We asked four experts what managed healthcare executives need to know about the mental health coverage requirements.
The Mental Health Parity and Addiction Equity Act of 2008 banned discrimination in the treatment of mentally ill patients, but many claim much more needs to be done to ensure these patients have access to the care they need.
“By maintaining compliance with the law and working with plan members to ensure that they understand their benefits and have the required information, health plans can provide value to their customers and be a part of a historic change in our nation’s healthcare system, ensuring that people have access to needed behavioral health services,” says Christopher Carroll, director of Healthcare Financing and Systems Integration at the Substance Abuse and Mental Health Services Administration.
To help ensure your plan is complying with the law and providing patients the care they need, we asked four experts what managed healthcare executives need to know about the mental health coverage requirements.
The Mental Health Parity Act of 1996 requires parity in annual and lifetime limits, meaning that in general, group health plans offering mental health benefits cannot set annual or lifetime dollar limits on these benefits that are lower than any such dollar limits for medical and surgical benefits.
The Mental Health Parity and Addiction Equity Act of 2008 expands parity requirements to ensure that treatment limitations (such as visit limits), financial requirements (such as copays) and in-and out-of-network covered benefits are on par with requirements and limitations on medical/surgical benefits. “These laws did not mandate the coverage of any specific mental health disorders," says Joel White, president of the Council for Affordable Health Coverage. "Instead, the laws require that if an insurer, covered by the law, covers both mental health and medical and surgical benefits, then they have to do so in compliance with parity requirements."
The Affordable Care Act (ACA) expands the application of the federal mental health parity requirements to certain types of health plans, and broadly mandates coverage of certain mental health and substance abuse disorder services specifically for Qualified Health Plans. “Plans that allow access to out-of-network providers for physical health issues must also provide out-of-network access for mental health,” says Jeff Strand, senior Medicaid information technology architect at Xerox. “Plans may no longer have hard limits on coverage, such as a certain number of mental health visits per year. Furthermore, if a patient was denied treatment for a mental health or substance use disorder, the insurer would have to explain why.”
“Benefit mandates generally increase overall healthcare costs. Simply put, when costs go up, costs are shifted to taxpayers or others, and coverage goes down,” White says. “Nevertheless, mental health is fertile ground in application of advanced care coordination techniques, including medication adherence strategies. Some view the parity and ACA requirements as opportunities to improve outcomes and to lower costs.”
The potential penalty for non-compliance with the mental health parity law is up to $100 per member per day.
"[The Department of Health and Human Services] has oversight responsibility over self-funded non-federal governmental plans,” says Paul Keckley, managing director of the Navigant Center for Healthcare Research and Policy Analysis. Departments of insurance are increasingly scrutinizing health plan filings for proof compliance with the 2008 parity law, he says.
“The law specifies that the treatment limitations can be no more restrictive than the ‘predominant’ treatment limitations applied to ‘substantially all’ medical/surgical benefits,” says Strand. “Likewise, financial requirements can be no more restrictive than the ‘predominant’ financial requirements applied to ‘substantially all’ medical/surgical benefits.”
#8. Substance abuse is not excluded.
Lifetime and annual limits are applicable to both mental health and substance abuse services provided, under the 2008 parity law.
That means that if a patient is denied coverage of sought after benefits, the health plan must make available to the patient the documented reason for the benefit denial of coverage. “There is increasing public demand that the criteria for medical necessity determinations with respect to mental health or substance use disorder benefits must be made available by the plan administrator or the health insurance issuer to any current or potential participant, beneficiary, or contracting provider upon request,” says Steve Melek, FSA, MAAA, principal and consulting actuary at Milliman, an independent actuarial and consulting firm.
“A plan could pass all of the quantitative testing requirements and fail by not having comparable non-quantitative treatment limits on mental health and substance use disorders,” explains Melek.
For the purpose of assessing Medicaid alternative benefit packages to ensure parity, the benefit classification does not differentiate in-network and out-of-network benefits. “This can be important in estimating the anticipated additional costs that a managed care organization can be expected to incur,” says Strand.
The 2008 law applies to every covered mental health and substance use disorder, including diagnoses such as bipolar disorder and nicotine addiction.