Amit Kumar and his son, Ray, work on a do-it-yourself electronics project. Ray, who has autism, responded quickly to treatment, but the family’s health plan declined most coverage. The family moved in December 2021 to California, which regulates coverage more strictly. Photo courtesy Kumar family

Amit Kumar and his wife, Charu, were blissfully happy with their “perfect” 2-year-old son when a social worker told them something was amiss. Ray couldn’t follow a finger pointing across the room. As time went on, he had speech delays and severe social anxiety, got upset by loud noises and spent hours alone in a closet – classic symptoms of autism. They waited a year to see a Virginia developmental pediatrician who made the diagnosis official and recommended 40 hours a week of the gold-standard treatment for autism, a labor-intensive therapy known as Applied Behavior Analysis.

The family was pleased to find that the recommended ABA provider was in the network of the Anthem Blue Cross Blue Shield Plan they’d purchased and had treated other autistic patients covered by Anthem. But the plan declined coverage, saying ABA wasn’t a covered benefit. In the fall of 2020, the Kumars decided to pay on their own for 15 hours a week, knowing the therapy is most effective when started early.

By the time they cleared a months-long waiting list and started therapy, Ray was nearly 6. He improved quickly. “He started putting his mask on and would keep it on for the whole school day, which was a groundbreaking change for us,” Amit said, as Ray popped in and out of the webcam frame during a recent video interview, whooping with delight at the flood he’d created in the bathroom.

When an insurance agent told them a similar Anthem plan on the Obamacare exchange would cover ABA, they switched – but their insurance troubles were just beginning.

Not covered or not necessary?

First came a denial letter saying ABA was “not covered.” The insurer later changed course, saying the therapy wasn’t “medically necessary.” Neither the federal law nor a new Virginia statute that required individual-market plans to cover ABA seemed to matter. Anthem sent their attorney an internal document that explained the exclusion: In a nutshell, competitors don’t cover it and for Anthem to do so would be “price noncompetitive.” The Kumars would have to fend for themselves.

Inferior insurance coverage for behavioral health has persisted for decades. A federal report released in late January uncovered multiple examples of insurers failing to apply the same standards in covering mental health services as they do for medical and surgical treatment.

The report offered a glimpse into ongoing federal investigations of insurers and represented the first major federal effort to enforce a 14-year-old parity law that requires most insurers to provide comparable coverage for mental health services as for medical treatments. Broadly speaking, that means insurers can’t impose restrictions on mental health care that they don’t impose on medical and surgical care.

But while these investigations are ratcheting up the pressure on health plans, limits on regulators’ power may impede their impact. The government has no authority to impose fines on most health plans, and lawsuits in many cases can’t seek the big-money punitive damages that force billion-dollar companies to pay attention. State laws also vary widely, as the Kumars discovered.

“We were really exhausted with all this drama”

Amit Kumar

To cover Ray’s therapy, the Kumars went into their pockets for $25,000, while hoping Anthem would relent. The therapist, wanting to help the family, stopped sending bills. Last September, Anthem sent the family a letter approving treatment for all of 2021 but continued rejecting nearly all claims. The Kumars, worried they would eventually go bankrupt, moved to California, which has stronger parity laws.

“We were really exhausted with all this drama,” said Amit, a software engineer. This time, Aetna, the family’s employer-sponsored insurance provider, quickly authorized therapy.

Ray takes a break from rice and lentil soup, his preferred lunch. Ray, now 7, was diagnosed with autism. He can put a few words together but not speak in full sentences. Photo courtesy Kumar family

Anthem spokesperson Colin Manning told MindSite News that ABA is covered but said he couldn’t comment on an individual case for privacy reasons.

A rise in ‘deaths of despair’

The Covid-19 pandemic has brought the battle for mental health parity to a broader audience by exacerbating a national mental health crisis, especially for children and youth. The rise in “deaths of despair” caused by suicides and substance abuse accelerated, with fatal overdoses topping 100,000 for the 12 months ending April 2021, according to provisional data.

Some advocates see a pandemic silver lining: The inadequacy of mental health services has become undeniable, helping building momentum for parity.

