How mental health insurance denials hurt CA addiction centers

The nation is in the midst of a mental health crisis with more people wanting help than can get it. That tension is reflected in a dispute playing out in the rural Sierra foothills between an addiction treatment center and California’s second largest health insurer. 

As CalMatters’ Jocelyn Wiener and Byrhonda Lyons explain, in June 2023, insurance giant Anthem told The Lakes Treatment Center that it planned to terminate certain in-network contracts. Located in the small town of Copperopolis, The Lakes is one of few treatment facilities serving people with Anthem insurance in the region, providing help for patients struggling with substance use disorder.

The Lakes’ founder and CEO, Bernadette Cattaneo, told state regulators she believed that Anthem wanted to sever ties because the facility had repeatedly requested appeals for Anthem’s claim denials — and won. In 2023, The Lakes’ clients won 49 of 54 appeals handled by a state agency. As a result, Anthem had to pay hundreds of thousands of dollars for alcohol and drug treatment.

Health care providers and patients face significant challenges with coverage for mental health and substance use treatment, even after California passed a landmark law in 2020 requiring health insurance plans to provide enrollees with all medically necessary treatment. 

The Legislature is currently considering a handful of bills to address some of these issues, including one that would require health plans to report data to the state about how often they deny treatment. Another would limit how frequently insurers can review patients’ eligibility for coverage. 

Mary Ellen Grant, a spokesperson for the California Association of Health Plans, an insurance industry association, told CalMatters that insurers take measures to safeguard against fraud. 

Anthem declined more than a half a dozen requests to answer questions from CalMatters, but in an emailed response, a spokesperson wrote that the company “is committed to ensuring our provider partners … are reimbursed properly and in a timely manner.”

Following Anthem’s termination notification, Cattaneo sued the company. Both parties will go into arbitration this fall, where the dispute will be handled outside of court. As of January 2024, The Lakes estimated Anthem owed it more than $400,000 in reduction or withholding of payments.

Read more here.

For the 2 million Californians enrolled in Covered California, health insurance is likely to get more expensive and more complicated due to policy changes included in President Donald Trump’s budget bill passed earlier this month, writes CalMatters’ Kristen Hwang.

Covered California is the state’s health insurance marketplace under the Affordable Care Act. The GOP-backed budget did not extend federal subsidies that were enhanced during the pandemic. Without intervention from Congress, these subsidies will expire at the end of this year, and premiums are projected to increase by $101 per month. For lower-income people, premiums would rise even more — an average of $191 more monthly — since they presently receive more subsidies.

Most Covered California enrollees are low- to middle-income, making $60,240 or less as individuals or $124,800 or less as a family of four. Besides higher out-of-pocket costs for customers, automatic re-enrollment will be eliminated; people who sign up outside the enrollment period won’t be able to qualify for financial assistance anymore; and certain immigrant groups, such as legal refugees, won’t be able to receive financial assistance.

Covered California estimates that 600,000 Californians will drop their insurance as a result of these upcoming changes. More than 170,000 middle-income enrollees will also lose financial assistance entirely.

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As California water districts work to meet new clean water standards, the Legislature is advancing a bill that would shield districts from legal liability against potential lawsuits, report CalMatters’ Ryan Sabalow and The Merced FOCUS’ Brianna Vaccari.

In April 2024, state regulators set a first-in-the-nation drinking water standard for hexavalent chromium, a chemical made famous by the movie “Erin Brockovich.” The chemical has been linked to cancer, and can occur naturally in some California groundwater, or be leached through as a contaminant from industrial sites. 

Water districts say that complying to the new rules would not only require tens of millions of dollars, it would also likely invite a great many lawsuits since they’d have to notify customers that they’re not meeting the criterion.

In response, Sen. Anna Caballero, a Merced Democrat, is pushing her bill that would exempt districts from being held accountable if they don’t yet satisfy the drinking water requirement — as long as they’re working on meeting the standard.

Read more here.

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