Giving Teeth To Parity: New York Paves the Way for More Medicaid Managed Care Oversight

The state of New York fined five Medicaid managed care plans a total of $2.6 million for denying claims or failing to pay for specialty behavioral health services.

Other states may start to follow New York’s example.

The enforcements were filed after New York’s office of mental health conducted a comprehensive examination of behavioral health claims denials in the state. The examination found that the types of care most frequently denied included: assertive community treatment, personalized recovery-oriented services, comprehensive psychiatric emergency program, partial hospitalization, and adult behavioral health home- and community-based services.


These fines may be the start of a larger trend, according to Bragg Hemme, a shareholder at the law firm Polsinelli and co-chair of its behavioral health care group.

Polsinelli has more than 1,000 attorneys in 22 offices across the country.

“[These enforcements are] unique but I would anticipate that other Medicaid agencies, particularly those that use a lot of managed care, will hopefully fall in line and make similar efforts,” Hemme told Behavioral Health Business. “It provides a roadmap for others to follow along.”


MCOs that use third parties to administer behavioral health care benefits have higher rates of inappropriate denials, Hemme said.

“We see this a lot in the commercial world, where they’ve got a large health plan and then a separate entity that runs their behavioral health claims, like administration and utilization management,” Hemme said. “Under the parity umbrella, it’s hard to tie apples to apples, from medical benefits to physical health care benefits to mental health care benefits, when they’re under different realms. It’s one step removed and harder to do unless you’re really focusing specifically on the metrics and reviewing where you have high denial rates.”

Most people who experience insurance denials do not know whether they have appeal rights or know which organizations to turn to for help, according to KFF. Almost a quarter of consumers who experience a denial have declines in health, as compared to 10% for people who do not experience a denial.

“The companies that continue to flout these regulations are imposing a formidable barrier that ultimately discourages New Yorkers from getting the mental health care they need,” Ann Sullivan, commissioner of New York’s office of mental health, said in a release. “New York State is holding Medicaid insurers accountable and those insurers failing to comply with the law will face significant penalties.”

The recently penalized companies include:

– Affinity Health Plan Inc., acquired by Molina Healthcare in 2021, was fined $349,500 for “failing to provide adequate oversight of delegated management function and failing to reimburse providers at required rates.”

– Amida Care Inc., a nonprofit no/low cost Medicaid plan, was fined $232,000 for “inappropriately denying behavioral health claims and failing to comply with prompt pay requirements.”

– EmblemHealth, one of the country’s largest nonprofit health plans, was fined $422,000 for “failing to correct inappropriate claims denials and failing to pay claims at required minimum rates.”

– MetroPlus HealthPlan Inc., a low/no cost health plan with 700,000 members in New York, was fined $584,000 for “failing to pay claims at required minimum rates; and failing to reimburse providers at the required rates.”

– MVP HealthPlan, Inc., which has a strategic alliance with Cigna, was fined $1 million for “failing to pay claims at required minimum rates and failing to reimburse providers at required rates.”

Enforcing state regulations and Medicaid, rate payment law is crucial to making improvements for behavioral health parity, Hemme said.

“The federal administration’s focus on parity is important,” Hemme said. “Congress’s focus on parity is important. I think as they start to add more teeth to those programs, and more enforcement, hopefully we’ll see actual change in payer behavior.”

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