California’s top health insurance authority faces mounting criticism and impatience from lawmakers and advocates who accuse the regulator of going easy on health insurers and failing to ensure they abide by a three-year-old law to provide timely mental health care to their consumers.
A barrage of complaints was lodged at an oversight hearing in Sacramento on Wednesday, just days after the Department of Managed Health Care relied on the same law to levy a historic $50 million fine against Kaiser Permanente for failing to provide timely mental health care.
“I know everybody’s framing this as ‘I’m in the hot seat,’” Mary Watanabe, director of the department, told the Senate mental health committee. “I’m happy to be here. This is an issue that is deeply important and personal to me.”
The Department of Managed Health Care oversees 96% of the state’s commercial and government health plans covering 30 million Californians. In 2021, a new state law took effect, SB 855, which was designed to curb insurers’ ability to deny mental health and substance abuse treatments for arbitrary or cost reasons. Instead, the law requires them to use clinical guidelines established by nonprofit health associations.
However, clinicians and health administrators testified in the Senate that health plans continue to violate the law. They said Anthem and other insurers were relying on unqualified doctors who ignored the standards set by the American Society of Addiction Medicine when deciding how long a person could stay in residential treatment.
“You can’t send a podiatrist to determine whether a stage 4 liver cancer patient needs chemotherapy,” said Joan Borsten, executive director of Summit Estate Recovery Center, which runs rehabs in Saratoga and San Jose. “It’s essentially what they’re doing.”
She gave the example of a 40-year-old man, a father of two small children, who came to rehab when his wife kicked him out of the house because of his alcohol addiction. After two weeks, two doctors working for Anthem, including a geriatric psychiatrist, reviewed the man’s medical record and said he had to go home.
“If I had left residential treatment early, I probably would have relapsed, lost my job and my family,” the man told his clinicians.
Borsten’s team helped the patient appeal the decision to state regulators, who overturned the denial, saying he needed to stay in residential treatment and the insurer had to pay for it. Anthem declined to comment.
Since the new mental health parity law took affect, about two-thirds of addiction and mental health treatment appeals had the same outcome, with the insurer ordered to pay for treatment it initially denied, according to state data.
This is a backward system, patients argued. They shouldn’t be forced to wade through layers of bureaucratic red tape, when they’re at the most vulnerable time in their lives, to get the treatment insurers should have granted in the first place.
“No one should have to have specialized knowledge to get basic access to health care that we deserve, let alone that we also pay for,” said Rebecca Farmer, a Kaiser patient who said she faced weeks-long delays and “obstacle after obstacle” trying to get care for major depression, anxiety and ADHD.
She struggled through multiple attempts to get help from regulators and ultimately found a therapist on her own, whom she paid $4,000 per year, out of pocket, for treatment.
“The recent settlement aside, the Department of Managed Health Care has been an absent regulator,” she said, “allowing Kaiser and likely other health insurance companies to effectively withhold adequate and timely mental health care when we need it the most.”