Transcript Mental Health Parity and Addictions Equity Act of 2008

Mental Health Parity and
Addictions Equity Act of 2008
The Law and Regulations
Bill Hudock
Special Expert – Financing Policy
Center for Mental Health Services
What Are The Key Concepts?
2

Parity – What Is It?

Why Does Parity Matter?

Who Does The Law/Regulations
Cover?

How Is Parity Determined?

How Is Parity Applied?

How Are Complaints and Appeals
Addressed?
What Is Parity?
Dictionary – equal or equivalent, at symmetry, not favoring
one over another, fairly matched
Parity As A Legal Construct:
A group of State Laws Beginning In the mid 1990s – Over Half of States
Have Some Form of Parity Law
1996 Federal Mental Health Parity Act:
Prohibit different annual and lifetime dollar limits
did not extend to substance use
2008 Medicare Improvements for Patients and Providers Act
By 1/1/2014 Phases out higher coinsurance for outpatient mental health care
2008 Federal Mental Health Parity and Addictions Equity Act:
Effective October 3, 2009
Regulations Effective As Policies Renew On/After July 1, 2010
2010 Health Reform Law Expands To Broader Population In 2014
Parity – Why Does It Matter?
Historical Discrimination
Additional Financial Costs
Annual and Lifetime Maximums on Benefits
Stricter Management of the Benefit
Medical Necessity
Treatment Limitations
Goal Of Parity Law Is To:
Increase Access To Treatment
Remove Discriminatory Financial Costs
More Equal Treatment For These Medical Conditions
Who Does The Law and Regulations Cover?
5

Employer Based Insurance of Groups Over 50 Lives which choose to offer both a mental
health or substance use condition benefit as well as medical/surgical benefits

111 Million Covered By Private Employer Plans

29 Million Covered By State and Local Government Plans

Medicaid Managed Care Plans, But Scope Unclear At This Time – 33.4 Million

Union Negotiated Plans and Some Government Plans (not Medicare, VA, Tricare, FEHBP,
Medicaid)

Through Health Reform Parity Protections Extended:

