Presentation to NAMI Indianapolis Annual Meeting

1. Presentation to NAMI Indianapolis Annual Meeting Andrew Sperling Director of Federal Legislative Advocacy andrew@nami.org March 2, 2010

2. 2010 Legislative and Political Landscape • 2nd year of the Obama Administration • Economy and double digit unemployment rate is dominating the congressional priorities • Health care reform is serious jeopardy • Mid-term elections looming • Major impact of Massachusetts special Senate election • Jobs legislation emerging as top priority • Major concerns with deficits -- proposed freeze for domestic discretionary spending, Administration appointed deficit reduction commission expected soon

3. NAMI’s Federal Legislative Agenda for 2010 • Health care reform – still alive? • Extended higher FMAP to address cuts at the state level • Parity implementation • Protect investment in research and increase Mental Health Block Grant funding • Housing -- fight cuts to the HUD budget, pass Section 811 reform and fund the National Housing Trust Fund • Pass legislation on restraint and seclusion in schools (HR 4247)

4. Health Reform – Process & Status • House passed HR 3962 on November 7, by a vote of 220-215 • Senate passed HR 3590 on December 24, by a vote 60-39 • National health spending will exceed $2.5 trillion (17.3% of GDP) in 2010, projected to climb to $4.5 trillion in 2019 • Public share of total health spending will exceed 50% in 2012 • Uninsured projected to reach 50 million by next year • Major impact of Massachusetts Senate election

5. Health Care Reform – What Next? • House could pass the Senate bill with a separate budget “reconciliation” package of improvements, • Separate “reconciliation” package limited to coverage expansion • Break up the package into separate consensus reforms • Medicare SGR physician payment fix • Repeal health insurance antitrust exemption • insurance market reforms (pre-existing condition exclusions, guaranteed issue, etc.), • health insurance Exchanges, • Medicare Part D coverage gap and other Part D reforms • Can small separate reform proposals pass the Senate? Would they work to bring down cost and expand coverage?

6. Health Care Reform – What Can NAMI Salvage? • Medicaid expansion for childless adults up to 133% (or 150%) with higher Medicaid match, • Medicare Part D improvements including filling the “doughnut hole” coverage gap and strengthening the “6 protected classes” requirement, • Ensuring a mental health benefit and compliance with parity for all plans offered through health insurance Exchanges, • Improving chronic care management and addressing medical co-morbidities • Authorizing the Medicaid demonstration initiative for acute inpatient care

7. Parity Implementation – the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 • P.L. 110-343, signed on October 3, 2008 • Attached to the financial market rescue and tax extenders legislation • Becomes effective in new group health plan years starting after October 3, 2009 • Expands the 1996 federal parity law and requires equity in coverage with respect to: • Durational treatment limits (caps on inpatient days and outpatient visits) • Financial limitations (higher cost sharing, deductibles, out-of-pocket limits)

9. What Does the New Law Apply To? • Group Health Plans and Health Insurers That Provide Coverage to Group Health Plans (employers with over 50 employees) • Medicaid Managed Care Plans • State Children’s Health Insurance Program • Non-Federal Governmental Plans • Federal Employees Health Benefits Plans

10. Parity in Group Health Plans • Includes both mental health and substance abuse “as defined by the plan” “in accordance with applicable federal and state law” • No preemption of state mandates or parity laws above the new federal standard • Small employer exemption for firms with 50 or fewer workers • Cost increase exemption available, unlikely to be used • Full parity will now reach more than 85 million covered lives in ERISA self-insured plans sponsored by firms >50 employees (v. less than 35 million in fully insured state regulated group health plans >50 employees) • For Indiana, 2.27 million covered lives in ERISA self-insured plans sponsored by firms >50 employees, 262,000 in fully insured plans >50 employees (over 1 million in firms <50 employees

11. Parity in Group Health Plans • Out of network requirement for mental health and substance abuse – Where offered on the medical-surgical side • Disclosure of plan information including medical necessity criteria for mental health and substance abuse • Biennial reports from the Secretary on compliance beginning in 2012 • Notice and Assistance – Secretary required to publish guidance on parity compliance and widely disseminate to employers, plans, NAIC, consumers, etc. AND provide assistance on continued operation of state laws • GAO report on coverage and exclusion of mental health and substance abuse benefits (including exclusion of specific diagnoses) – due in 2 years

12. What Does Parity Mean? • Mental health and substance use disorder benefits must by “no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan…” and “there are no separate cost sharing requirements than are applicable only with respect to mental health or substance use disorders benefits.”

