Reports: Some insurers violate discrimination law

Though the overdose death toll continues to rise, opioid addiction isn’t treated with urgency like other chronic and deadly diseases, according to national studies and treatment experts.

Though state and federal parity laws require certain types of insurance plans to cover mental health and addiction treatment on par with how they cover physical medical care, they are not always enforced.

Many families report battles with insurers in getting coverage for needed addiction treatment.

This includes situations when patients were discharged from residential care over clinicians' objections because their insurer stopped paying. For example, Southampton resident Lisa LaTerza said her son, Matt Freda, almost lost insurance coverage 12 days after he began treatment at The Life Cycle of Galax in Virginia in 2016.

“We had gotten this far to get help and an insurance company that we pay for is going to stop him? I fought until I got to the top (of insurance company) and I told them that if he left that day, they would be responsible for his death,” said LaTerza, who felt it was unfair to have to beg for coverage. LaTerza didn't believe her son's emergency was treated like other medical emergencies.

"If he had any other kind of life-threatening disease, there would have been more consideration for treatment," said LaTerza, who recalls her son being in a very fragile state at that point.

Even the arm of the Department of Labor tasked with enforcing the law — the Employee Benefits Security Administration — agrees it lacks the teeth to impose any penalties on insurers who violate laws by denying or delaying coverage. In an April report to Congress, Department of Labor officials said it was too limited to fully enforce the law.

“By statute, the EBSA is precluded from directly enforcing the law against insurance companies, even when evidence that the insurance company is the party responsible for a parity violation,” a 2018 Department of Labor report states. “(It) also cannot assess civil monetary penalties in egregious cases of noncompliance to deter bad actors."

Of 1,700 reported complaints in recent years, the department found 300 instances of insurance companies violating parity laws by limiting treatment, requiring higher co-pays and lower visit limits than for other medical services and imposing “overly restrictive fail-first policies.” This is where a patient must fail a less expensive form of treatment before being allowed to access another. Other violations included “impermissible annual and lifetime dollar limits.”

Generally, if violations are found, the agency requires insurers to pay any improperly denied benefits, but violators face no added penalty. Yet government reports say greater penalties for violations are needed to improve compliance.

Both the Mental Health Parity and Substance Use Disorder Parity Task Force and the President’s Commission on Combating Drug Addiction and the Opioid Crisis have recommended that Congress enact legislation to allow direct enforcement against insurers to ensure compliance with the law.

In a Pennsylvania House hearing last year, Samuel R. Marshall of The Insurance Federation of Pennsylvania testified that lawmakers "should not confuse an insurer questioning and examining a provider’s treatment plan with not complying with state and federal law."

"A mandate is not a carte blanche for unquestioned treatment to the limits of the mandate," he said. "Before mandating any level of expanded coverage, the General Assembly should hear from a wide group of providers. Cost has to be a consideration.”

"In the world of insurance regulation, the way to stop a bad insurer is to enact a law that outlaws that practice. The same needs to apply for providers," Marshall said.

In a report to the president in 2016, The Commission on Combating Drug Addiction and the Opioid Crisis argued the act of denying “real parity is already illegal.”

“At this point, the largest outstanding issue is treatment limits. Patients seeking addiction treatment, including MAT, are often subjected to dangerous fail-first protocols, a limited provider network, frequent prior authorization requirements, and claim denials without a transparent process,” the commission stated.

Parity requirements extend to things like out-of-pocket costs and even the number of medications that are covered by plans, said Dr. Richard Snyder, chief medical officer of Independence Blue Cross.

“The inequity that we saw years ago between mental health and substance use benefits and medical benefits doesn’t exist today,” he said. “The mental health parity monitoring that the federal government is doing now pretty much ensures that there’s close alignment between the behavioral health and the medical benefits. And that is great.”

But more work needs to be done, some treatment providers and families say.

After a two days of phone calls with insurance officials, LaTerza did get the insurance company to pay for the remaining 18 days for her son to finish inpatient treatment.

“If he left that day, he would not be here today,” said LaTerza, adding that families shouldn't have to beg for coverage of treatment they've already paid for.

Deb Beck, president of a prevention and treatment advocacy group, Drug and Alcohol Service Providers Organization of Pennsylvania, said some progress has been made in improving access to treatment for about 25 percent of insured residents of Pennsylvania who are covered under the state's Act 106 law. The act was upheld by the Pennsylvania Supreme Court in 2009.

When state residents call Beck's office asking for help, employees make sure they understand their coverage under the state law, she said. Her wish is that insurers and government officials would launch a public awareness campaign with letters and notices to consumers to alert them to treatment coverage they have and how to access it so they don't have to fight to get help when they need it.

"Right now many patients don't know how to access their health plan or what their benefits are," she said. "Everybody has some kind of coverage, but try to access it? That's where the barriers are."