pills-384846_960_720-300x200-4567758In their latest response to the epidemic of opioid abuse, state lawmakers are indulging a habit-forming practice of their own: imposing mandates on health insurance.

The bills agreed to by Governor Cuomo and legislative leaders include some worthy measures, such as capping prescriptions of opioid pain relievers at a seven-day supply, down from 30. This is in keeping with guidelines developed by experts at the federal Centers for Disease Control.

Other provisions require better education of physicians and pharmacists about the dangers of overprescribing the heroin-like drugs, which is a major cause of rising addiction, overdose, and death rates.

But much of the legislation focuses on tying the hands of health plans in the name of expanding access to inpatient drug rehabilitation. Plans would be required to use state-approved guidelines for determining when inpatient rehab is necessary, barred from requiring authorization before check-in, and barred from doing any utilization review of such treatment for the first 14 days.

Under previous laws and regulations, plans are already required to cover inpatient rehab with no pre-established limit on the number of days.

The proposed additional mandates are based on recommendations from Cuomo’s Heroin and Opioid Task Force, which were published June 9, just four days before the bills were introduced.

In its report, the task force said it heard from providers that insurance plans were blocking, delaying, and interfering with their rehab work:

The Task Force heard from panelists and community members about insufficient access to treatment beds as well as barriers to accessible, effective treatment due to insurance delays or lack of coverage. Notably, more than fifty website submissions mentioned insurance coverage problems with respect to treatment. During a Task Force listening session, Kevin Connally of Hope House Inc. expressed concern about lengthy insurance approval timeframes. Torin Finver of Horizon Village Terrace House urged insurance companies to stop requiring prior authorizations for necessary medications, a position echoed by dozens of online comments that called for greater access to medication-assisted treatment. Stuart Rosenblatt of New Choices Recovery Center argued that New York needs more access to medically-assisted treatment in every community. Parents at listening sessions also requested the State to expand mandatory hold authority to get loved ones stabilized during times of crisis.

Missing from the report is any discussion of what new costs these changes would impose on health plans and, ultimately, their customers. Nor have the Assembly and Senate held hearings on the bills where that issue might be explored.

As with all such legislation, the mandates would apply primarily to policies purchased by individuals and small groups. Most large employers’ health plans are “self-insured,” which exempts them from state regulation under federal law. Self-insured plans covered just more than half of all New Yorkers with employer-provided insurance in 2011.

Inpatient drug treatment has been overused and even abused in the past. In 2007, the New York Times reported on the phenomenon of “frequent fliers,” addicts who would check into rehab repeatedly as a way of getting off the streets and, in some cases, reducing their tolerance for their drug of choice. State officials said the root cause was excessively high reimbursements for inpatient rehab by Medicaid, which encouraged hospitals to check in as many addicts as possible. The state responded by lowering fees for inpatient treatment and raising them for outpatient rehab.

Again, the task force report gives no consideration to the potential for abuse if health plans are required to cover 14 days of inpatient rehab before asking any questions.

The failure to weigh the costs and benefits of insurance mandates is a long-standing issue in Albany. Often, lawmakers rely on assurances from provider groups and patient advocates that the cost of a requested mandate will be negligible.

Taken together, however, they added 12.2 percent to the cost of a typical policy, according to an actuarial study commissioned by the Employer Alliance for Affordable Health Care in 2003.

Doing cost-benefit analysis of proposed insurance mandates is supposed to be the job of the state’s Health Care Quality and Cost Containment Commission, which was established by law in 2007. But governors and legislative leaders have never managed to fill all of their appointments to the body, and it has never met in the nine years since.

Helping to slow the creation of new mandates is the Affordable Care Act, which requires states to reimburse health plans for the cost of major new coverage requirements added after 2011. However, the opioid legislation, which tightens the rules surrounding an existing coverage requirement, is unlikely to be challenged under that provision.

More clearly running afoul of the ACA rule are other bills introduced this year, including proposals to mandate coverage for acupuncture and in vitro fertilization.

Despite the ACA rule, sponsors of the IVF bills simply state that the fiscal implications to the state would be “none.”

Sponsors of the acupuncture address the issue this way: “The State may be liable for any difference in premiums paid in the event that adding acupuncture as an essential health benefit creates an additional cost to plans. Given its relative cost effectiveness compared to other means of treatment, it could result in no cost/premium increases, or a reduction.”

Much the same claim was made when the Legislature passed a mandate for chiropractic coverage in 1997. But that law (for the first and last time in state history) required a study by the Insurance Department, which found in 2000 that chiropractic coverage added as much as 2.6 percent to premiums.

As of this writing, neither the acupuncture bill nor the IVF bill has moved out of committee.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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