Bryan Cohen Jul. 10, 2014, 6:55pm

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement on Wednesday with a New York City-based health insurer to resolve allegations it violated mental health parity laws.

EmblemHealth Inc. allegedly issued 64 percent more denials of coverage in behavioral health cases than in medical cases through its behavioral health subcontractor, Value Options. New York's mental health parity law, known as Timothy's Law, requires that insurers provide mental health coverage at least equal to coverage provided for other health conditions. The federal Mental Health Parity and Addiction Equity Act prohibits health plans from impressing greater financial requirements or treatment limitations on substance use or mental health disorder benefits than on surgical or medical benefits.

"Our mental health parity laws were enacted to ensure that New Yorkers have adequate access to mental health and substance abuse treatment," Schneiderman said. "Insurers must comply with the laws - and they must treat people with mental health and substance abuse conditions as they do those with medical conditions. Under this settlement, improved services will be available to the millions of New Yorkers who are members of EmblemHealth plans. My office will make sure that everyone, including big insurance companies, play by the rules."

Under the terms of the agreement, EmblemHealth must reform its behavioral health claims review process, cover residential treatment and charge the lower primary care co-payment for outpatient visits to mental health and substance abuse treatment providers. EmblemHealth must also submit previously denied mental health and substance abuse treatment claims for independent review, which could result in more than $31 million being returned to members.

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