One in 10 state residents who seek coverage for substance abuse treatment from their insurance company is denied, and the success rate for the few who appeal the decision is very low, says a new report from the legislature’s chief investigative panel.
In their report, members of the Program Review and Investigations Committee say lawmakers should require those deciding on insurance coverage to have expertise or a background in treating substance abuse. Current law is less stringent, requiring coverage decisions to be made by a licensed health care practitioner.
While it is unclear how frequently people without the background the committee deems appropriate are making decisions to deny coverage, once is too often, said Sen. Steve Cassano, D-Manchester. “It happens, and that’s the concern,” he said after the report was presented to the committee last week.
The report also notes that compared with neighboring states, Connecticut’s standards regarding who at private insurance companies can decide the appropriateness of coverage are more lax.
The report also recommends that coverage decisions be made within 72 hours, rather than the 15 days companies now have.
Those covered by Medicaid plans are told within one business day if they will be covered, and a psychiatrist, psychologist or addiction-certified doctor is required to make the coverage decision.
Denials are also more rare for Connecticut’s Medicaid enrollees. About 96 percent of claims are approved for Medicaid clients compared with 88 percent for private insurance companies. Insurance companies approve residential placement for enrollees in three of every four requests.
“Overall, what is required by state law does not match up well with what we found should be happening,” said Janelle Stevens, an associate analyst for the committee, who wrote the report.
While he supports stricter requirements for those making these decisions, Sen. Joe Markley, R-Southington, said he worries this would strain insurance companies.
Keith Stover, a lobbyist for the Connecticut Association of Health Plans, said he is unsure how frequently such decisions are made by those whom the committee would view as appropriate. But he said he is concerned with the burden such a requirement and time limits would impose.
“Creating artificially short, across-the-board time limits have the potential to be very problematic… Be careful what you wish for,” he said. “You are much better coming up with a consensus approach.”
But with the most recent federal survey finding that nearly one in 10 children in Connecticut ages 12 through 17, and one in four 18- through 25-year-olds, have abused or are dependent on alcohol or drugs, Stevens said research shows early intervention is the best approach.
“Many people need treatment,” she told the committee, noting that the overwhelming majority of adult addicts began abusing drugs when they were children. “Intervention that is early and effective can work.”
A lengthy process
Current state laws allow initial coverage determinations and the appeals process to drag on for almost a year.
This has been the case for Kelli Belardi, who is trying to arrange residential treatment for her son. Coverage was finally approved after he was arrested and committed to the Department of Children and Families.
She was relieved when he entered state custody. “It’s better than him killing himself,” Belardi said during an interview in September.
But her son will be released soon, and she’s unsure what to do if he needs help again because her insurance company is denying coverage.
Many children with private insurance enter state custody in crisis after an emergency room visit or after being arrested.
DCF pays millions of dollars each year to provide treatment for these children with mental illness and substance abuse issues, and 20 percent have private insurance. The Program Review and Investigations panel found that 10 percent of all government costs are directly related to substance abuse, as is a third of hospitals’ inpatient costs.
While the state has recently begun appealing coverage denials of those asking or demanding coverage from DCF in an effort to trim government costs, more can be done, the program review panel found. That includes requiring that whenever treatment is denied, the enrollee be told on that same notice that the state’s heathcare advocate will appeal the decison at no cost; the success rates of such appeals will also be provided. This would take the current state law that requires that denial notices include the healthcare advocate’s contact information two steps further.
The report found that 5 percent of the appeals filed with insurance companies succeeded in overturning the denial and that of the few people who appealed to the Connecticut Insurance Department, 40 percent of their denials were overturned.
“There seem to be a host of issues here that need to be addressed,” said Rep. Diana Urban, D-North Stonington.
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