Kennedy calls the battle for parity “a medical version of civil rights”

“COVID made this everyone’s issue because everyone was impacted mentally, even the mentally well,” said former Rep. Patrick Kennedy, who led the fight in the House for the Mental Health Parity and Addiction Equity Act of 2008. He calls the battle for parity “a medical version of civil rights.”

(Kennedy, who left Congress in 2011 and founded The Kennedy Forum to push for change in the mental health system, is a member of the MindSite News editorial advisory board.)

Carol McDaid, a Capitol Hill lobbyist who represents providers and advocates working for parity, calls the current system “irrational” because it withholds payment for early interventions that can help avoid catastrophic – and expensive – hospital stays. “Do we want to pay for a liver transplant?” she asks. “Or do we want to pay for a few weeks in a rehab?”  

Insurers often decline to pay a nutritionist to help a person with an eating disorder, but routinely cover them for people with diabetes, says David Lloyd, a senior policy advisor at The Kennedy Forum. They’ll pay for evaluations to determine whether a child has attention deficit hyperactivity disorder – but only if the exam results in a diagnosis. Advocates say that’s like health plans paying for biopsies only if they find cancer.

When commercial insurers do cover inpatient treatment for mental illness or addiction, lengths of stay are routinely cut short of doctors’ recommendations – something that happens far less frequently with life-threatening infections or cancer, says Lloyd.

Arthur C. Evans, chief executive officer of the American Psychological Association, is also puzzled by the penny-wise, pound-foolish approach. “A lot of studies show it’s $5 to $7” saved “for every dollar you spend on mental health services,” Evans said. “I’ve never quite understood why insurers don’t understand that.”

A 26-year push for parity

Federal parity legislation was first enacted in 1996 and expanded in 2008 to include substance abuse treatment. The 2010 Affordable Care Act made behavioral health coverage one of 10 essential benefits, extending parity protections to many more people. Last year, new legislation ordered commercial health plans to conduct compliance analyses and federal regulators to perform audits, leading to last month’s report. (See timeline on history of parity legislation here.)

The law has helped in some ways. The size of co-pays for covered mental health services are now similar to other care. But some services aren’t covered at all. And depending on where you live, finding an in-network behavioral health provider with openings can be nearly impossible.

A 2019 report by the health care consultancy Milliman found that insured patients went out of network for behavioral health care outpatient facilities nearly six times more than they did for medical/surgical facilities in 2017. For patients, going out of network means paying more, sometimes the entire bill.

People needing treatment for substance use disorders face even greater hurdles, says Stoddard Davenport, a health care researcher who co-authored the Milliman report. His team found that plan members went out of network for inpatient substance use treatment 10 times more than they did for inpatient medical care. And even when people used in-network providers for office visits, health plans paid behavioral health providers significantly less than primary care providers.

Incessant paperwork and low payment levels have led many psychotherapists to stop working with insurers. Seattle psychologist Samara V. Serotkin has dropped every insurance panel she signed up for over the past decade.

Seattle psychologist Samara V. Serotkin endured low reimbursement rates and numerous hassles before quitting insurance panels. Photo courtesy Samara V. Serotkin

A few years ago, she asked an insurance representative about a telehealth denial and learned that the plan didn’t cover telehealth but had overlooked the telehealth code she’d been entering on claims for years. The plan told her to collect back payments to give to the insurer. She refused.

“It almost put me out of business because for the rest of the year, every check I got from them was zero,” Serotkin said.

By last spring, she was down to one insurance panel. That’s when she read in a private Facebook group for therapists about money that had gone missing from bank accounts. Sure enough, a $626.85 reimbursement that Premera Blue Cross had deposited in her account electronically had been reversed without notification. Other therapists discovered larger withdrawals. 

Deposits and withdrawals

“They literally without telling me went into my bank account and took it back,” said a furious Serotkin. She filed a complaint with the Washington State Insurance Commissioner’s Office. The money was returned the following week.

