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Parity for Mental Health Benefits
Class Action case enforces Parity mandate - 2019
March 2019: Wit v. United Behavioral Health
The US District Court for the Northern District of California
ruled that United violated the Parity provisions of ERISA.
United created guidelines which limited mental health benefits.
For example, it allowed acute or crisis coverage, but denied
maintenance coverage for mental health. Also, the guidelines
deviated from the Illinois requirement 215 ILCS 5/370c, that
only recognized Substance Abuse criteria be used instead of
United's guidelines. The judge also noted evidence that United
used the guidelines to reduce the expenses of impact of the
Parity Act. The next step in the lawsuit is to command the
proper remedy of United's breaches of duty, such as payment of
denied claims or an injunction prohibiting United to use its
guidelines. This case may also be cited in the future by
other courts. Of particular note,
185. One example that illustrates the heavy emphasis
that UBH places on financial considerations when deciding
whether Guidelines should be changed is UBH’s decision in late
2016 not to amend its Guidelines with respect to Applied
Behavioral Analysis (“ABA”), a treatment for autism
spectrum disorder. Although the Utilization Management
Committee had approved a Guideline broadening coverage of that
treatment, UBH’s CEO, Martha Temple, overruled the
recommendation, cautioning UBH staff, “[w]e need to be more
mindful of the business implications of guideline change
recommendations.”
New: Illinois adopts Mental
Health Parity in 2019
Section 370c.1 of the Illinois Insurance Code takes effect
January 1, 2019. This new law requires all health insurance
policies in Illinois to comply with the Mental Health Parity
provisions of
Paul
Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008, which is described below in earlier
posts. While the Federal Act applies to employer plans,
this new law will apply it to governmental and individual plans.
Parity applies to both quantitative
limits and nonquantitative limits:
"Treatment limitation" includes limits on
benefits based on the frequency of treatment, number of visits,
days of
coverage, days in a waiting period, or other similar limits on
the scope or duration of treatment. "Treatment limitation"
includes both quantitative treatment limitations, which are
expressed numerically (such as 50 outpatient visits per year),
and nonquantitative treatment limitations, which otherwise limit
the scope or duration of treatment. A permanent exclusion of all
benefits for a particular condition or disorder shall not be
considered a treatment limitation. "Nonquantitative treatment"
means those limitations as described under federal regulations
(26 CFR 54.9812-1). "Nonquantitative treatment limitations"
include, but are not limited to, those limitations described
under federal regulations 26 CFR 54.9812-1, 29 CFR 2590.712, and
45 CFR 146.136. (Examples of "nonquanitiative": medical
necessity determinations, prior authorization, step-therapy
requirements, formularies.)
Definition: "Mental, emotional, nervous, or substance use
disorder or condition" means a condition or disorder that
involves a mental health condition or substance use disorder
that falls under any of the diagnostic categories listed in the
mental and behavioral disorders chapter of the current edition
of the International Classification of Disease or that is listed
in the most recent version of the Diagnostic and Statistical
Manual of Mental Disorders.
Mandates: While there are many aspects of the law, some
of the provisions are:
(6.5) An individual or group health benefit plan amended,
delivered, issued, or renewed on or after the effective date of
this amendatory Act of the 100th General Assembly:
(A) shall not impose
prior authorization requirements, other than those
established under the Treatment Criteria for Addictive,
Substance-Related, and Co-Occurring Conditions established by
the American Society of Addiction Medicine, on a prescription
medication approved by the United States Food and Drug
Administration that is prescribed or administered for the
treatment of substance use disorders;
(B) shall not impose
any step therapy requirements, other than those established
under the Treatment Criteria for Addictive, Substance-Related,
and Co-Occurring Conditions established by the American Society
of Addiction Medicine, before authorizing coverage for a
prescription medication approved by the United States Food and
Drug Administration that is prescribed or administered for the
treatment of substance use disorders;
(C) shall place all
prescription medications approved by the United States Food and
Drug Administration prescribed or administered for the treatment
of substance use disorders on, for brand medications, the lowest
tier of the drug formulary developed and maintained by the
individual or group health benefit plan that covers brand
medications and, for generic medications, the lowest tier of the
drug formulary developed and maintained by the individual or
group health benefit plan that covers generic medications; and
(D) shall not exclude
coverage for a prescription medication approved by the United
States Food and Drug Administration for the treatment of
substance use disorders and any associated counseling or
wraparound services on the grounds that such medications and
services were court ordered.
