This Can’t be Right: UBH/Optum Discontinuing Out of Network Benefits

UBH/Optum is discontinuing out-of-network benefits for some plans. Behavioral health services are affected, and medical services may be too.

In July 2021, UBH/Optum sent some providers a notice (the “Notice”) of plan changes, including one to exclude members’ out-of-network benefits for services located outside the member’s plan service area. Optum defines a “Fully Insured” plan as one where the insurer pays for the services and the member is not covered by a self-funded employer plan. The change would apply to medical and behavioral health services. At the time, services were already subject to prior authorization (the insurer’s approval before care begins). The change added a barrier to care.

The Notice specifically calls out behavioral health exclusions for non-emergent, sub-acute  inpatient or outpatient services received at any of the following facilities:  

• Alternate Care Facility – PHP or IOP  

• Freestanding Facility – Psychiatric or Substance Use  

• Residential Treatment Facility – Psychiatric or Substance Use  

• Inpatient Rehabilitation Facility – Psychiatric or Substance Use  

The Notice appears to be directed to in-network (“INN”) providers. The changes above would not affect services provided by INN providers. As we read the Notice, they can continue to admit and treat members of Fully Insured plans regardless of geography. The Notice advises INN providers that they may be asked to accept Optum members who are currently at out-of-network (“OON”) facilities. The Notice says coverage at those facilities will end once this change takes effect.

Optum frames the change as a “quality and cost-share” issue. The change applies only to Fully Insured plans, where Optum is “on the hook” for the cost of care. It does not apply to self-funded employer plans, where Optum only administers claims that the plans themselves ultimately pay.

As we read it, limiting the change to plans where Optum bears the cost of care points to cost-cutting.

Some behavioral health providers cannot secure contracts with payors like Optum despite their efforts. Others stay out-of-network because they do not want to accept the lower reimbursement rates the major payors demand when contracting to be an INN provider.

In our view, Optum’s new policy raises a possible parity concern under Mental Health Parity laws. The Notice appears to apply to both medical and behavioral care. In practice, the impact could fall disproportionately on behavioral health providers, especially residential treatment centers (“RTCs”).