Excellent Proposal Tightening Parity Enforcement and Addressing wrongful Claims Denials
January 21, 2020
NYS Council members,
This is an incredible proposal. We must thank the Governor for putting it in play!
All those years when we fought so hard to compel the state to step up surveillance and enforcement activities around parity laws and BH wrongful services claims denials is paying off!
OMH and OASAS have been fighting hard and our colleagues in the Governor’s Office, at DoH and DFS really ‘get it’. Now we must ensure this proposal is untouched by those insurance plans that would prefer this all go away.
Memo of Support to budget language contained in Health and Mental Hygiene budget bill:
Part Z – Establish the Behavioral Health Parity Compliance Fund and Strengthen Efforts to Ensure Compliance with State and Federal Behavioral Health Parity Laws Purpose:
This bill would ensure health insurance plans follow existing State and federal behavioral health parity statutes by requiring the Department of Health (DOH) and the Department of Financial Services (DFS) to promulgate regulations to ensure such compliance.
The bill also establishes a new special revenue fund for the penalty fines levied on insurers for violations of current law to fund the New York State Behavioral Health Ombudsman program.
Summary of Provisions and Statement in Support:
Section 1 would add a new Section 344 to the Insurance Law (ISL), requiring DOH and DFS, in consultation with Office of Mental Health (OMH) and Office of Addiction Services and Supports (OASAS), to promulgate regulations by October 1, 2020 that require health insurance providers to provide mental health and substance use disorder coverage in a manner consistent with State and federal law. All fines levied against insurance plans for violations of existing Behavioral Health Parity statutes collected before October 1 would be deposited in the General Fund. All fine revenues collected on or after October 1 would be deposited in the Behavioral Health Parity Compliance Fund, created by Section 2 of this legislation.
Section 2 would add a new Section 99-hh to the State Finance Law (SFL) to create the Behavioral Health Parity Compliance Fund, a new Special Revenue – Other (SRO) fund for fines levied for violations of existing State and federal behavioral health parity laws. Moneys in this fund would be required to be used for initiatives supporting parity implementation and enforcement on behalf of consumers, including the New York State Behavioral Health Ombudsman Program.
Section 3 would amend Section 4414 of the Public Health Law (PHL) to add language establishing the same behavioral health parity regulation requirement in PHL that is established in ISL by Section 1 of this bill. Penalty fines collected by DOH for violations of the existing behavioral health parity laws would also be required to be deposited in the Behavioral Health Parity Compliance Fund established in Section 2.
Section 4 would establish an immediate effective date. This bill would strengthen the State’s efforts to ensure New Yorkers receive the coverage for mental health and substance use disorder services guaranteed to them by existing State and federal law. It would require the promulgation of a more forceful regulatory framework to address wrongful service claims denials by insurance companies, ensuring that coverage for physical health and behavioral health are equal.
This bill would also ensure that fines collected from insurance companies that violate State and federal behavioral health parity laws are used to help New Yorkers access the services and coverage they are legally entitled. DOH and DFS have authority under current law to issue financial penalties to insurance companies for federal or State behavioral health parity violations. This bill would direct those financial penalties to a special fund where they will be used for the existing Behavioral Health Ombudsman program and other efforts to ensure parity compliance. Budget Implications: Enactment of this bill is necessary to implement the FY 2021 Executive Budget, as it would create a new dedicated fund that will be used to finance efforts to ensure New Yorkers receive insurance coverage for mental health and substance use disorder services they are legally entitled to. Effective Date: This bill will take effect immediately.