New: January 16, 2013. Parity
regulations to be accelerated
For four years, the Federal administration failed to implement
regulations to make the Parity Acts effective. Today,
because of the unspeakable tragedies of gun violence, the
administration is finally working to make the rules final.
Because the rules can help those people with mental illnesses
get the mental health treatment necessary, the rules might
prevent gun violence in the future. It is a terrible
comment, though, that it took a tragedy to force the
administration to enact rules for a 2008 law.
The law was codified as 29 USC 1185, and the rules were
proposed in 2010, in 75 FR 5410.
The link to the temporary regulations is:
http://www.gpo.gov/fdsys/pkg/FR-2010-02-02/html/2010-2167.htm
October 2008: New Mental Health Parity Law is enacted
To see the text of the new bill, see the
information below.
To see the text of the current law, see the
information below.
Important points:
- In general the new law does not become effective to most plans
until 2010.
- The old law restricted some caps on coverage, but the new law
lifts caps, such as the number of visits per year payable and
the amount of copayment.
- The new law does not
require
employers to cover autism. Companies can choose which
disorders to cover or not cover. If autism is covered, and
if the treatment is covered, then the copays and visits will be
the same as for general medical claims. see next section.
- Out-of-network mental coverage will apply in the same way the
Plan covers medical out-of-network claims.
- Plans must supply the criteria for medical necessity
determinations.
- The Parity Act applies only to employers with more than 50
employees.
- Part (b) of the Act also applies the new rule to nonFederal
governmental employees (under the PHSA).
- Part (c) of the Act requires compliance for the plan to retain
taxfree treatment under the Internal Revenue Code
- Part (d) of the Act requires Secretaries of Labor, Health and
Human Services, and the Treasury to write regulations.
- State's mental health laws stay in effect if they are broader,
unless preempted by a self-funded employer plan.
- The law does not apply to nonemployer plans, which are
governed by State insurance rules.
New Mental Parity Law in 2008 - Autism not included?
September 25, 2008
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Congress is on the verge of clearing legislation to
require most employers and health insurers to put
mental-health on par with physical illnesses.
That includes coverage for hospital stays and doctor
visits, as well as co-payments and deductibles. Plans that
offer out-of-network coverage for physical problems will
have to add equivalent mental coverage.
But the legislation
doesn't specify what disorders must be covered.
Kathleen Mahieu, who heads behavioral health consulting at
benefit-consulting firm Hewitt Associates LLC, said there
is consensus that major problems such as serious
depression, schizophrenia and substance abuse should be
covered, but employers
differ whether to cover autism, attention deficit
disorder and some others. If coverage is rejected, the
legislation requires the health plan to explain why.
Still, patient advocates welcomed the changes. "This is
the biggest step we've ever taken in terms of integration
of mental illness into the larger health care system,"
said Andrew Sperling, director of federal legislative
advocacy for the National Alliance on Mental Illness.
Over the last 15 years, both the House and Senate had
passed different versions of the bill, only to see them
founder. This time, the bill has support of business and
insurance groups. On Tuesday, the House passed a
standalone bill and the Senate attached the same language
to a tax measure. Now, the two chambers must reach
agreement on how to pay the $3.4 billion cost over 10
years before lawmakers leave town.
The legislation doesn't require insurance plans sold to
individuals, employers with fewer than 50 workers, or
those that don't provide any health coverage, to offer
mental health coverage.
It applies to about 150 million people: 82 million in
federally regulated plans funded by employers, 31 million
in state-regulated plans and 36 million children and
adults covered by managed-care Medicaid programs, the
federal-state health insurance for the poor, a Senate aide
said.
The legislation ends such common restrictions as 30-day
hospital stays or 30 visits to a mental health
professional if the plan doesn't similarly curb treatment
for physical problems, Ms. Mahieu said. Reimbursement
rates for doctor visits or hospital stays must equal the
percentage paid for physical illnesses.
