Watch out for stealth denials

In addition to discussing legal issues, I am also going to try to illustrate some of the managed care behavior that we are seeing out in the field.

One particularly troubling recent development is the use of stealth denials that never generate a denial letter or indeed any formal record at all.  The most common form of stealth denial is a decision that denies reimbursement for needed services but simultaneously authorizes a lower level of care or fewer units of service (for example, a facility calls to request residential addiction treatment, and the managed care company approves an intensive outpatient program).  These stealth denials can be difficult to spot (and even harder for regulators to track), because the written record will indicate only that care was approved.  All too often, facility personnel who are already stretched too thin simply accept the reduced care that is being offered.  To force this managed care stratagem out into the sunlight, treatment facility personnel need to remain singularly patient-focused, and need to ask the managed care company to cover what the patient needs.  Facility personnel also need to carefully document these requests in their records.

Providers should not, however, stop there.  Under the Affordable Care Act, there is a mandatory appeal process for any “adverse benefit determination,” and the term “adverse benefit determination” is a pretty broad one.  Basically, it includes any denial or refusal to authorize or pay for all the treatment that a patient or provider is requesting, and includes managed care decisions that authorize less than the amount of care requested.  It includes, in other words, stealth denials.  Both providers and patients have a right to challenge these stealth denials.  These denials need to be appealed, and appeal efforts need to be carefully documented.

Let’s Get This Law Enforced

Who is going to enforce the Mental Health Parity and Addiction Equity Act (“MHPAEA”)?  This is a pretty big question.

On paper the issue seems clear enough.  States have primary enforcement authority over health insurance issuers, with federal regulators stepping in if a State fails to enforce the law.  The Department of Labor’s Employee Benefits Security Administration (“EBSA”) has primary enforcement authority over the health plans of private employers, and the Department of Health and Human Services (“HHS”) has primary enforcement authority over the health plans of state and local governments.

But allocating enforcement authority between the States, HHS, and EBSA is turning out to be difficult, and with a couple of notable exceptions (most prominently California and New York), most State regulators are still cutting their teeth on MHPAEA enforcement.  The situation is not a whole lot better on the federal level:  we have not seen a lot of proactive activity, and HHS has expressly stated that the federal government may address identified violations by simply asking health plans to comply in the future.  That’s like a speeding ticket that consists of a polite request to not speed again — more a field day for dangerous drivers than a meaningful enforcement mechanism.

We can’t stand by and do nothing while our patients are harmed by unlawful conduct.  This blog will talk about some steps that providers and families can take to address MHPAEA violations and (just as important) protect vulnerable patients from MHPAEA violations.