Three Mental Health Laws Healthcare Executives Should Know

August 13, 2018

Healthcare executives must understand mental health laws so they can do the right thing by their patients-and protect their bottom line.

Individuals diagnosed with mental health disorders can be extremely vulnerable to manipulation, physical and emotional abuse, and other violations of their basic rights.  That is why a variety of mental health laws are on the books, at the federal, state, and local levels. Yet, good mental health practice can be “shackled” by outdated or vague laws, says Lloyd I. Sederer, MD, adjunct professor at Columbia University Mailman School of Public Health. 

“Laws can protect but they can also interfere with patients getting what they need when applied senselessly,” he explains.  And it’s important, he argues, for healthcare executives to understand mental health laws so they can do the right thing by their patients-and protect their bottom line.

Here are three mental health laws that healthcare executives should know.

  • HIPAA

HIPAA mandates that personal health information remains private-and, given the stigma attached to many mental health and substance abuse disorders, it is crucial that providers only share behavioral health information in cases where it can benefit patient safety or treatment. 

Yet, Elyn Saks, founder and director of the Saks Institute for Mental Health Law, Policy, and Ethics at the University of Southern California, says HIPAA can limit access to important information that could inform care.

“There’s a lot of evidence with psychiatric illness that if your family is involved, you’ll have a better outcome,” she argues.  “But, at the same time, it should be up to the patient whether or not he or she wants family involved.  It’s difficult to make sure that privacy is maintained but the doctor can get information they may need for treatment.”
Sederer agrees.  “Families are often the best sources of information on an ill member, and even more generally the greatest sources of support for an ill member,” he says. “HIPAA is woefully outdated and is not as restrictive as it can sometimes be interpreted by clinicians seeking to avoid speaking with families.”

  2.  Involuntary Treatment and Commitment Laws 

Patients who have been diagnosed with a mental health disorder may not always want to comply with recommended treatments-even if those treatments may be in their best interest. And while studies show that mental health treatment is most successful when it is voluntary, there are some cases when involuntary care or even commitment may be warranted.  Sederer says it is important that healthcare organizations understand the specific federal, state, and community laws regarding these actions.

“All of these laws are poorly understood, highly varied in their interpretation and use from jurisdiction to jurisdiction,” he says.  “Add the pervasive stigmatization of mental and addictive disorders, and the scene is not pretty.  Commitment, for example, has reached such a high threshold for action that patients frequently ‘die with their rights on.’”

Sederer argues that it’s important to remember that laws were made to “serve the people.” And it is incumbent on healthcare organizations to take the time to understand when, where, and how these laws should be applied so they can offer the highest standard of care to mental health patients, while still respecting their rights.

  3.  The Mental Health Parity and Addiction Equity Act (MHPAEA)
The MHPAEA was passed to ensure that mental health is covered in a similar fashion to physical health costs. In fact, it requires that healthcare payers offer annual or lifetime dollar limits on mental health benefits that are equal to those offered for medical and surgical needs.  But Sederer says that mental health parity is still lacking across the United States.

“There is little enforcement and much financial benefit to payers when parity is defied,” he says. “But parity is an essential law that suffers from the stigmatization of mental health and addictive disorders since its support relies on the imperative on treating those conditions with equity.”

He says that parity is often discussed in terms of the quantitative aspects-annual or lifetime limits for care, copays, and deductibles-but healthcare executives should also vigilantly consider the law’s qualitative aspects.  After all, if a patient can’t find a provider in network, whether   insurance will pay for treatment is moot.

“Adequacy of professional network and range of services are important,” he says.  “Gains in qualitative parity have been far too limited.” 

Both Saks and Sederer say proper applications of mental health and addictive laws are critical to providing the highest level of care-and healthcare executives need to understand each of these mandates and how they apply to their organization.

“Ignoring the proper application of these laws means patients are denied needed services, languish on the streets and in prisons, fill emergency rooms, produce police and court burden, and create great financial and human suffering,” says Sederer. “As healthcare systems move away from volume-based payment to risk, they will see how doing the right thing legally and clinically in is their professional and economic interests.”