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NY insurer to pay up to $31 mln for denied mental health claims

By Laila Kearney

NEW YORK (Reuters) - A New York-based health insurance company has agreed to reimburse members up to $31 million for previously denied mental health and substance abuse claims, the state attorney general said on Wednesday.

As part of a lawsuit settlement, EmblemHealth also will pay a $1.2 million fine for scrutinizing its members' mental health and substance abuse claims more than medical or surgical claims, in violation of local and federal laws, Attorney General Eric Schneiderman said in a statement.

"Insurers must comply with the laws – and they must treat people with mental health and substance abuse conditions as they do those with medical conditions," Schneiderman said.

Under the settlement, EmblemHealth will conduct an independent review of several thousand claims that were denied between 2011 and 2013 on the grounds they were medically unnecessary. The company also will pay restitution to any of the 15,000 members who were wrongly denied benefits, Schneiderman said.

EmblemHealth did not immediately return a call for comment on Wednesday.