In Plain English

In Plain English

Federal Mental Health Parity Final Rule Released—And Why That Should Matter to You

In the spirit of Thanksgiving, we thought we would start off this week’s blog with some pies.  Not as yummy as pumpkin, these pies are nevertheless worthy of your attention. In particular, you may notice that in 2005:

 

  • Mental Health Expenditures were less than six percent of All Health care spending;
  • Private Spending as a portion of spending on All Health was 28.6 percent higher than it was on Mental Health; and
  • Private Spending was the largest single source of funding for Mental Health care.

 

New Pie copy

Clearly, in both absolute and relative terms, private funding for mental health services is much less than private spending for somatic health; but it is, nevertheless, a vital part of the funding equation. This is why the Mental Health Parity and Addiction Equity Act (MHPAEA) is vitally important.  Passed in 2008, the Act seeks to reduce the disparity between physical and mental health insurance coverage. The Act applies to private and public health insurance plans, requiring parity in coverage of mental health and substance use disorder benefits with medical and surgical benefits.

As covered in our previous In Plain English blog, mental health parity stands for the principle that health insurance coverage for mental health care should be offered on an equal basis as coverage of physical health care, including medical and surgical benefits. At its very core, mental health parity champions the belief that treatment for mental illness is AS IMPORTANT to the overall health of a patient as is treatment for one’s physical wellbeing.

It is important to note that the MHPAEA does not require plans to include mental health and substance use disorder benefits. However, if a plan does include such benefits, the MHPAEA requires equitable coverage. Thus the MHPAEA, along with the Affordable Care Act, will help substantially expand the scope of federal mental health protections to cover approximately 85% of U.S. residents.

MHPAEA Implementation: Final Rule Issued

THE MHPAEA required the Department of Health and Human Services (HHS) to create regulations in order to help implement the act. This mandate went unfulfilled for several years, leading to significant confusion regarding the scope of the Act’s protections. In January 2013, President Obama pledged to issue a final rule on federal mental health parity requirements as part of his larger Now Is The Time platform to protect children and communities by reducing gun violence and expanding access to mental health services.

In an effort to follow through with this pledge, the Health and Human Service Department released the final rule on the MHPAEA on Friday, November 8th.

However, currently there are very few clear summaries of the final rule available to the public. At Young Minds, we strongly believe that it is critical for stakeholders to remain well informed of what services are available and how to access them in order to successfully advocate for themselves and their communities. We hope that the following summary by our Staff Attorney, Wesley Sheffield, will serve as an important resource for those who have struggled to find health coverage for much needed mental health services and supports.

  Summary of the Final Rule:

Equitable Coverage Within Benefit Classifications: The final rule establishes six classifications of insurance benefits. These include:

(1) Inpatient in-network benefits,
(2) Inpatient out-of-network benefits,
(3) Outpatient in-network benefits,
(4) Outpatient out-of-network benefits,
(5) Emergency care, and
(6) Prescription drugs.

The six classifications are intended to be comprehensive and include the full range of benefits that might be covered under a health plan.

Under the regulation, insurers are required to provide equitable coverage between MH/SUD and medical/surgical benefits that fall within the same classification. If an insurance plan offers MH/SUD benefits in any one of the six classifications, it must provide MH/SUD benefits in every classification in which medical/surgical benefits are provided.

Example: An insurance plan covers individual and group therapy for individuals with mental health and substance use disorders. This service falls within the outpatient in-network classification. The same insurance plan also offers a broad range of medical/surgical benefits in their network, including coverage for hospitalization, emergency room visits, and prescription drugs. These services fall within the inpatient in-network, emergency care, and prescription drug classifications. In order to comply with the new rule issued to implement the MHPAEA, the insurer would have to expand its coverage of MH/SUD benefits to include services in each of these three classifications.

Specific Equity Requirements:

  • Financial Requirements & Treatment Limitations: Insurers cannot impose a financial requirement or treatment limitation on MH/SUD benefits that is more restrictive than the predominant financial requirement or treatment limit applied to substantially all medical/surgical benefits in the same classification.

Example: An insurance plan requires a beneficiary to pay a $40 co-pay for prescription drugs used to treat MH/SUD conditions. The same plan requires a $20 co-pay for medications used to treat all other conditions, such as high blood pressure or diabetes. This inequitable treatment would violate the MHPAEA.

  • Cumulative Requirements: Insurers are also prohibited from applying separate cumulative requirements, such as annual deductibles and office visit limits, for MH/SUD benefits than those established for medical/surgical benefits within the same classification. Instead, the final rule requires health plans to allow both sets of benefits to accumulate jointly.  

Example: An insurance plan requires beneficiaries to meet an annual $2,500 deductible. The insurer is prohibited from requiring beneficiaries to meet a deductible for MH/SUD benefits that is separate from medical/surgical benefits. Instead, any costs expended by the beneficiary, regardless of the type of benefit, would accumulate towards meeting the $2500 deductible.

  • Non-Quantitative Treatment Limitations: The final rule also provides parity protections for treatment limitations that can’t be expressed quantitatively. Examples of these kinds of limits include requiring an individual to seek treatment within a specific geographic area or prohibiting services without prior authorization. These types of requirements are known as non-quantitative treatment limitations (NQTL). Because these limitations aren’t quantifiable, they are usually reflected in an insurer’s policies, standards, and processes for administering a plan benefits.

The final rule prohibits insurers from imposing a NQTL to MH/SUD benefits in a way that is more stringent than what is applied to medical/surgical benefits in the same classification. Insurers aren’t required to use the same NQTL for both sets of benefits, but “the processes, strategies, evidentiary standards, and other factors used by the plan or issuer to determine whether and to what extent a benefit is subject to an NQTL

[must be] comparable to and applied no more stringently for mental health or substance use disorder benefits than for medical/surgical benefits.”

Example: An insurance plan is prohibited from refusing to pay for mental health residential services received out of state if the same plan is willing to pay for any medical/surgical residential services regardless of geographic location within the United States. 

Specific Scope of Services Not Required: The final rule does not require a specific scope of services or continuum of care (types of treatment, treatment settings) that must be covered within the six main benefit classifications. The final rule only requires that insurers classify benefits in a comparable way: “In determining the classification in which a particular benefit belongs, a plan . . . must apply the same standards to medical/surgical benefits and to mental health or substance use disorder benefits.” In other words, when insurers are deciding which classification a benefit falls under, they must use the same or comparable decision points.

Example: A health plan decides to use the location of where covered treatment is delivered as a determining factor of how benefits are assigned within the six classifications. The plan considers treatments delivered in the beneficiary’s home as an outpatient benefit. In order to maintain compliance, the plan would need to assign any MH/SUD treatment delivered in the beneficiary’s home the same way it classifies medical/surgical benefits provided in the same location.

Increased Transparency: The final rule requires insurers and plan administrators to be more transparent in their decision making processes. Upon request from any current or potential participant, beneficiary, or contracting provider, a health plan is required to provide the criteria used to determine medical necessity for MH/SUD benefits. The final plan also requires insurers to provide the reason for any denial of reimbursement or payment for MH/SUD services with respect to MH/SUD benefits upon request from any participant or beneficiary.

For more information about mental health parity, check out these resources:

Disclaimer: The In Plain English segments and the YMAP Hear Me Out Blog are intended to be used for informational purposes only. The information provided should not be relied on as legal advice. 

By |2019-04-24T13:47:18-08:00November 26th, 2013|Featured Posts, In Plain English|0 Comments

About the Author:

Wesley Sheffield
Wesley Sheffield is an Associate Attorney at Young Minds.