In the Pursuit of Mental Health Parity Insurance Coverage

BY GARRY CARNEAL, JD, MA

Treating diseases of the brain is as important as treating any physical ailment or condition. Yet, the health insurance industry in the United States has never covered mental health and substance use disorders (MH/SUDs) appropriately. As a result, depression, anxiety, addiction and other mental health conditions often go unaddressed, leading to poor clinical outcomes and increased spending on the medical/surgical side (aka physical conditions) of healthcare. The current high rates of suicides and overdoses in this country are evidence of our failure to properly acknowledge, prioritize and treat MH/SUDs.

As part of the effort to promote health equity, federal and state regulations have been adopted to promote additional “due process” protections for patients who have been denied care because an insurer will not authorize “medically necessary” coverage or otherwise make adverse benefit determinations. When someone needs treatment for MH/SUD, the last thing they or their family should have to worry about is an insurance coverage denial.

This article addresses two important issues:

1. Why MH/SUD insurance coverage is often deficient.
2. How the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (the Federal Parity Law) creates a framework to require insurers to level the coverage playing field between MH/SUD and medical/surgical conditions.

CASE MANAGER ADVOCACY

Case managers can and do serve a critical role in helping patients navigate through the complex web of the insurance system – in addition to creating a customized care treatment plan for the patients they serve. Unfortunately, without the aid of a case manager or advocate, patients are often left high and dry after an insurer denies the requested treatment.

When essential MH/SUD treatments are not covered by an insurer, this limits how case managers can manage their patients holistically, which includes addressing all of the co-morbidities of their patients including their psychosocial disposition. Case managers know the best population management strategies include addressing the patients’ “readiness for change” along with the individual’s mental health issues to optimize clinical outcomes.

LEVELING THE PLAYING FIELD

Several observations help explain why MH/SUD conditions have not been covered by insurers historically at the same level as medical/surgical care. For instance, MH/SUD treatment was often excluded from or limited within medical insurance policies as a way to contain cost. In some instances, MH/SUD care was treated as a carve-out benefit like dental or eye insurance, which created different rules of coverage. Limitations also were put in place because MH/SUD treatment: 1) Can be complex, involving chronic conditions; 2) often lacked evidence-based interventions; and 3) was sometimes delivered by ancillary medical professionals (e.g., non-MDs).

But in recent years, the MH/SUD coverage landscape has changed due to advancements in the treatment of MD/SUD conditions along with provider licensing and credentialing requirements. But old habits die hard, and insurers often continue to ration MH/SUD care in many ways. This is why The Kennedy Forum (www.thekennedyforum.org) and others have been actively promoting fair and equitable coverage in today’s insurance marketplace.

THE UTILIZATION REVIEW PROCESS

One of the most pervasive reasons why MH/SUD insurance coverage remains lackluster when compared to medical/surgical insurance coverage is due to utilization review (UR) programs (also known as utilization management). UR programs sponsored by insurers and third-party administrators (TPAs) are designed to assess the “medical necessity” of the recommended treatment. Although this peer review can be helpful to make sure the patient is getting the right care at the right time and at the right location, sometimes UR denials can hurt the best interest of the patient. Insurers and TPAs sometimes make flawed decisions by using improper UR guidelines or by adhering to a defective UR process. The internal and external appeal system often is not much help either in overturning the adverse determination. Part of the problem is UR regulations and accreditation standards have not kept up with certain key aspects of how UR programs are operated (e.g., meaningful oversight of how guidelines are developed and interpreted).

Several court actions are beginning to address these problems by ensuring UR programs follow “generally accepted standards of care” when making coverage decisions. In the 2019 landmark case Wit vs. United Behavioral Health (UBH), Chief Magistrate Judge Joseph Spero of the United States District Court for the Northern District of California found that UBH, the largest managed behavioral healthcare company in the country, developed review criteria for evaluating the medical necessity of claims for outpatient, intensive outpatient and residential treatment of MH/SUDs that were inconsistent with generally accepted standards of behavioral healthcare, and wrongly influenced by a financial incentive to suppress costs.