13. Interim Final Rules • Regulations were published February 2 as “interim final” with a comment period (May 3 deadline) • Effective April 5 and will apply to group health plans with plan years starting on July 1 or later, • Plans that were charged with compliance for a plan year that began on January 1, 2010 will be given a good faith exception for compliance with the regulations until July 1, • NAMI National will be developing model comments.

14. Parity Regulations – Key Provisions • Clear definitions of “no more restrictive” than the “predominant financial/treatment limitations as applied to “substantially all” medical and surgical benefits – 2/3 of the entire medical-surgical benefit • Cumulative Financial Requirements:The IFR prohibits plans from instituting separate deductibles, co-payments, and out-of-pocket limits for MH/SU and medical/surgical benefits. Any deductibles, co-payments, and out-of-pocket limits required by the plan must be integrated and cumulative for all services

15. Parity Regulations – Key Provisions • Scope of Service -- Within 6 classifications, if a plan provides MH/SU benefits, those benefits must be provided at parity with the medical/surgical benefits provided in that classification: • Inpatient, in-network • Inpatient, out-of-network • Outpatient, in-network • Outpatient, out-of-network • Emergency care • Prescription drugs

16. Parity Regulations – Key Provisions • “Non-quantitative” treatment limitations -- The regulations provide new standards for equitable coverage for medical management, drug formulary design, step therapy, “fail first” policies and exclusions from coverage based on failure to complete a course of treatment. This means that the standards for equitable coverage will apply to discriminatory application of medical management techniques as applied to mental illness treatment.

17. Areas That Still Clarification in Future Regulations and Guidance • Preemption of State Laws • Cost Increase Exemption • Application of parity to Medicaid managed care plans

18. Parity – Compliance and Enforcement • NAMI National will be tracking stories – both positive and negative • Compliance and enforcement is across HHS, DoL, Treasury and state insurance commissioners • DoL – 866-444-EBSA • CMS – 877-267-2323, x61515

19. FY 2011 Budget - NIMH • $1.541 billion request, a $51 million increase above FY 2010, in line with the overall 3.2% increase proposed across NIH ($32.089 billion), • ARRA Stimulus funding -- $368 million, must be spent by the end of FY 2011 ($90 million to expand “payline”, $90 million for “challenge” grants and $67 million “grand opportunity” grants”) – major investment for RAISE study on first break schizophrenia

20. FY 2011 Budget -- Services • $25 billion to extend ARRA higher Medicaid FMAP for an additional 6 months • Proposed freeze for the Mental Health Block Grant at $420 million, • $5 million increase proposed for PATH (up to $70 million), • $5 million increase proposed for the Childrens Mental Health program (up to $126 million), • $13 million increase proposed for Projects of Regional and National Significance (PRNS), up to $374 million, including $7.5 million for a homelessness prevention initiative and $6 million for suicide prevention.

21. FY 2011 Budget - Housing • Major cut proposed for Section 811 -- $300 million FY 2010 appropriation would be reduced to $90 million with no funding in FY 2011 for production of new units, shift of renewal cost for 811 tenant-based to Section 8, • $2.055 billion request for McKinney-Vento homeless programs – more than a $200 million increase, $2.4 billion is needed for FY 2011 to accommodate changes in the HEARTH Act, • $85 million initiative at HUD for “special purpose” vouchers, including 4,000 vouchers for chronically homeless with linkage to SAMHSA services initiative

22. FY 2011 Budget - Veterans • $5.2 billion requested for VA mental health, an increase of $410 million (or 8.5 percent) over FY 2010, enabling expansion of inpatient, residential and outpatient mental health services, with emphasis on making mental health services part of primary care and specialty care, • VA budget notes that one-fifth of the veterans seen last year at VA medical and health clinics had a psychiatric diagnosis, the Department has added more than 6,000 new mental health professionals since 2005, bringing to 19,000 the number of employees dedicated to mental health care, • $4.2 billion requested to reduce and help prevent homelessness among veterans, including $3.4 billion for core medical services and $799 million for specific homeless programs and expanded medical care (with linkage to VASH).