Parity and State Law Violations from Overly Stringent Mental Health Utilization Review Practices

$10,000-$25,000/year in staff time + revenue lag; potential loss of school district contracts if denial rates visible; regulatory complaints from schools if parity violations alleged • $100,000-$300,000+ per MAC region from: retroactive claim adjustments, beneficiary refund obligations, CMS audit response costs, MAC contract penalties, provider relation management • $100,000-$350,000 per carve-out vendor annually: forced re-review of 1-2 years of psychological testing and psychotherapy authorizations; reclassification and retro-payment of improperly denied claims; legal costs; staff audit of UM criteria against state parity standards; system reconfiguration to use nationally recognized clinical criteria (LOCUS, CALOCUS-CASII, ECSII per Colorado law)

Billing Specialist manually tracks denied/adjusted claims in spreadsheet; uses phone/email to contact UR Coordinator to understand reason for denial; delays claim submission or resubmits multiple times with different documentation hoping for approval; creates shadow file of 'problem claims' to monitor • Billing specialists maintain manual state-by-state UR requirement checklists, submit claims with hand-coded parity documentation, track denials by state/plan in Excel, email legal team alerts on regulatory changes, reprocess historical claims manually when regulations change • Billing specialists maintain school district claim tracking spreadsheet, submit appeals emphasizing student need/IEP alignment, coordinate manually with school administrators on claim status, re-code claims under different benefit categories