(Updated 8:08 p.m.) The state Insurance Department announced Wednesday that Anthem Health Plans Inc. agreed to adjust its medical billing codes for behavioral health providers. The announcement comes less than two weeks after the American Psychiatric Society alleged in a class action lawsuit that the insurance company discriminates against mental illness through its billing practices.

Insurance Commissioner Thomas Leonardi said Anthem Health Plans, Inc. will reimburse behavioral health providers about $400,000 by adjusting 28,000 claims retroactively to Jan. 1, 2013.

“Through the department’s regulatory oversight of Anthem claims payment practices it was determined that Anthem had to revisit the way it was applying a new set of medical billing codes for reimbursement of claims and make the proper adjustments,” Leonardi said Wednesday. “As a result, the carrier has now provided the department with a remediation plan that will make the fair and correct adjustment for providers for all affected services on or after January 1.”

The insurance company will begin notifying affected providers on May 1 and will also explain the change in the billing code reimbursement procedure to its members. Leonardi said that Anthem has cooperated fully with the department throughout the oversight process, which began in early March after the department received a formal complaint from providers.

Conversations about the issue of the new billing practices began in January when the American Psychiatric Society asked the Insurance Department to get involved, according to the lawsuit.

Anthem told the Insurance Department that the new fee schedule and billing codes were only “representative” and that if a psychiatrist wanted he/she could submit a bill for a code not on their fee schedule, according to the lawsuit.

“This practice effectively requires preauthorization of psychotherapy for any patient seen by a psychiatrist where the patient’s plan does not otherwise require such preauthorization or alternatively, asks the psychiatrist to provide the service and then ‘roll the dice’ as to whether Anthem will pay. Either option results in impeding access to psychiatric care,” the lawsuit says.

In March, the American Psychiatric Association, Connecticut Psychiatric Association, and the Connecticut State Medical Society wrote to Anthem President David Fusco to explain that Anthem’s implementation of the codes violated “federal and state laws and that its failure to include appropriate psychiatric codes resulted in improper billing for services.”

According to the lawsuit, Fusco responded “by ignoring most of the facts and not providing the information requested. Instead, Mr. Fusco claimed that Anthem had loaded one missing code onto its system and that its reimbursement rates and manner of establishing them was otherwise fine.”

But Anthem maintained earlier this month that it was working on the issue and would be making changes to its fee schedule.

The American Psychiatric Association said those changes aren’t enough and don’t address the underlying complaint in the lawsuit.

“APA cannot assume that Anthem’s proposed solution complies with MHPAEA or that Anthem has ended its discrimination against those in need of mental health care and benefits that we alleged in our complaint,” APA Medical Director and CEO Dr. James Scully, said. “In our view, the press release is interesting in that there is much that it does not say; leaving many outstanding issues that need to be resolved before we can assure members and their patients that Anthem is not discriminating against mental health patients.”

“I have asked David Fusco, Anthem’s CEO, to provide answers to outstanding questions that appear not to have been addressed in this agreement with the Insurance Commission which we understand was reached without consideration of the federal law – MHPAEA,” Scully said.

At this point it seems as if the dispute between APA, the Connecticut Psychiatric Society, and the Connecticut Council of Child and Adolescent Psychiatry, and Anthem is not over, according to the APA press release. Whether Anthem and Wellpoint companies will continue their alleged violation of MHPAEA and discrimination against mental health patients is unclear.

The APA’s lawyer, Maria Pepe VanDerLaan, said she is still very concerned that the “deal” may be more than “an end run attempt to undermine my clients’ goal of protecting their members and their members’ patients from unlawful discrimination in the delivery of mental health benefits.”

“The barriers imposed by insurers to quality care are not unique to Connecticut,”  VanDerLaan said Wednesday, “We are very concerned that the issue of parity or equality between mental health and non mental health (medical/surgical) was not a matter of importance and was not addressed or achieved in the deal between the department and Anthem. As the APA release sets forth, there are many important questions that remain unanswered by Anthem and, until they are answered satisfactorily, my clients’ efforts are likely to continue.”