HealthNow, parent of BlueShield of Northeastern New York, has agreed to settle a suit claiming it wrongfully denied $1.6 million in health claims in violation of state and federal parity laws that require insurers to cover mental health services.
The settlement resolves allegations HealthNet improperly denied members coverage for treatments by subjecting all outpatient behavioral health claims to preauthorization after the 20th visit, and by excluding coverage for nutritional counseling to members with eating disorders. The suit accused HealthNet of improperly denying services for approximately 3,100 members between 2012 and 2015.
New York state and federal law requires insurers cover mental health and substance abuse treatments at the same level as other medical claims.
Under terms of the settlement, HealthNow will pay a $60,000 fine, reimburse members for wrongfully denied claims and revise company policies in regard to nutritional and psychotherapy coverage.
The New York attorney general's office launched an investigation into the nonprofit insurer last year after receiving complaints from policyholders.