Governor Hochul Announces $2.6 Million in Fines Against Insurance Companies for Failure to Adequately Cover Behavioral Health Services

Governor Kathy Hochul today announced more than $2.6 million in penalties against five Medicaid managed care health plans following a comprehensive review of their claims reimbursement for behavioral health services. New York State imposed these fines after carriers repeatedly and inappropriately denied claims or failed to pay for special behavioral health services at the rates required by law.

“No New Yorker should face unnecessary barriers to mental health care, especially if their insurance carrier fails to fulfill its legal obligation to cover these essential services.” Governor Hochul said. “My administration is committed to holding insurance companies accountable to ensure New Yorkers have access to the critical mental and behavioral health care they need.”

Fines are the result of Results of a health plan-focused study of behavioral health claim denials, a report compiled by the Office of Mental Health. Refusals were most often for care provided by Assertive Community Treatment; personalized recovery oriented services; Comprehensive psychiatric emergency care program, partial hospitalization; and adult behavioral health and community services.

The penalized companies include:

  • Affinity Health Plan, Inc., which was fined $349,500 for failing to provide adequate oversight of the delegated management function and failing to reimburse suppliers at the required rates.
  • Amida Care, Inc., which was fined $232,000 for improperly denying behavioral health claims and failing to comply with immediate payment requirements.
  • EmblemHealthon which a fine has been imposed $422,000 for failing to correct inappropriate claim denials and failing to pay claims at required minimum rates.
  • MetroPlus HealthPlan, Inc., which was fined $584,000 for non-payment of claims at the required minimum rates; and failure to reimburse providers at required rates.
  • MVP HealthPlan, Inc., who was fined $1 million for not paying claims at the required minimum rates and not reimbursing providers at the required rates.

The Office of Mental Health continuously monitors managed care organizations to ensure they are properly providing behavioral health services to their members. Focused studies identify issues that may require compliance monitoring and corrective action.

The agency worked in partnership with the New York State Department of Health to issue the regulatory act. The Department of Health has the statutory authority to impose fines and enforce compliance with the Medicaid program.

Mental Health Commissioner Dr Anne Sullivan said, “Managed health plans have a legal obligation to cover legitimate claims for behavioral health services and to reimburse that treatment at the rates prescribed by law. Companies that continue to ignore these regulations are imposing a huge barrier that ultimately discourages New Yorkers from getting the mental health care they need. New York State holds Medicaid insurers accountable, and those insurers who do not follow the law will face significant penalties.

Health Commissioner Dr James McDonald said, “New York State has implemented a strategy under Governor Hochul’s leadership that holds insurance companies accountable for not adequately covering behavioral health treatment. These penalties demonstrate a multi-agency approach to overcoming the obstacles New Yorkers face in getting the mental health services they need.

Under Governor Hochul’s landmark plan to improve the continuum of mental health care in New York, the state has taken several measures to ensure that New Yorkers are covered by their insurance when they access critical mental health care. The legislation, passed as part of the FY 2024 state budget, prohibits commercial insurance plans from denying coverage for medically necessary hospital services, including services to coordinate life-saving care.

Commercial plans are also now required to adopt hourly availability and geographic accessibility standards for behavioral health services and to cover all services provided by school mental health clinics. In addition, Governor Hochul secured legislation requiring providers to pay at least the Medicaid reimbursement percentage for care provided at these clinics.

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