Historic Mental Health and Addiction Parity Rules Finalized
Last Friday, the federal agencies charged with implementing the Mental Health Parity and Addiction Equity Act released their much-anticipated final regulations detailing how parity must be applied to insurance plans. Health and Human Services Secretary Kathleen Sebelius made the historic announcement at the Carter Center Mental Health Symposium in Atlanta, noting that 62 million Americans are expected to gain access to comprehensive mental health and addiction treatment benefits under the law.
The 2008 parity law required health plans that offer mental health and/or substance use benefits to do so without imposing copayments, benefit limitations, and other restrictions that are more stringent than those imposed on medical/surgical benefits. Interim regulations outlining parity requirements for employer-sponsored plans were issued in early 2010, but several critical gaps left consumers with many questions about their rights under the law and insurance companies unclear about how to bring their plans into compliance.
Final regulations strengthen parity protections
The new rules fill these gaps and reinforce the standards set forth in the interim rule. They prohibit insurers from imposing co-payments, coinsurance, or other financial requirements on mental health and substance use services that are more restrictive than those imposed on medical/surgical services. This basic parity test applies to “quantitative” benefit limitations – such as outpatient visit caps – as well as “non-quantitative” limitations like formulary design, medical necessity criteria, and prior authorization requirements.
Mental health and addiction advocates applauded several key points of clarification in the final rule:
- Scope of service: The rule extended parity requirements to intermediate levels of care (such as intensive outpatient, partial hospitalization and residential treatment) that were not addressed in the interim rule. The National Council and other advocates had expressed concern that without clear guidance, important services such as residential substance abuse treatment would not be protected under the parity law. Now, insurance plans must cover these intermediate care settings with no more restrictions than those imposed on inpatient or outpatient medical/surgical care settings.
- Standards of care: The interim rule had included an exception to the parity requirements when “clinically recognized standards of care” dictate a certain approach to behavioral health treatment that differs from medical/surgical treatment. Many of the comments HHS received about the interim rule expressed concern that this exception could be interpreted too broadly, having the unintended consequence of allowing discriminatory coverage of mental health and addiction benefits. The final rule removes this exception.
- Disclosure and transparency: The final rule strengthens Insurance companies are required to disclose in writing an analysis of how non-quantitative treatment limits (NQTLs) are applied on medical and behavioral conditions covered by the plan, including what processes, strategies, evidentiary standards and other factors plans use to apply NQTLs. During appeals, plans must provide claimants with the evidence used to make benefit determinations within 30 days of the request.
- Non-quantitative treatment limitations: The interim rule described certain NQTLs that were subject to parity requirements, leading some readers to believe that parity applied only to those listed NQTLs. The final rule clarifies that the parity law applies to all NQTLs, whether or not they are specifically listed. For example, plans may not impose geographic location, facility type, provider specialty or other limitations on mental health and substance use benefits unless they are imposed comparably on medical/surgical benefits.
Stakeholders applaud the final parity regulations
Mental health and addiction treatment providers and advocates praised the final regulations on Friday. “This is a huge victory for people living with mental health needs and for the nation as a whole,” said Linda Rosenberg, President and CEO of the National Council. “The full implementation of parity rules will move this country toward a more comprehensive approach to treating the whole person, mind and body.”
Parity and the Affordable Care Act will expand mental health and substance use coverage to millions
Although the 2008 parity law applies only to large-group insurance plans (for employers with 50 or more employees) and Medicaid managed care, the Affordable Care Act extended parity protections to the small-group and individual market, Medicaid expansion plans, and plans sold through states’ health insurance marketplaces. The ACA also instructed most insurance plans to cover mental health and addiction treatment services, which had not previously been required. Between parity and the ACA, now nearly all health plans must cover behavioral health services at parity with medical/surgical – a huge leap forward for a field that has all too often been poorly covered or left out of coverage entirely.
“This battle is not over”
Secretary Sebelius and other experts noted that the fight for parity is far from over. Friday’s final rule does not specifically apply to Medicaid managed care plans, Medicaid expansion plans (also known as Alternative Benefit Plans), and Qualified Health Plans sold through the insurance marketplaces, despite the fact they these plans are subject to the parity law. HHS had said that additional rulemaking is forthcoming.
Joe Parks, Chief Clinical Officer of the Missouri Department of Mental Health noted at the Carter Center Symposium that “this battle is not over” despite the “breakthrough” of now having final regulations. He urged attendees to ensure that consumers are educated about their rights under the law and that our delivery system has the capacity to support the millions of individuals who are newly covered for comprehensive behavioral healthcare.
The Parity Implementation Coalition, of which the National Council is a member, has created a toolkit to help consumers understand the parity law and walk them through the process of filing an appeal of benefit denials. Visit the Coalition website at http://parityispersonal.org/ to learn more and download the toolkits. The Coalition has also issued a fact sheet describing the details of the final regulation.