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March 29, 2016 12:00 AM

States, plans get no flexibility under final mental health parity rule

Virgil Dickson
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    The CMS has finalized a rule that provides states and plans no flexibility in meeting requirements to provide Medicaid enrollees and children the same level of benefits for mental health or substance-abuse treatment that they provide for medical and surgical care.

    The final rule released Tuesday (PDF) applies provisions of the Mental Health Parity and Addiction Equity Act of 2008 to managed-care plans contracting with Medicaid and the Children's Health Insurance Program.

    It would ensure that beneficiaries have access to mental health and substance abuse benefits regardless of whether services are provided through the managed-care organization or another service delivery system.

    States and health plans currently can offer mental health services through prepaid inpatient health plans or ambulatory health plans. They've often placed limits on visits and services related to mental-health coverage. In many cases, coverage has been denied due to murky medical necessity rules.

    In a 2015 report, the National Alliance on Mental Illness found that private insurers were twice as likely to deny coverage for patients seeking mental health services than those seeking medical services.

    The new parity rule requires states to tell enrollees the reason for any coverage denials.

    HHS Secretary Sylvia Mathews Burwell said in a statement that the rule eliminates a barrier for millions of Americans who “for too long faced a system that treated behavioral health as an unequal priority.”

    The final rule is expected to benefit approximately 22.3 million Medicaid beneficiaries and 880,000 CHIP beneficiaries in 2016, according to the CMS. It will cost just under $1 billion in federal and state funds between 2016 and 2020.

    Among adults aged 18 through 64 with Medicaid coverage, approximately 9.6% have a serious mental illness, 30.5% have any mental illness, and 11.9 % have a substance use disorder. Among CHIP beneficiaries, approximately 8% of children experience serious behavioral or emotional difficulties.

    In comments sent to the CMS, states claimed the mental health parity rule prevents them from deciding how to operate their Medicaid programs.

    The CMS took issue with that argument. “We maintain that applying various parity provisions across the different delivery systems would allow states the most flexibility in designing delivery systems while ensuring parity in coverage of services provided to managed care organization enrollees,” the agency stated.

    Health plans had similar concerns. Medicaid Health Plans of America requested that managed-care organizations be able to require prior authorization to ensure the most adequate level of care. Patients may thrive if cared for in intensive outpatient programs, for example, instead of an emergency department. They want options to alternative methods for stabilizing a patient in crisis.

    The CMS again declined to offer the exception. “The factors used to determine whether and when the use of prior authorization is appropriate must be comparable and applied no more stringently for mental health and substance abuse disorder benefits than they are for medical/surgical conditions,” the agency said.

    When the rule was initially released, industry stakeholders were incredulous that it would improve care for beneficiaries since behavioral health providers tend to be reluctant to take any insurance much less Medicaid.

    And last month, a report released by the Health Care Cost Institute using claims data, showed that the parity law did not increase services used by patients with depression, bipolar disorder and schizophrenia. In fact, a year after the law passed, there was a significant decrease in the number of visits to psychiatrists and other mental health providers.

    The CMS struck back with other studies that show Medicaid coverage did improve access to care. In fact, this week, HHS used data that showed Medicaid improved behavioral healthcare services to entice Republican holdouts to expand Medicaid eligibility to more low-income adults.

    Still, advocates argue it'll take more than laws to address the mental health crisis in America. It'll take enforcement. According to a 2015 interview for a story published by the Pew Charitable Trusts, the Kennedy Forum, which promotes mental health parity, identified California and New York as being the only two states to enforce parity.

    According to the article, before allowing a plan to operate in the state, California regulators investigate whether the insurer meets parity requirements.

    New York state officials sued insurers after receiving complaints on the attorney general's consumer hotline from people who said insurers were denying mental health and addiction treatments.

    In August, a federal appeals court ruled 33 administrators of insurance plans could be sued over allegedly failing to meet parity law.

    The federal government can take funding away from states and plans found to be noncompliant.

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