Mental Health Parity and Health Reform
The Interim Final Rules on mental health parity were issued last Friday by the various agencies responsible for the administration of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The rules provide interim permanent answers to some of the interpretive questions raised by the MHPAEA. I’ll provide a couple of early reactions to the rules, and briefly describe why the parity rules in no way lessen the need for broader reform for the benefit of people with serious mental illness.
MHPAEA, effective for large (over 50) public and private health coverage for plan years beginning after October 3, 2009, adds substantial protections for mental health and substance abuse (MH/SA) coverage. For example, it:
- Prohibits covered plans from imposing deductibles, copayments, and out-of-pocket limits on MH/SA coverage higher than those imposed for medical/surgical coverage;
- Prohibits restrictions on days of hospital coverage and duration/scope of MH/SA treatment beyond limits imposed for medical/surgical coverage; and
- Prohibits exclusion of out-of-network coverage for MH/SA treatment if such exclusions do not apply to medical/surgical coverage.
Advocates have been looking to the rules for clarification of a number of ambiguities in MPAEA. Two clarifications in the published rules are encouraging.
- Should insurers be permitted to set deductible amounts separately for MH/SA? Some insurers require their members to meet two different deductibles — one for MH/SA, and one for other treatments. The effect is to permit members without behavioral health needs to experience, say, a $500 deductible, while people with behavioral and other health needs experience two such deductibles, for a total of $1,000. These rules forbid this double hit. The agencies acknowledged the lack of guidance in MHPAEA on this question, and the power of arguments on both sides, but explain their determination to enforce a unitary deductible:
Given that the statutory language does not preclude either interpretation, the Departments’ view is that prohibiting separately accumulating financial restrictions and quantitative treatment limitations is more consistent with the policy goals that led to the enactment of MHPAEA.
Translation: the act did not dictate a result, but unitary deductibles advance parity, and dual deductibles continue inequitable treatment.
- How will plans be prevented from continuing disparate treatment through less obvious means such as medical management decisions? Advocates have long been concerned that coverage inequities between behavioral and other health care could persist if aggressively restrictive utilization review systematically restricted MH/SA services under the guise of “medical necessity” or “medical management.” It is relatively easy to prohibit differential copayments and deductibles. It is harder — and more controversial — to attempt to monitor the relative equity of medical management techniques. The agencies have spoken pretty clearly on this issue in requiring equitable use of “nonquantitative” management strategies:
Any processes, strategies, evidentiary standards, or other factors used in applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification must be comparable to, and applied no more stringently than [those] used . . . with respect to medical/surgical benefits in the classification.
The tools must be comparable both facially and in application:
Thus, for example, assume a claims administrator has discretion to approve benefits for treatment based on medical necessity. If that discretion is routinely used to approve medical/surgical benefits while denying mental health or substance use disorder benefits and recognized clinically appropriate standards of care do not permit such a difference, the processes used in applying the medical necessity standard are considered to be applied more stringently. . .. The use of discretion in this manner violates the parity requirements for nonquantitative limitations.
Translation: the parity requirement for medical management is not one merely of form, but also of substance. While the enforcement of this substantive even-handedness may be messy, it furthers the principle of parity in a powerful way.
The parity rule, then, takes some strides toward the enforcement of true parity in health insurance for people with behavioral health needs. But people with such needs are desperately in need of further health reform for many reasons, a few of which are outlined below:
- Most obviously, people with serious mental illness are often unemployed or underemployed, and therefore are less likely to have employment-based health coverage. If they do not qualify for Medicaid or Medicare, they are often uninsured. Health reform extending coverage to the uninsured is therefore a pressing need for people with MH/SA needs.
- People with severe mental illness also suffer disproportionately from the effects of physical illness. As I’ve previously described, a 2006 National Association of State Mental Health Program Directors report titled Morbidity and Mortality in People with Serious Mental Illness revealed that people with serious mental illness die 25 years earlier than peers without mental illness, and suffer from a great deal of excess illness while alive. Most of the excess mortality and morbidity is due to preventable physical illness, and their poor medical condition is often traceable to poor coordination of their mental and physical care. The care coordination provisions in pending reform bills would go some distance in addressing these coordination and coverage concerns.
- The reform bills, in addition to mandating and facilitating the expansion of insurance, would channel at least much of the expansion through insurance exchanges. Although the proposals vary, exchanges could, as Tim Jost has described be a force for regularizing health plan design, and for promoting transparency in plan offerings for the benefit of all consumers, including those with MH/SA needs.
Our current health insurance system serves people with behavioral health needs rather poorly. The MHPAEA took beneficial steps for insured people with MH/SA needs, and the interim rules in at least some sections interpret the act rather robustly. This good news should not blind us to the fact that more comprehensive health reform is absolutely necessary to provide for the broad range of health needs of people with mental illness or substance use disorders.