Individuals and Small Group Employer Plans Thru Exchanges – 2014 – 25 Million

Newly Eligible Medicaid Recipients Thru Benchmark Plans – 2014 – 16 Million

CHIP Enrollees – 2010 – 40 Million
How Is Parity Determined?
6
The
Law Stipulates:
 Covered
group health insurance plans that offer both
medical/surgical and mental health/ substance use benefits must
offer them at parity
Parity
Is Defined To Include:
 Financial
requirements including deductibles, coinsurance, copayments, and other cost sharing requirements, as well as annual
and lifetime limits on the total amount of coverage.
 Treatment
limitations include restrictions on the number of visits
or days of coverage, or
 Other
limits on the duration and scope of treatment.
Not Preempt Stricter State Laws – Impact on State Regulated
Insurance
Does
What Is Excluded From Parity Requirement?
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 The law does not require that an employer offer
mental health and/or substance use benefits
 The law permits an employer to limit the
diagnosis which will be covered
 The law provides a possible cost exemption:
If cost is more than 2% greater in first year due to
parity employer can request exemption for next year.
If cost in subsequent year is 1% greater due to parity
employer can request exemption for further year.
Regulatory Standards For Determining Parity
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The financial requirements (e.g., deductibles and co-payments)
and treatment limitations (e.g., number of visits or days of
coverage) that apply to mental health benefits or substance use
disorder benefits must be no more restrictive than the
predominant financial requirements or treatment limitations
that apply to substantially all medical/surgical benefits
Six Categories Are Established for Determination of Parity:
In Network Inpatient
In Network Outpatient
Out of Network Inpatient
Out of Network Outpatient
Emergency Services
Prescription Drug
Regulatory Standards For Determining Parity
MH/SUD benefits may not be subject to any
separate cost sharing requirements or treatment
limitations that only apply to such benefits
If a group plan provides for out of network
medical/surgical benefits, it must provide for out of
network mental health and substance use benefits
Standards for medical necessity determinations and
reasons for any denial of benefits relating to
MH/SUD must be disclosed upon request
Non Quantitative Treatment Limitations
Nonquantitative treatment limitations include
medical management, step therapy and preauthorization.
Processes, strategies, evidentiary standards, or other
factors used in applying the nonquantitative
treatment limitations to MH/SUD benefits to
MH/SUD in a classification are comparable to and
applied no more stringently than what is applied to
medical/surgical benefits except to the extent that
recognized clinically appropriate standards of care
may permit a difference.
Rule on Non-Quantitative Treatment Limitations
“A group health plan may not impose a nonquantitative treatment
limitation with respect to mental health or substance use disorder
benefits in any classification unless any processes, strategies,
evidentiary standards, or other factors used in applying the
nonquantitative treatment limitation to mental health or
substance use disorder benefits in the classification are
comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards, or other factors used
in applying the limitation with respect to medical surgical/benefits
in the classification, except to the extent that recognized clinically
appropriate standards of care may permit a difference.”
Illustrations Of Non Quantifiable Treatment
Limitations
• Medical management standards limiting or excluding
benefits based on medical necessity or medical
appropriateness, or based on whether the treatment is
experimental or investigative;
• Formulary design for prescription drugs;
• Standards for provider admission to participate in a network,
including reimbursement rates;
• Plan methods for determining usual, customary, and
reasonable charges;
• Refusal to pay for higher-cost therapies until it can be shown
that a lower-cost therapy is not effective (also known as failfirst policies or step therapy protocols); and
• Exclusions based on failure to complete a course of
treatment.
Examples Of Parity Issues
Quantitative Limitation:
• Plan limits the number of in network outpatient visits to a mental health
provider to 50 per year, but no such limit is applied to most
medical/surgical conditions. There are similar limits on physical therapy
treatments and chiropractic care.
• The plan is in violation. The predominant level of the limitation that
applies to substantially all medical/surgical benefits is that there are no
limits. The mental health limit is a greater limitation.
• NOTE: The law does not require that the limits be the same. It requires
that the limits not be more restrictive for mental health and substance use
conditions than they are for the predominant limitation that applies to
substantially all medical/surgical conditions within each category.
Examples Of Parity Issues
Non Quantitative Treatment Limitation:
• A group health plan limits benefits to treatment that is medically
necessary. The plan requires concurrent review for inpatient, in-network
mental health and substance use disorder benefits but does not require it
for any inpatient, in-network medical/surgical benefits. The plan conducts
retrospective review for inpatient, in-network medical/surgical benefits.
• The plan is in violation because:
– Although the same nonquantitative treatment limitation – medical necessity –
applies to both mental health and substance use disorder benefits and to
medical/surgical benefits for inpatient, in-network services, the concurrent
review process does not apply to medical/surgical benefits.
– The concurrent review process is not comparable to the retrospective review
process. While such a difference might be permissible in certain individual
cases based on recognized clinically appropriate standards of care, it is not
permissible for distinguishing between all medical/surgical benefits and all
mental health or substance use disorder benefits.
Examples Of Parity Issues
Non-Quantitative Treatment Limitation:
•
•
•
A plan generally covers medically appropriate treatments. In determining whether
prescription drugs are medically appropriate, the plan automatically excludes
coverage for antidepressant drugs that are given a black box warning label by the
Food and Drug Administration (indicating the drug carries a significant risk of
serious adverse effects).
For other drugs with a black box warning (including those prescribed for other
mental health conditions and substance use disorders, as well as for
medical/surgical conditions), the plan will provide coverage if the prescribing
physician obtains authorization from the plan that the drug is medically
appropriate for the individual, based on clinically appropriate standards of care.
The plan is in violation. Although the same nonquantitative treatment limitation –
medical appropriateness – is applied to both mental health and substance use
disorder benefits and medical/surgical benefits, the plan’s unconditional exclusion
of antidepressant drugs given a black box warning is not comparable to the
conditional exclusion for other drugs with a black box warning.
Appeals and Complaints Process
• Reasons for Denials must be provided
• Criteria for Medical Necessity Available Upon Request
• Appeals related to Fully Insured Plans can be directed to State
Insurance Commissioner
– http://www.naic.org/state_web_map.htm
• Department of Labor has primary federal responsibility
– http://www.dol.gov/ebsa
– Call toll- free 1-866-444-EBSA (3272).
• CMS has secondary federal responsibility
– http://www.cms.hhs.gov/HealthInsReformforConsume/01_Overview.asp)
– Call toll-free 1-877-267-2323 extension 6-5511
Issues Potentially Requiring Additional
Clarification
• Illustrate the application of the nonquantitative treatment
limitation rule to other features of medical management or
general plan design;
• Whether and to what extent MHPAEA addresses the “scope of
services” or “continuum of care” provided by a group health
plan or health insurance coverage;
• How to facilitate compliance with the disclosure requirement
for medical necessity criteria;
• How to facilitate compliance with MHPAEA’s disclosure
requirements regarding denials of mental health or substance
use disorder benefits; and
• Implementing the new statutory requirements for the
increased cost exemption under MHPAEA
Next Steps Regarding Parity?
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Lawsuit Sought Injunction – Not Granted
Regulations Effective On Renewal For Plans Beginning on
7/1/10
Good Faith Test Applies From 10/3/09 To Date
Regulations Are Effective
5443 Comments Received on Interim Final Regs.
Parity Study – 2012 Report to Congress
Drafting of Additional Guidance and Final Regulations
Advocacy for Expansion or Contraction of Construct of
Parity
Sources For More Information
• http://www.cms.hhs.gov/HealthInsReformfor
Consume/04_TheMentalHealthParityAct.asp#
TopOfPage
• Federal Register / Vol. 75, No. 21 / Tuesday,
February 2, 2010 / Rules and Regulations
QUESTIONS
AND
ANSWERS