Carelon Behavioral Health must change how it connects New Yorkers with mental health care and reviews addiction treatment claims under two settlements requiring $2.35 million in penalties, fees and costs, plus restitution for eligible patients.
Attorney General Letitia James announced the agreements Nov. 10 after investigations found inaccurate provider directories and improper coverage denials. Carelon administers behavioral health benefits for about 4 million New Yorkers, including members of EmblemHealth, Anthem Blue Cross Blue Shield, Independent Health and the Empire Plan for state and local government employees.
The agreements establish up to $8 million for eligible claims involving patients who paid more for out-of-network care after they could not find an appropriate in-network appointment. Separate repayment requirements cover misleading network listings and certain improperly denied addiction treatment bills.
Carelon neither admits nor denies the attorney general’s findings specified in the agreements. The office found the company also violated obligations in a 2015 agreement.
Investigation found directories promised unavailable care
The attorney general’s 2023 secret shopper survey contacted 44 Emblem behavioral health providers in New York City whom Carelon listed as accepting new patients. Only eight offered appointments, leaving 82% effectively unavailable. The office found listings included unreachable providers, providers no longer practicing, providers not accepting new patients and providers outside the network.
In one case described by investigators, a person looking for a psychiatrist for a spouse called at least eight listed providers without success. About 25 additional names from Carelon did not yield an appointment, and Carelon’s own calls to 38 more providers also failed. The company nevertheless rejected the complaint as unsubstantiated because the member had not supplied the names called within 10 days.
A mother seeking a psychiatrist for her 14-year-old son waited months and needed the attorney general’s intervention before Carelon agreed to cover an out-of-network psychiatrist, the office said.
The directory agreement requires corrections within two business days after Carelon learns of changes, verification every 90 days and confirmation that a provider can accept and treat a member before a referral. Members and providers must have a way to report inaccurate listings.
Providers without claims in the past 90 days must be investigated and removed if their continued participation cannot be confirmed. Quarterly secret shopper surveys must count unanswered calls and unreachable providers, with results made public.
Settlement sets appointment and reimbursement protections
For commercial and state and local employee plans, the agreement requires immediate emergency care, urgent appointments within 24 hours, initial outpatient appointments within 10 business days and appointments within seven calendar days after hospital discharge or an emergency room visit. Medicaid standards include immediate emergency and inpatient services, urgent services within 24 hours and nonurgent care within seven calendar days.
If a member reports being unable to obtain a timely in-network appointment, Carelon generally has three business days to find an appropriate provider. Emergency and urgent cases cannot wait that long. If no appropriate provider is available, the member must be permitted to receive out-of-network care at in-network cost sharing.
Carelon must develop a recruitment and retention plan, reduce administrative burdens and invest in recruiting psychiatrists and psychiatric nurse practitioners who treat children and adolescents. An independent monitor will examine directories, appointment access, network breadth, reimbursement and compliance. The first compliance report is due nine months after the agreement’s effective date, followed by reports every six months, subject to the agreement’s termination provisions.
The directory agreement’s program requirements cover specified commercial, government employee, Essential Plan, marketplace, Medicaid managed care and Child Health Plus plans administered by Carelon. They exclude self-funded plans governed by the federal Employee Retirement Income Security Act; fully insured plans governed by that law are included.
Restitution eligibility reaches back to Jan. 1, 2020. For eligible network-access claims, an independent monitor will calculate excess out-of-pocket costs above in-network copayments, coinsurance or deductibles, plus 12% interest. If valid claims exceed $8 million, payments will be reduced proportionally. That fund is a cap, rather than a guaranteed payout of $8 million.
Eligible patients who paid extra because a provider was incorrectly listed as in-network are covered by a separate repayment provision that includes 12% interest. The agreement coordinates Emblem restitution with a separate Emblem settlement and excludes duplicate recovery. Notices will explain how eligible members can submit claims; the general claim window is 100 days after notices are mailed, with a separate additional-claim period for certain directory repayments.
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Addiction treatment denials must be reviewed and repaid
The second investigation found Carelon used unapproved medical necessity criteria in 41 of about 7,900 substance use treatment denials between 2015 and 2022. The agreement says Carelon admitted 21 instances. New York has required state-approved criteria for those reviews since 2017.
Investigators also found shortcomings in consideration of substance use histories, co-occurring psychiatric conditions and withdrawal symptoms. From 2019 through 2022, external appeals resulted in reversals of 17 of 24 Empire Plan denials, 27 of 50 Emblem denials and four of six MVP denials. Those figures concern appealed cases, not all coverage decisions; some reversals occurred before independent reviewers decided the appeals.
Carelon must use the Office of Addiction Services and Supports’ approved review tool, examine the full case file and seek missing information. It cannot require patients to fail at a lower level of care before obtaining rehabilitation, require a risk of serious harm as a condition of coverage, or minimize withdrawal symptoms when considering inpatient detoxification.
Eligible members who paid out of pocket or have unpaid bills for treatment after an improper denial dating to Jan. 1, 2020, must receive restitution. Carelon must notify potentially eligible members within 30 days of the Nov. 10 effective date; recipients have 60 days after receiving notice to document expenses or unpaid bills. The company must identify eligible members within 150 days and issue payments within 180 days.
The addiction treatment agreement includes $350,000 of the combined $2.35 million in penalties, fees and costs. The directory agreement accounts for the remaining $2 million.
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