'Alarming': Report slams health insurers for ignoring mental health coverage law

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The U.S. Department of Labor found widespread noncompliance and violations of federal law in how health plans and insurers cover mental health care, findings that mirror a recent ProPublica investigation.

Health plans, and the companies that administer them, have excluded key behavioral treatments, such as therapies for substance use and autism, and offered inadequate networks of mental health providers, according to a 142-page report released Jan. 17 in conjunction with the Treasury and Health and Human Services departments.

The report, which the agencies are required to file regularly to Congress, also detailed the results of secret shopper surveys of more than 4,300 mental health providers listed in insurance directories and found an “alarming proportion” were “unresponsive or unreachable.” Such error-ridden plans, commonly known as ghost networks, make it harder for patients to get the treatment they need, ProPublica has previously found.

Since 2021, the Labor Department has addressed violations in health plans that serve more than 7 million people, according to the report. The agency has worked to remedy the problems by seeking changes to plan provisions, policies and procedures, as well as working to ensure wrongly denied claims were paid.

But the report acknowledged that while plans and insurers have made some progress, they continue to fall short. For instance, federal officials wrote that insurers were working faster to fix problems in their plans once they had been identified, but officials had not seen sufficient improvement overall.

The report examined the enforcement and implementation of the federal Mental Health Parity and Addiction Equity Act, which requires health insurance plans to provide the same access to mental health care as they do to medical care. Last week, on the same day the report was released, department staff told ProPublica that the agency was investigating issues related to our reporting.

ProPublica has spent the last year investigating how insurers interfere with mental health treatment, including employing aggressive tactics that push therapists out of network; deploying an algorithmic system to limit coverage; creating ghost networks; cutting access to treatment for children with autism; relying on doctors whose judgments have been criticized by courts; and using patients’ progress to justify denials.

The Labor Department regulates insurance plans for about 136 million Americans who receive health coverage through their employers and is responsible for enforcing federal protections around their mental health claims. Federal regulators have struggled to hold insurance companies accountable for improperly denying mental health coverage, in part because of staffing and budgetary constraints.

The agency has asked Congress for additional funding on multiple occasions and, in its most recent congressional report, wrote that the agency is left with one investigator for every 13,900 plans it regulates, a higher workload than in previous years. Some temporary funding runs out in September, and its “full depletion will likely have catastrophic effects” on its enforcement capabilities, according to the report.

Timothy Hauser, a deputy assistant secretary of labor, said in an interview on the day of the report’s release that the agency is investigating the oversight and management of doctors hired by insurance companies who repeatedly deny mental health coverage for patients — and may open additional investigations.

Hauser, who has worked at the agency for more than three decades and is staying on in the new administration, said the agency is probing how insurers use and supervise doctors they rely on to conduct reviews of coverage and whether those doctors review cases in a “fair and dispassionate” way. ProPublica’s reporting raised serious concerns around those issues.

Last month, ProPublica examined how insurance companies, including UnitedHealth Group, Cigna, and Blue Cross and Blue Shield, rely on doctors to make crucial decisions on whether to approve mental health coverage even after courts have criticized their judgment. Judges have ruled that in denying such coverage, insurers violated federal law and acted in ways that were “puzzling,” “disingenuous” and even “dishonest.”

Some insurers and doctors, according to court records, engaged in “ selective readings” of the medical evidence, “shut their eyes” to medical opinions that opposed their conclusions, and made critical errors in their reviews that were sometimes contradicted by medical records they had said they read.

Hauser said he could not comment on specific investigations but said that agency officials have discussed the ProPublica story, which he said “will have an impact on the questions we ask” and the “approaches we take.”

At least one investigation in the past has resulted in the removal of a doctor and the outside review organization they worked for, a spokesperson for the Labor Department said previously.

Insurance companies across the country rely on doctors working on their behalf to determine whether the treatment sought by the patients’ own doctors is medically necessary. If they determine it is not, they recommend denying coverage, which can leave patients in crisis and without the treatment they need. In some cases, those decisions have led to fatal consequences.

“It’s supposed to be done with impartiality and without having been structured in such a way as to incentivize the physicians to favor denying claims as opposed to granting claims,” Hauser said. “Similarly, the physicians and the providers should not be selected because of their propensity to deny claims.”

United, Cigna and Blue Cross and Blue Shield did not immediately respond to requests for comment but in the past have said they employ licensed physicians to conduct reviews and work to ensure the doctors issue appropriate coverage decisions. The companies have said they conduct regular audits of doctors’ decisions, provide mentorship and coaching opportunities and are committed to providing access to safe, effective and quality care to patients.

Hauser said he was struck by the story of Emily Dwyer, who was featured in a ProPublica article that examined the role of company psychiatrists. She was 15 and suffered from severe anorexia — she arrived at a residential treatment center wearing her 8-year-old sister’s jeans — when United Healthcare denied her coverage.

United argued that three separate doctors had reviewed her case. The Dwyers sued and lost, but appealed to the 5th U.S. Circuit Court of Appeals, which reversed that decision and ruled unanimously in favor of the family. In a harshly critical opinion, the judges wrote that the denial letters issued by the three doctors were “not supported by the underlying medical evidence.” In fact, the court found, they were “contradicted by the record.”

Dwyer, who was pleased to learn of the agency’s investigation, said she hopes it results in “substantive action.”

“I never would have thought that our story would be part of that,” she said. “I think it’s incredible that the Department of Labor is paying attention to this issue and is investigating the insurance doctors. But I also hope they look beyond the actions of the individual doctors to deeper issues of the way insurance companies operate more systematically.”