Bryan Cohen Jan. 17, 2014, 2:25pm

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Wednesday with a health insurer that allegedly wrongfully denied claims for mental health treatment.

Cigna Corporation allegedly failed to comply with Timothy's Law, legislation enacted in New York in 2006 and named for a 13-year-old boy who committed suicide after an insurance company denied ongoing coverage for treatment of serious mental health issues. Cigna agreed to reprocess and pay hundreds of claims for nutritional counseling for mental health conditions, such as eating disorders, to members who were allegedly wrongfully denied those benefits.

"State law clearly requires health insurance companies to provide mental health benefits on par with other medical benefits," Schneiderman said. "There is no gray area here. Today's settlement puts insurance companies on notice: My office will aggressively enforce mental health parity laws and fight to give patients the benefits they are legally entitled to - and which they pay for."

Under the terms of the settlement, Cigna agreed to eliminate a three-visit cap for mental health conditions and to reprocess and pay members whose claims were denied due to the limit. Cigna will pay approximately $33,000 in restitution to resolve the allegations and will conduct in-service training for its claim and clinical review staff related to the removal of visit limits for counseling prescribed for mental health disorders. Cigna will also pay $23,000 to Schneiderman's office as a civil penalty.

According to the National Institute of Mental Health, eating disorders are biologically based mental illnesses. Evidence-based medical guidelines confirm the importance of nutritional counseling in treating eating disorders.

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