United Health cited for unfair mental health coverage policies

One of the biggest health insurers operating in the state, United Healthcare, has not handled beneficiaries' mental health treatment coverage fairly, a sweeping, multiyear examination by the State Corporation Commission Bureau of Insurance found.

The insurer, which has a 12% share of the Virginia health insurance market, agreed to follow a corrective action plan and pay a $648,000 penalty.

The examination focused on United's policies and systems to make sure that its coverage for mental illness and substance abuse is not more limited or restrictive than its coverage for medical or surgical procedures.

Federal law requires parity.

The examination found that United's policy about coverage for applied behavior analysis for people with autism violated the medical necessity standard set in state insurance law. Insurers have in the past resisted coverage for this behavior-oriented treatment, but Virginia has required coverage since 2011.

United's policy said it would cover continuing sessions of applied behavior analysis, a treatment that often lasts years, only if a there's "a reasonable expectation" that behavior will improve meaningfully in at least two settings, such as home, school and in the community.

The Code of Virginia's medical necessity standard for when insurers must pay for treatment does not say coverage depends on expectation of improvement, but rather on a patient's current functioning.

United's policy "appeared to place unnecessary restrictions" on the therapy, because "an expectation or demonstration of 'improvement' creates a more difficult threshold for the provider or patient to meet than an expectation to 'assist to achieve or maintain maximum functional capacity in performing daily activities,'" the Bureau found.

The Bureau said that United found fraud, waste and abuse in 1% of inpatient, in-network claims for mental health or substance abuse treatment but only 0.2% in medical and surgical claims, as well as similar findings of fraud or waste in 10% of outpatient mental health or substance abuse treatment performed out of its own network compared with 1% for medical or surgical treatments.

"While disparate results alone are not determinative of non-compliance," with federal law on parity, "disparities in the provided metrics between (mental health/substance abuse disorder) benefits and (medical/surgical) benefits indicate red flags," the Bureau found.

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United could not explain the disparities, while its policies relied on subjective factors and unexplained internal processes to decide on coverage, the Bureau said.

These along with the disparities the Bureau found "indicate that the processes, strategies, evidentiary standards, or other factors used in applying post-payment retrospective review to (mental health and substance abuse disorder) benefits are more stringently applied in operation than the processes, strategies, evidentiary standards, or other factors used in applying post-payment retrospective review to (medical/surgical) benefits."

The Bureau found the same subjectivity in United's processes for denying claims for mental health and substance abuse disorder treatment and appeals of coverage denials.

It found United's policies and practices were subjective enough in considering referrals for mental health and substance abuse disorder treatment to suggest these referrals were handled more restrictively than referrals for medical and surgical care.

The Bureau also found this with United's processes for considering coverage for experimental treatment.

It also said United did not provide sufficient information in many instances about policies and procedures.

"Compliance with (federal parity law) is a top priority of United. Further, United is committed to performing a thorough and robust analysis" of the company's treatment limitations, United deputy general counsel Stewart E. Newman wrote to the Bureau.

United accepted a corrective action plan and is following it, but Heather Long, the company's assistant secretary, said the insurer is doing so only to settle the matter and is not admitting to any violation of law.

The company did not respond to a request for further comment.