Unfair treatment of mental health conditions and other compliance issues uncovered, must be corrected.

The Delaware Department of Insurance today announced the completion of its first follow-up Mental Health Parity and Addiction Equity Act (“Mental Health Parity”) examination, which also included reviews of complaint and grievance handling, policyholder services, claims, utilization review, and pharmacy review. The investigated insurer, Highmark, exhibited a number of violations that they have a corrective action plan to address, in addition to paying a fine of $329,000. Exams are in process, scheduled, or planned for additional health carriers.

“Our review, which included a comprehensive examination of multiple areas of the insurer’s operations, did reveal notable improvement in mental and behavioral health practices compared to prior evaluations. But intense scrutiny of insurers is still needed in order to foster fairness for Delawareans,” said Insurance Commissioner Trinidad Navarro. “Ensuring that mental health and substance use disorder benefits are provided on par with physical health benefits is a critical priority, and continued compliance monitoring will help to protect consumers and promote equity in health care access.”

Mental Health Parity laws, which exist both at the state and federal levels, aim to eliminate coverage discrimination between policyholders seeking care for mental illness or substance abuse and those seeking physical care. A lack of parity can prevent a person from pursuing needed care due to cost or limited access, or otherwise make it more expensive or more time intensive than medical visits. Department examinations are critical to uncovering parity issues as consumers may not be aware if they are experiencing disparate treatment when seeking care.

Delaware law requires insurers to report an analysis of its relevant mental illness and drug and alcohol dependencies benefits any year in which the design and application of medical management protocols change. The department can conduct an initial Mental Health Parity examination of each carrier, reexamine them based on this reporting or as part of their regularly-scheduled examinations, or initiate Market Conduct investigations based on consumer complaints.

In general, the violations found in policies and practices during this examination revolved around a lack of parity between mental health and medical/surgical procedures, medications, and preauthorization requirements. Mental health patients in some cases experienced a more restrictive policy criteria on related drugs, such as buprenorphine to treat opioid addiction and naloxone-based opioid reversal medications. It was noted that the carrier denied a member medically necessary treatment for drug and alcohol dependencies in an intensive outpatient program, and did not cover Methadone for Opioid Use Disorder across all plans for out-of-network providers/facilities. Substantial progress toward parity has been made since the initial examination on both pharmacy and non-pharmacy non-quantitative treatment limitations (NQTLs).

The examination reviewed activity over a roughly 15-month period, including reexamining prior areas of noncompliance, as well as the insurers’ oversight of contracted Pharmacy Benefit Managers (PBMs) and Third-Party Administrators.

Inclusive of this reexamination, Delaware insurers have been assessed a total of $1.66M since investigations began. These dollars go to the state’s General Fund.

Additional Findings

The Highmark examination included components of traditional, regularly scheduled exams in addition to the Mental Health Parity review. Findings included: noncompliance with complaint resolution notices and records; failure to complete prompt acknowledgement of, response to, and department notice of appeals, as well as timely provision of related documentation to the independent utilization review organization. They were also penalized for inaccurate Department of Insurance contact information on forms and notices, failure to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear, as well as violations relating to the length of and timely response to pre-authorization requests. A violation of in vitro fertilization coverage was also found, as were violations of step therapy exception laws. Investigators also found that Highmark failed to comply with HB 263 (2020) which caps consumer cost sharing for insulin drugs at $100 per month.

Positive findings of compliance were noted in areas including: complaint, grievance, appeal, and utilization review policies and procedures, second level appeals, policyholder services, chronic care management, insulin pump claims, and treatment of experimental claims.

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