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An health insurance provider in New York, MVP Health Care, denied numerous claims for people who had either substance abuse claims or mental health claims, refusing to pay out the benefits that should have been offered under the plan. In fact, when looking at the total amount of claims denied for these types of issues and comparing them to standard medical claims, it was found that there were 40 percent more denials for those who were attempting to get coverage for mental health and substance abuse. This is in direct violation of a 2006 law stating that the coverage must be the same for both types of claims.

In one case, a woman with a documented history of substance abuse filed a claim for benefits and was turned down, though she should have been covered. She still needed as much as $150,000 in treatment, which her family paid for out of their own pocket.

The result of the settlement is that the health care provider is going to have to send out the denied claims to an external office so that they can do an independent review of all of the denials. They will then determine which denials were made for the correct reasons and authorize payouts on the others. Depending on how many are paid out, it is projected that this could return as much as $6 million to the 500,000 people who carry the plan in the state.

When an insurance claim is denied, a person has a right to know why it was denied and to make sure that the denial does not break any of the local insurance laws.

Source: LongIsland.com, “AG Schneiderman Announces Settlement with Health Insurer that Wrongly Denied Mental Health Benefits to Thousands of New Yorkers” No author given, Mar. 20, 2014

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