions, dismiss our concerns and generally disregard their own responsibilities to their members’ well-being.”

Ashley Bach, a spokesperson for Regence BlueShield, said in an email that Regence “worked diligently” to provide responses to the Office of the Insurance Commissioner’s requests.

“We implemented state and federal requirements for behavioral health access in good faith, made necessary updates and will continue prioritizing compliance while supporting future rule-making for clear, consistent standards,” Bach said in an email.

This is the third insurance company the state has fined for parity violations over the past two years. The insurance commissioner’s office fined Premera $550,000 in August and United Healthcare $500,000 in 2023. Those insurance companies said they made the required changes or are in the process of doing so.

The insurance commissioner’s office has been conducting comparative analyses of insurance providers in Washington for the past few years, thanks to federal grants the agency received to ensure companies comply with mental health parity laws.

Although federal laws on mental health parity were passed in 2008, they have not been consistently enforced. Studies show that insurers frequently disregard the rules, and a 2024 report found that patients were over 10 times more likely to go out of network for psychological care compared to specialty medical care — a sign needed mental health care wasn’t available in-network to patients.

In Washington, more than 20 people filed complaints over the past two years after they received prior authorization for out-of-network mental health care, but were then told they didn’t have coverage.

Congress passed legislation to require more reporting about which companies were following parity rules, which was finalized last year. The Trump administration has said it may rescind those recently passed enforcement rules.

While Washington has its own parity laws to protect health insurance customers, they don't extend to everyone. Those on Medicaid, the federally funded health plan for low-income Americans, or those on self-funded plans, where employers provide benefits directly to employees, are still under federal rules.

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