In a similar vein, the adverse determinations are sometimes made based on a faulty conclusion that the recommended treatment is not a covered benefit under insurance policy by the insurer or TPA. These denials are typically handled outside of the UR process and through a grievance review procedure appeal.

PROHIBITING INSURANCE COVERAGE DISCRIMINATION

The rise of MH/SUD conditions in the U.S. population, the advancement of MH/SUD evidence-based treatment, the feedback loops established by comparative effectiveness research, the opportunity for advanced care coordination and other factors have convinced legislators and regulators to take action in recent years to ensure we do a better job treating diseases related to the brain.

A prime example is the Federal Parity Law, which requires most insurers to provide the same coverage levels for mental health and physical health. Namely, MH/SUD services may not have higher co-pays, higher out-of-pocket costs, or different coverage limits from services for the treatment of physical illnesses. While the Federal Parity Law does not require health plans to offer coverage for the treatment of MH/SUDs, it does require many plans offering these benefits to ensure they are equivalent to the benefits provided for physical health.

INSURER COMPLIANCE

Nationally, the following types of health plans are subject to the Federal Parity Law:

• Group plans from employers with 51+ employees (both commercial and self-funded)
• Federal Employees Health Benefits Program (FEHBP) plans
• Medicaid managed care plans
• Children’s Health Insurance Program (CHIP) plans
• Most Union/Taft Hartley plans
• Some state and local government health plans.

The Patient Protection and Affordable Care Act (ACA) extended the protections provided by the Federal Parity Law to non-grandfathered:

• Individual (non-group) market plans
• Small group employer plans (from employers with fewer than 51 employees)
• Medicaid Alternative Benefit Plans (from the Medicaid expansion)
• Health plans purchased through a Health Insurance Marketplace (HealthCare.gov or a state-based exchange).

Thus, the number of health plans offering the Federal Parity Law protections today is far larger than it was when the law was originally passed. Furthermore, some states have enacted laws to provide additional protections.

However, not all health plans are required to comply with the Federal Parity Law. The following types of plans are not subject to the Federal Parity Law:

• Medicare fee-for-service or Medicare Advantage
• Medicaid fee-for-service plans
• Individual and group health plans created and purchased before the passage of ACA
• TRICARE/Department of Defense health plans (although similar protections have been adopted through separate regulations)
• Veterans Administration plans.

Additionally, state laws have also been enacted that write the Federal Parity Law into state statue or implement similar protections. For more information about state parity requirements, see www.paritytrack.org.

PARITY LAW REQUIREMENTS

When the MH/SUD benefits are compared to the medical/surgical benefits of a health plan, both quantitative and non-quantitative inequities may exist. Health plans subject to the Federal Parity Law and applicable state laws must treat care for mental health and physical health equally. If a health plan fails to do so, this noncompliance could be a parity violation. Two key parity terms are used to help measure compliance:

• Quantitative Treatment Limitations (QTLs) are limitations that are expressed numerically, such as day and visit limits, deductibles, copayment or coinsurance.
• Non-Quantitative Treatment Limitations (NQTLs) are limitations that are not expressed numerically but otherwise limit the scope or duration of benefits for treatment. NTQLs include but are not limited to:
  • Methods used by plans for determining usual, customary and reasonable charges
  • Use of fail-first policies or step therapy policies, in which higher cost therapies are not covered until a lower cost therapy has been shown to be ineffective
  • Exclusions based upon failure to complete a course of treatment
  • Restrictions based upon geographic location, facility type or provider specialty (such as the use of social workers)
  • Criteria that limit the scope or duration of benefits
  • Limitations on inpatient services for situations where the patient is a threat to self or others
  • Network adequacy.

Parity violations only exist if there is an inequity between MH/SUD and medical/surgical treatment services. For example, a plan that has a high deductible but counts expenditures on mental health and physical health equally toward the deductible is not a parity violation. Likewise, a health plan that uses similar fail-first policies for mental health and physical health is not a parity violation. Generally, if a plan applies a QTL or NQTL equitably between mental health and physical health services, then the insurance coverage complies with the Federal Parity Law and applicable state laws.

