The new rule applies parity requirements to intermediate levels of care in residential treatment and intensive outpatient settings. It also clarifies that parity applies to limits on geography and types of facilities in provider networks and eliminates a provision that allowed insurance companies to make exceptions based on “clinically appropriate standards of care.” Other protections in the final rule require insurers to transparently disclose the rights of plan participants.
The law and the rule do not apply to Medicare and traditional state-run Medicaid, but the administration had previously instructed state officials that their Medicaid programs should meet the 2008 parity law requirements. The law does apply to Medicaid managed-care plans, though the administration is expected to issue separate guidance for those plans, said Chuck Ingoglia, senior vice president for public policy at the National Council for Behavioral Health.
“For way too long the healthcare system has openly discriminated against Americans with behavioral health problems,” HHS Secretary Kathleen Sebelius said on a call Friday with reporters. “We are finally closing these gaps in coverage.”
“The final rule provides a crucial step forward to ensure that patients receive the benefits they deserve and are entitled to under the law,” said Dr. Jeffrey Lieberman, president of the American Psychiatric Association. “In addition to providing equal benefits for mental illness as physical illness, I am hopeful that there will be strong monitoring and enforcement at both the state and federal levels.”
The National Institute of Mental Health has estimated that 26% of American adults experience a mental disorder in any given year and that an estimated 15 million receive mental health services. While such services represent a little more than 5% of the $2.6 trillion in annual U.S. healthcare spending, insurance coverage for these services has been limited compared with coverage for physical health services. Insurers often have questioned the medical necessity of such services.
Jamison Monroe, CEO of Newport Academy, an adolescent residential treatment center for mental health and addiction disorders in California and Connecticut, said the better insurance coverage for mental health services required by the new parity rule and the Affordable Care Act will make it more attractive for healthcare providers and investors to operate mental health facilities. Experts say many areas of the country are underserved.
But providers and advocates say the rule leaves gaps and lingering questions. “The work is just beginning now,” said Ron Honberg, national director for policy and legal affairs for the National Alliance on Mental Illness, a patient advocacy group. “The specifics of parity are going to be shaped over the next few years.”
There also are concerns that state insurance commissioners will have primary responsibility for enforcing the rules on commercial insurers and that they lack the resources and the political will to do the job.
The rule would apply to nearly all private insurance plans, including employer-based, group and individual plans but not to Medicaid managed care plans, which are the largest single providers of mental healthcare. The Obama administration has already issued guidance to states on how such plans should meet parity requirements.
“The (Medicaid) guidance wasn't as detailed as this rule is, so unless there's some way to link that guidance with this rule, we're not sure it's going to be as helpful as we had hoped it would be,” Honberg said.
The rule builds on a federal law that Congress passed in 1996 requiring parity in lifetime and annual benefit limits for mental health coverage. HHS received more than 5,400 public comments on its draft rule. President Barack Obama had promised that the rule would be issued this year. It was among 23 executive actions that his administration outlined to address gaps in mental healthcare highlighted in the wake of the mass shooting last December in Newtown, Conn. There is bipartisan agreement that better and more accessible mental healthcare services are needed to help prevent such incidents.
“This is another important step in building the foundation for ensuring that people have appropriate and adequate mental health and addiction coverage compared to what they have on the medical side of things,” said Mark Covall, president of the National Association of Psychiatric Health Systems.
Policy experts praised the final rules for providing greater guidance in several important areas. For instance, they make clear that insurers will be required to cover what are typically called “intermediate services.” That could include residential treatment or intensive outpatient care. “That's a big step toward leveling the playing field and making sure that people who have this coverage are getting all the services that they need,” Covall said.
In addition, the final rule provides more explicit instructions for insurers on what information they must disclose to subscribers about whether treatment is covered and under what conditions.