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State regulators have alleged a series of mental health parity violations at Medica Insurance Co. and issued a $300,000 fine against the Minnetonka-based health plan.

The announcement Wednesday by the Commerce Department is the second action against a Minnesota health insurer this year over allegations that carriers are making it harder for mental health patients to obtain benefits than if they sought care for physical health problems.

Medica neither admitted nor denied the allegations — the same comment provided by Bloomington-based HealthPartners in a May consent order that included a $150,000 fine against the health insurer.

Medica will be subject to ongoing monitoring by the Commerce Department for a period of at least two years. The insurer is required to implement a corrective action plan and make what the state described as systematic improvements to its process for mental health coverage.

"Access to mental health care has never been more important," state Commerce Commissioner Grace Arnold said in a statement. "We are committed to removing barriers Minnesotans face when accessing mental health and substance abuse care."

In a statement, Medica said it is "committed to ensuring those who need mental health care have access to the providers and services that can best support their needs. We support the state's goal of mental health parity and are committed to working to ensure we're collectively supporting Minnesotans."

Parity laws prohibit health insurers from making it more difficult for patients to use their mental health care benefits than coverage for physical ailments. The laws have been around for decades in Minnesota and across the country, but regulators have struggled with enforcement due to the complexity of comparing access to mental and physical health care.

Increased regulatory action in Minnesota comes as the federal government also has stepped up enforcement activities. That includes a requirement for health insurers to conduct reviews that analyze mental health benefits and compare them with coverage for physical health care needs.

At Medica, Commerce alleged the health insurer's comparative analysis reviews weren't comprehensive and didn't comply with guidance and timeframes set by state and federal law.

Commerce claimed that Medica reimbursed medical/surgical providers at a higher rate than mental health and substance abuse disorder providers without sufficient analysis or justification. In addition, state regulators alleged that Medica:

  • Conducted certain utilization reviews disproportionately on behavioral benefits.
  • Utilized more stringent forms and requirements for behavioral utilization review.
  • Did not accurately record the number of requested and denied days for utilization reviews.
  • Did not or inaccurately documented utilization review data and communications.
  • Did not provide the member an appeal right for the denied units.

"Today's consent order benefits Minnesotans because it compels a large health insurer to make changes," Jacqueline Olson, the assistant commissioner for enforcement, said in a news release. "Those changes will expand access to mental health care in our state."

Medica agreed to informal disposition of the matter without a hearing, according to the consent order, which was dated July 3.

"Medica acknowledges that it has been advised of its rights to a hearing in this matter, to present argument to the commissioner, and to appeal from any adverse determination after a hearing," the order states. "Medica hereby expressly waives those rights."