INADEQUATE ENFORCEMENT

It is the author’s opinion that most insurers over the past 10 years have not proactively configured their benefits to meet the baseline Federal Parity Law requirements – although this is now changing. In part, challenges to enforcement are tied to the complexity of how insurance benefit offerings need to be re-configured. Another complication is due to the fact that the MH/SUD benefits are sometimes offered through a third parity carve-out or administered by a TPA. As a result, multiple parties need to coordinate their efforts to create and implement a parity compliance plan.

Substantial variability also exists in how the Federal Parity Law is enforced. The Federal Parity Law decrees that states play the primary role in enforcing parity for state-licensed individual and group health plans, with the federal government stepping in only when states fail to comply. However, parity enforcement for self-funded plans is regulated by the U.S. Department of Labor, which represents the greatest number of beneficiaries protected by the Federal Parity Law. Other federal agencies responsible for parity oversight of other health insurance arrangements include the U.S. Office of Personnel Management (OPM) for Federal Employees Health Benefit plans and the U.S. Centers for Medicare & Medicaid Services (CMS) for the Children’s Health Insurance Plan.

This complicated regulatory landscape often causes confusion and accountability issues. Enforcement often only happens retrospectively when consumers file complaints to the applicable regulatory authority about an alleged parity violation rather than proactive enforcement strategies by the regulators. However, in recent years, enforcement has been picking up as highlighted in www.paritytrack.org. Over the past five years, for example, 10 states have implemented corrective actions against over 30 health plans and behavioral health organizations (BHOs) for parity violations and similar deficiencies related to the Federal Parity Law and applicable state laws. To date, the states have assessed over $31 million in fines and related payments for these violations, which helped fund mental health and substance use services. In addition, well over a hundred parity-related lawsuits have been filed, often leading to settlements benefiting consumers.

LEVERAGING PROTECTIONS

When trying to secure the right MH/SUD insurance coverage, case managers can take the following steps when appropriate:

• Knowledge Is Power. Become familiar with the type of insurance and policy itself (e.g., the summary plan description) for each patient to confirm the recommended treatment will be covered and at what levels.
• Filing an Insurance Appeal. When a denial of care takes place, work with the patient and ordering provider to file an internal UR appeal, grievance appeal and/or external appeal.
• File a Parity Disclosure Request. Request information about the insurer’s parity compliance activities proactively or as part of the appeals process. Recently, additional regulations have been issued detailing the requirements for insurers to proactively complete parity compliance analyses and disclose the applicable information to key stakeholders upon request including patients. Specifically, the federal law requires plans to make available these parity compliance analyses to plan enrollees (or their authorized representative) upon request within 30 days.
• File a Complaint. Let the applicable regulator know that the insurer or TPA is out of compliance with the applicable UR or parity laws.
• Become a Mental Health Advocate. Get involved with groups like The Kennedy Forum, your local chapter for the National Alliance on Mental Health Illness (NAMI), or similar group.

Feel free to contact the author if you have additional questions related to this topic at [email protected].

HELPFUL RESOURCES

Here are some important complimentary resources to help case managers when filing appeals and trying to leverage the Federal Parity Law:

• To track the latest trends in parity compliance, see www.paritytrack.org.
• To identify resources in your state, go to https://www.parityregistry.org/resources/ and click on your state. The state-by-state contacts can help you contact a regulator or consumer advocate.
• To read about how health insurers make coverage determinations and how the appeals process works, read The Health Insurance Appeals Guide: A Consumer Guide for Filing Mental Health and Substance Use Disorder (MH/SUD) Appeals (see https://schoonerstrategies.com/articles/publications/);
• To learn more about specific UR and related appeals regulations, check out www.regquest.com.
• To make a parity disclosure request, type in “DOL parity disclosure request” in your search engine or link to: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-disclosure-template.pdf.
• To file a parity complaint, contact the applicable regulator AND register the complaint on www.parityregistry.org.