Premera spokesperson Amanda Lansford said the insurer had been notified of “a security incident” and “took immediate steps out of an abundance of caution.” All monies were restored “as soon as the situation was resolved,” she said via email.

Another experience could have caused harm. A client, depressed and suicidal, was spending days at an outpatient facility and nights at home, and his condition was deteriorating. His health plan determined that two months in the day program was enough and stopped paying. The patient blamed himself.

“He said, ‘I failed at treatment. There’s no hope to keep living,’” Serotkin recalled. The insurer relented only after Serotkin and other providers raised a fuss.

Experiences like these have driven therapists out of insurers’ networks – even though federal parity rules make clear that plans “must” take steps to ensure they have an adequate number of behavioral health providers in their networks. One result is magnified inequity between patients who can afford to pay for mental health services and those who cannot.

“Where I live,” a therapist “could do a robust business without ever taking insurance,” said JoAnn Volk, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University in Washington D.C.

Insurance industry representatives say they are doing their best to provide comparable coverage.

“Many factors beyond a health insurance provider’s control contribute to out-of-network utilization of behavioral health care,” Kristine Grow, senior vice president for communications for America’s Health Insurance Plans, said in an email.

She noted that “there has been dramatic growth in the use of behavioral health services” since enactment of the 2008 parity law, citing an analysis by FAIR Health, a consumer nonprofit, that found the number of private insurance claims for behavioral health diagnoses more than doubled between 2007 and 2017.

The Blue Cross Blue Shield Association is “committed to complying with the law,” Kris Haltmeyer, vice president for policy analysis, said in a statement. “Patients deserve comprehensive health care that effectively addresses their physical, mental, and social wellbeing.”

A $15.6 million settlement

Several big cases have recently gone against the industry, especially its largest and most profitable player. UnitedHealth Group agreed in August to pay $15.6 million and to revise its policies nationwide to settle a case against its behavioral health unit.

Plaintiffs in the class action argued that United slashed out-of-network reimbursement rates for psychologists by 25% and for social workers by up to 35% compared with medical or surgical providers. A judge combined the case with state and federal lawsuits, and it became known as Walsh v. United Behavioral Healthafter Labor Secretary Marty Walsh, who has made enforcement of the parity law a priority and is open about being in long-term recovery from alcohol abuse.

In another class action, a federal judge ruled that United discriminated against mental health and substance abuse patients to save money. In his February 2019 decision in Wit v. UBH, Judge Joseph C. Spero of the district court in Northern California described United’s guidelines as “an abuse of discretion” that were “infected” by financial incentives intended to limit access to care. He ordered the company to revise its guidelines and reprocess 60,000 denied claims.

He also ruled that UBH, which was acting as a third-party administrator for a self-funded plan, failed its fiduciary duty. If upheld, it would be a major blow to claims administrators around the country. Most are units of major insurance companies and have long maintained that the employer, not they, is responsible for ensuring parity.

Even an appeals court reversal would be a win, said Brian Hufford, an attorney who represented the plaintiffs in both actions. He noted that United did not appeal the part of Spero’s ruling that its internal guidelines were contrary to generally accepted standards of care.

United did not respond to a request for comment.

The wins may lead to more private lawsuits. State insurance regulators also are stepping up enforcement, sometimes winning big judgments. “Momentum seems to have changed and pressure is being put on health insurers and claims administrators to put parity compliance as a critical goal,” Hufford said.

Six weeks after leaving Virginia in frustration, the Kumar family has settled into an apartment in Irvine, Calif. Cold weather no longer prevents Ray from going out for walks. He seems to love his school, literally running to classes.

His new ABA provider has also recommended five hours a week of speech therapy, which Ray will soon begin.

The best news in quite a while came the first week of February, when the Kumars learned that their old Anthem plan in Virginia agreed to pay for most of last year’s ABA claims. The reversal followed inquiries from MindSite News.

But some things never change: Ray is now on a waiting list for after-school ABA therapy. The Kumars expect that this time, their insurer will cover the costs.

Type of work:

Don Sapatkin is an independent journalist who reports on science and health care. His primary focus for nearly two decades has been public health, especially policy, access to care, health disparities...