Nevada Insurers Face Non-Compliance Issues with Mental Health Laws
The Nevada Division of Insurance has pinpointed several insurance providers, including United Healthcare and Aetna, for non-compliance with federal parity laws. These providers were found imposing prior authorization more frequently on mental health and substance use disorder (SUD) benefits than on medical/surgical benefits. Additionally, there were higher denial rates for out-of-network care in mental health and SUD claims, alongside lower reimbursement rates for providers in these specialties, according to a comprehensive report from the division.
Regulatory Compliance Breaches
Under federal parity law, insurers must not apply nonquantitative treatment limitations (NQTLs) to mental health or SUD benefits unless they use the same standards as for medical/surgical benefits. The report highlighted several instances where this compliance requirement was violated. For example, one insurer in Nevada required prior authorization for 22% of mental health and SUD benefits, while only 5% for medical/surgical benefits. Moreover, another insurer had a 16% denial rate for mental health and SUD claims, compared to a 6% denial rate for medical/surgical categories.
Network and Reimbursement Challenges
Out-of-network denials were significantly higher for mental health and SUD claims, with one carrier denying 37% of out-of-network mental health and SUD claims, in stark contrast to a 7% denial rate for similar medical/surgical claims. This disparity underscores network adequacy issues for mental health and SUD services, presenting significant access challenges for these treatments within the industry.
Further analysis revealed that reimbursement rates for mental health or SUD services averaged 14.3% lower than for equivalent procedures under medical/surgical codes. The report emphasized that the key issue is not just reduced income for providers, but also the inadequacy of reimbursement rates to cover operational expenses. This financial strain prompts many providers to opt out of network participation, limiting access to a comprehensive network of mental health/SUD professionals for consumers.
Addressing Non-Compliance and Industry Impact
The report also cited compliance violations from Sierra Health and Life Insurance Company, Molina Healthcare of Nevada, Health Plan of Nevada, and SilverSummit Health Plan. It advised these health plans and insurance carriers to review their data and NQTL compliance, ensure proper claim processing, and compensate affected consumers for losses incurred due to these violations.
Behavioral Health Business has reached out to the Nevada Association of Health Plans for comments but has not yet received a response. This regulatory situation highlights the pressing need for insurance payers and providers to address compliance issues promptly and effectively to ensure equitable access to mental health care.