About one in four employers told a Hewitt survey they
already offer mental health parity, but it's unclear
whether their plans would meet the bill's requirements.
President Bush has signaled support; the legislation would
be put into practice nationwide by January 2010 if it
becomes law.
That will make a big difference for people like Loretta
Geyer, a 51-year-old social worker in Euclid, Ohio. She
said she spent $4,619 out-of-pocket on medical care last
year, mostly to treat her bipolar disorder. To save money,
she said she often waits to get treatment until her
condition worsens.
Her therapist doesn't accept insurance coverage, and Ms.
Geyer, who sees her often once a week, pays out-of-pocket
and then seeks reimbursement from her insurer, which pays
her for 40% of the first 10 visits a year after a $300
deductible.
Employees might find an increase in premiums or
deductibles because of the legislation. A survey by the
American Benefits Council, an industry group, found 39% of
large employers said they will charge employees higher
premiums, while one in four also said they would change
benefits or adjust total compensation, including slowing
down wage increases. One in 10 said they will do both.
http://online.wsj.com/article/SB122230728307674003.html
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Write to Jane Zhang at Jane.Zhang@wsj.com
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Comment: since most plans exclude habilitative treatment,
and whether to cover autism is up to the plan, most plans will not
cover autism even with this new Act of 2008. This effect
demonstrates that the community must insist, as explained on the
previous page, that Autism is
not a mental illness, and claims must be paid under the general
health coverage. Also, we must work to stop the
habilitative-rehabilitiave distinction.
back to AutismNews.net home
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October
5, 2008
The bill has been enacted into law.
The amendments include the following definition:
"(4) MENTAL HEALTH BENEFITS-
The term `mental health benefits' means benefits with respect to
services for mental health conditions, as defined under the
terms of the plan and in accordance with applicable Federal and
State law."
Thus, the Act does not define Mental Health, nor Mental
Illness. The employer's Plan does, although in accordance with
Federal and State Law. As stated in the previous comment, the
law in this Circuit is that Autism is not a mental illness, and thus
the mental illness restrictions should not apply. The law
still allows ERISA plans to exclude some mental illnesses
depending on how the plan defines mental illness.
Go to this page for the text of
Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008
Since this Act amends the 1996 act, it is difficult to read since it
changes text not appearing in the new Act.
The operative language is as follows:
(A) IN GENERAL- In the case of a
group health plan (or health insurance coverage offered in
connection with such a plan) that provides both medical and
surgical benefits and mental health or substance use disorder
benefits,
such plan or coverage
shall ensure that--
- (i) the financial
requirements applicable to such mental health or
substance use disorder benefits are no more restrictive than the predominant
financial requirements applied to substantially all medical
and surgical benefits covered by the plan (or coverage), and
there are no separate cost sharing requirements that are
applicable only with respect to mental health or substance use
disorder benefits; and
- (ii) the treatment
limitations applicable to such mental health or
substance use disorder benefits are no more restrictive than the predominant
treatment limitations applied to substantially all medical and
surgical benefits covered by the plan (or coverage) and there
are no separate treatment limitations that are applicable only
with respect to mental health or substance use disorder
benefits.
In addition, the antidiscrimination
regulation may apply. This regulation prohibits
employer-based plans from discriminating on the basis of health
factors.
The existing Mental Health Parity Act,
1996-2008:
The U.S Department of Health and Human Services describes the parity
law:
The Mental
Health Parity Act of 1996 (MHPA) is a federal law that
may prevent your group health plan from placing annual or
lifetime dollar limits on mental health benefits that are lower
- less favorable - than annual or lifetime dollar limits for
medical and surgical benefits offered under the plan. For
example, if your health plan has a $1 million lifetime limit on
medical and surgical benefits, it cannot put a $100,000 lifetime
limit on mental health benefits. The term "mental health
benefits" means benefits for mental health services defined by
the health plan or coverage.
Although the law requires "parity," or
equivalence, with regard to dollar limits, MHPA does NOT
require group health plans and their health insurance issuers
to include mental health coverage in their benefits package.
The law's requirements apply only to group health plans and
their health insurance issuers that include mental health
benefits in their benefits packages.
...
