When the Wellstone-Domenici Mental Health Parity and Addiction Equity Act passed in 2008, the behavioral health industry celebrated an important, but short-lived legislative victory, followed by a year of wrangling and months of delay as regulators detailed the rules needed to implement the Act in the field. As the Act's interim final rules hit the street in January, the parity battle is beginning anew, albeit in its final phase.
“What is becoming clear to most of us is that we have to be in this for the long haul,” says Ron Hunsicker, CEO and president of the National Association of Addiction Treatment Providers (NAATP). “What we have now is a piece of civil rights legislation that can hopefully be used as the basis for other legislation moving forward.”
Parity regulations due from the U.S. departments of Health and Human Services, Labor, and Treasury in October 2009 were delayed until this month, largely because of the wide divergence in interpretations of the Act that emerged during the public comment period.
“When regulators asked for input last May, there was an assumption that this would be simpler than it turned out to be,” says psychiatrist and independent healthcare consultant Henry Harbin, MD, who formerly served as the director of Maryland's State Mental Health Authority and as the CEO of both Greenspring Health Services and Magellan Health Services. “They received complex and disparate responses, and they are taking longer to think this through.”
The delay prompted an exchange of letters between both houses of Congress and HHS Secretary Kathleen Sebelius that reinforced the urgency and importance of these rules to both parity and healthcare reform in general.
“The regulations that will make or break parity will be these regulations and the degree to which the federal government enforces them,” says Ron Manderscheid, executive director of the National Association of County Behavioral Health & Developmental Disability Directors (NACBHDD). “You can have a wonderful set of regulations, but if they aren't enforced it will not make any difference.”
Everyone-benefit managers and providers are watching closely to see how the regulatory agencies interpret several sections of the original legislation.
“The parity law really addresses equity on durational and financial limitations of coverage,” says Andrew Sperling, director of federal legislative advocacy for the National Alliance on Mental Illness (NAMI). “What we're worried about is whether there will there be aggressive efforts on the part of some health plans to skirt the law outside of the context of these two requirements.”
Employers, payers brace for change
Because 2010 benefit plans had to be completed before the release of parity implementation rules, insurance companies and employers have had to guess how to implement parity in their plans.
“What we've seen so far is that there has not been any substantial movement by employers to drop mental health coverage or restrict coverage based on the parity requirements,” says Pamela Greenberg, MPP, president and CEO of the Association for Behavioral Health and Wellness (ABHW), a trade association that represents managed care companies. “One of our concerns had been that employers would drop that coverage entirely, or drop some benefits or diagnoses.”
Employers are bracing themselves for increased costs, even though most studies on parity have shown those increases to be marginal. A December story in The Wall Street Journal reported that many companies are expanding their employee assistance programs (EAPs) to act as “gatekeeper” services to help control costs once parity kicks in. And one company, a mid-sized grocery chain in Wisconsin called Woodman's Food Market, dropped mental health coverage from its self-funded plan, citing the potential cost of parity as its primary reason.
Behavioral healthcare industry associations and patient advocacy groups, meanwhile, are watching to see how plans respond in the absence of clear regulations. Under the law, plans are required to provide more information when claims are denied. “Plans are now required to provide information if there is a disagreement between the plan and a provider,” says Daniel Guarnera, government relations liaison for NAADAC-the Association for Addiction Professionals and the National Association for Addiction Treatment Providers (NAATP). “It would be our hope that that sort of data is tracked and examined closely. As we move forward that will be one of the things that we and other groups look at to see how to improve the policy going forward to make sure it has its intended effect.”
Debate focuses on four key areas
The impact of the Parity Act on providers and employers depends on how the regulations deal with four areas of ambiguity in the original legislation:
Defining mental health vs. medical disorders. Insurers and benefit managers believe that the new law gives them leeway in defining what is a ‘medical disorder’ versus what is a ‘mental health disorder.’ Depending on how the regulations are written, a plan could simply designate a mental health issue as a medical disorder, which would exempt that diagnosis from parity compliance.
“The examples given in the letters in May were pervasive developmental disorders and autism, which they view as medical conditions,” Harbin says. “If they have the right to determine which category the disorders fall under, they would be able to put arbitrary limits on anything defined as a medical disorder, which could be a problem.”
“Separate but equal” deductibles. While the statute states that deductibles for mental health and substance abuse (MH/SA) services can't be higher than those for medical/surgical services, it does not declare whether or not plans can establish a separate deductible for MH/SA services.