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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?. Parity – What Is It? Why Does Parity Matter? Who Does The Law/Regulations Cover?
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? • 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
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 Who Does The Law and Regulations Cover?
How Is Parity Determined? • 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, co-payments, 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. • Does Not Preempt Stricter State Laws – Impact on State Regulated Insurance
What Is Excluded From Parity Requirement? • 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.
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
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 pre-authorization. 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 fail-first 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
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 Next Steps Regarding Parity?
Sources For More Information http://www.cms.hhs.gov/HealthInsReformforConsume/04_TheMentalHealthParityAct.asp#TopOfPage Federal Register / Vol. 75, No. 21 / Tuesday, February 2, 2010 / Rules and Regulations
QUESTIONS AND ANSWERS