The social and financial effects of these laws are also illustrated in the recent legal action taken by the State of New York against Value Options and two other managed-care organiza tions for alleged discrimination against patients who were wrongly denied benefits related to addiction and mental health after patients with diabetes were used as the comparators. The action was taken on the basis of the amount and extent of preauthorization required for the treatment of patients with substance-use disorder versus those with diabetes, the arbitrary and capricious manner in which the insurers stopped treatment, and the lack of treatment alternatives offered or even suggested to patients.56 The settlement has not been contested, and the organizations stopped their discriminatory preauthorization procedures. A similar suit has been filed in California.