MHPA applies to most group health plans with
more than 50 workers. MHPA does NOT apply to group health
plans sponsored by employers with fewer than 51 workers. MHPA
also does NOT apply to health insurance coverage in the
individual market. But you should check to see if your state
law requires mental health parity in other cases.
An example of a coverage provision that
violates MHPA is as follows: Your plan has a limit of 60
visits per year for mental health benefits, along with a fixed
dollar limit of $50 per visit - a total annual dollar limit of
$3,000. It places no similar limits on medical and surgical
benefits. MHPA does NOT allow this inequality to exist for
group health plans covered by the law.
Group health plans may impose some restrictions
on mental health benefits and still comply with the law.
MHPA does NOT prohibit group health plans from:
- Increasing co-payments or limiting the
number of visits for mental health benefits;
- Imposing limits on the number of covered
visits, even if the plan does not impose similar visit
limits for medical and surgical benefits; and
- Having a different cost-sharing arrangement,
such as higher coinsurance payments, for mental health
benefits as compared to medical and surgical benefits.
http://www.cms.hhs.gov/HealthInsReformforConsume/04_TheMentalHealthParityAct.asp
Summary of 1996 Act : group health plans may impose some restrictions on
mental health benefits
Under current law, large group health plans may impose some restrictions on
mental health benefits and still comply with the
law.
MHPA does not prohibit large group health plans from:
• Covering mental health
services within network only, even though the plan will pay for
out of network services for medical/surgical benefits (although
with higher out-of-pocket cost to the
subscriber);
• Increasing co-payments or
limiting the number of visits for mental health benefits;
• Imposing limits on the
number of covered visits, even if the plan does not impose similar
visit limits for medical and surgical benefits; and
• Having different
cost-sharing arrangements, such as higher coinsurance payments for
mental health benefits, as compared to medical and surgical
benefits.
• Although the law requires
"parity," or equivalence, with regard to dollar limits, MHPA does
NOT require large group health plans and their health insurance
issuers to include mental health coverage in their benefits
package. The law's requirements apply only to large group
health plans and their health insurance issuers that include
mental health benefits in their benefits packages.
Some additional information:
• A visit limit coupled
with a usual, customary, and reasonable (UCR) charge is not the
equivalent of an annual or lifetime dollar limit. As a
result, it is not a violation of the MHPA requirements.
Payments made by the plan on the basis of UCR charges will vary
from one case to the next. What is not permitted is a limit on the
number of visits, together with a fixed dollar limit per visit,
for example, 60 visits annually at $50 per visit (totaling
$3,000), unless the medical-surgical coverage is the same.
• You may be in a network
plan that has an annual limit for mental health benefits received
out-of-network, with no limits for out-of-network medical and
surgical benefits. MHPA allows this as long as there is
parity between medical and surgical benefits and mental health
benefits received in the network.
• A large group health plan
(or health insurance coverage offered in
connection with a group health plan) is not subject to MHPA if the
application of its provisions to the plan raise costs by at least
1%.
If your large group health plan has separate dollar limits for
mental health benefits, the dollar amounts that your plan has for
treatment of substance abuse or chemical dependency are NOT
counted when adding up the limits for mental health benefits and
medical and surgical benefits to determine if there is parity.
An example of a coverage provision that violates MHPA is as
follows: Your plan has a limit of 60 visits per year for mental
health benefits, along with a fixed dollar limit of $50 per visit
- a total annual dollar limit of $3,000. It places no similar
limits on medical and surgical benefits. MHPA does NOT allow this
inequality to exist for large group health plans covered by the
law
Note: There are three exceptions
to the MHPA requirements:
• MHPA requirements do not apply
to small employers who have between 2 and 50 employees;
• Large group health plans that
can demonstrate that compliance with MHPA increases their cost by
at least one percent can notify their beneficiaries that MHPA does
not apply to their coverage; and
• A non federal government
employer that provides self-funded group health plan coverage to
its employees (coverage that is not provided through an insurer)
may elect to exempt its plan (opt-out) from most requirements of
Title XXVII of the Public Health Service (PHS) Act, with the
exception of requirements pertaining to the certification and
disclosure of an individual's creditable coverage under the plan.
Source: US Dept Health and Human Services
Full Text of ERISA Mental Health
Parity Regulations under the 1996 Act
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