Preparing for Parity

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The national mental health parity law is expected to serve millions of Americans, but there is much debate about how it will be carried out.

The federal mental health parity law is supposed to allow mental health services to be treated as equal to medical services in insurance coverage, but a complex series of regulations is making the transition difficult.

Over the months since the law took effect in October 2009, new regulations have trickled out, resulting in confusion, with insurers seeking coverage requirements that some experts contend are in conflict with the law. There have been reports of employers dropping out because of the regulations, which insurers acknowledge are confusing and challenging.

Specifically, the law establishes parity by requiring the same cost sharing and treatment parameters for mental healthcare services as for medical services. Any group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical coverage must treat them equally in terms of out-of-pocket costs, benefit limits, and practices such as prior authorization and utilization review.

The law greatly expands an earlier 1996 law that required parity only in aggregate lifetime and annual dollar limits between the categories of benefits. The new law applies to employers with 50 or more workers whose group health plans choose to offer mental health or substance use disorder benefits.

It has been unclear to insurers whether such practices as prior authorization and other utilization management tools are considered treatment limitations and therefore subject to requirements of the law, says Sharon Cohen, an attorney with Towers Watson's Research and Innovation Center in Arlington, VA.

In many ways, the legislation is going to require unique partnerships among and employers. "We've never seen that type of coordination, and I'm not sure the industry is ready for that," Cohen says.

Until all the regulations are worked out, the law requires good faith compliance. Among the problem areas prior to one new regulation was uncertainty over requirements for a single deductible for mental health and medical/surgical coverage. The regulation clarifies that a single deductible is required of the employer's health plan. However, an employer may attempt to take out a mental health benefit to avoid compliance with the new regulation or avoid mental health coverage within the plan.

"We remain fully committed to achieving the goal of mental health parity; however, we are concerned about some of the ambiguous elements of the regulations as well as those elements that may have unintended consequences," says Kate Prout, spokesperson for Aetna.

A point of controversy is that the regulations intend to ban insurers from differentiating between mental health care and general medical and surgical care in "non-quantitative" treatment areas. The non-quantitative treatment limits are those that pertain to the scope and duration of the covered benefits, how covered drugs are determined, and coverage of step-therapies.

Kris Haltmeyer, deputy executive director of legislative and regulatory policy for the BlueCross BlueShield Association, says insurers were surprised by the government's non-quantitative regulations.

"I think the provisions in the new parity regulation related to non-quantitative treatment limitations could increase the costs for purchasers—it's really the employer community that ultimately bears the cost," says Haltmeyer, who specializes in legislative and regulatory policy. "However, there is substantial uncertainty regarding these provisions. If they are interpreted as substantially limiting the ability to manage mental health or substance use services, the cost of implementing parity could be greater than originally expected."

Among the challenges posed in the new law is expansion of parity requirements for aggregate lifetime and dollar limits that include protections for substance abuse disorder benefits. Government officials acknowledged in the Federal Register that there have been opposing views about applying parity requirements, particularly related to deductibles. It said the "language of the statute can be interpreted to support either position."

Until insurers expressed concern over the regulations, money wasn't considered much of an issue. In evaluating the legislation, the Congressional Budget Office said premiums for group health coverage would increase less than 0.5%.

"There were people who felt insurers were not trying to comply with the law," says Haltmeyer. "That wasn't so. The insurance industry did not stand in the way."

Jan Berger, MD, chief medical officer for Silverlink, a healthcare communications company in Burlington, MA, says that over time regulations should be tightened to reduce the possibility of employers dropping out of insurance programs because of the parity law.

"If we can figure this out, I love this," Berger says. "I think there is a direct correlation between mental health and physical health."

Joe Cantlupe

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