MEMORANDUM IN OPPOSITION
FOR IMMEDIATE RELEASE: JUNE 10, 2014
Re: A.9943-A (Cusick )/ S.7662-A (Seward) – AN ACT to amend the insurance and the public health law, in relation to requiring health insurance coverage for substance abuse disorder treatment services and creating a workgroup to study and make recommendations.
This legislation, S.7662-A/A.9943-A, would require health insurance plans to cover additional days of substance abuse treatment services pending appeals. In its current form, the New York Health Plan Association opposes its passage.
Health insurers in New York cover treatment of substance abuse, both inpatient and outpatient. With the passage of the federal Affordable Care Act (ACA), there exists parity between substance abuse/behavioral health coverage and traditional medical coverage. Health plans must cover substance abuse treatment services in the same manner as they would cover any medical treatment. That means an individual who has a substance abuse addiction will be subject to the same medical necessity standard and appeals processes as an individual with cancer or heart disease. For substance abuse treatment, health plans use medical necessity criteria based on the American Society of Addiction Medicine (ASAM) and the New York Office of Alcohol and Substance Abuse Services (OASAS).
In 1998, New York enacted landmark legislation (Chapter 586) providing health plan enrollees with access to an independent external appeals process for plan denials based on medical necessity. Patients undergoing substance abuse treatment services and their treating physicians have the option of filing an appeal of any adverse medical necessity determination—just like a physician and/or his patient undergoing medical treatment. These appeals can occur before treatment services have begun, while receiving services, and retroactively after the coverage period has terminated. These appeals can be done on an expedited process and resolved within 24 to 72 hours.
Since its enactment, New York’s external appeals law has been nationally recognized as a model to address patient treatment decisions. According to the data from the state Department of Financial Services (DFS), health plan determinations for substance abuse services undergoing an external review are upheld in seventy-nine percent (79%) of the cases.
This legislation would mandate that health plans continue to provide coverage and reimburse substance abuse providers throughout the appeals process until all appeals have concluded. This would create a new mandated benefit for substance abuse services that does not exist for traditional medical coverage, and add additional service coverage for everything from inpatient rehabilitation to pharmaceuticals. With the enactment and ongoing implementation of federal health care reform, the Legislature needs to pay special attention to new insurance mandates that go beyond the “essential health benefits” (EHB) package established as part of the Affordable Care Act (ACA). The ACA also directs that any state health insurance mandate imposed after January 1, 2012, for purposes of the EHB will require the state to pay the costs associated with the new benefit.
The New York Health Plan Association represents 26 managed care health plans that provide comprehensive health care services to more than 7 million New Yorkers.
HPA also urges the following additional amendments to the legislation as currently drafted:
- The “immediate” effective date should be amended to “one year after becoming law” to permit plans and state agencies to adopt and implement needed regulatory, contractual and operational changes.
- Substance abuse treatment providers must provide at least 24 hours’ notice of intent to appeal to afford plans a day to make timely decisions.
- Substance abuse providers and health plans should both be required to follow the same approved ASAM-based criteria for treatment placement.
- The expedited appeal coverage should only apply to inpatient rehabilitation.
- The study workgroup should be charged with developing a publicly available “report card” of quality, safety and patient satisfaction measures and metrics for substance abuse treatment provider performance.
For these reasons outlined and absent needed amendments, the New York Health Plan Association opposes S.7662-A/A.9943-A.