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Study uses state parity laws to predict treatment demand under federal law

October 24, 2013
by Alison Knopf
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Parity laws do lead to an increase in treatment for substance use disorders (SUDs), and the federal parity law will do the same – plus some, due to the increased insurance coverage resulting from the Affordable Care Act, according to a study published online October 23 in JAMA Psychiatry. The study, by Hefei Wen, and colleagues, looked at the effect of state-level SUD parity laws on state-aggregate SUD treatment rates from 2000 to 2008. The purpose was to shed light on the impact of the federal parity law, the Mental Health Parity and Addiction Equity Act (MHPAEA), on treatment for SUDs.

Parity laws require that insurance companies pay for treatment for SUDs the same way that they pay for treatment for medical/surgical conditions, without any greater restrictions. Historically, insurance companies have restricted the use of both mental health and SUD treatment in far more onerous ways than they have medical-surgical treatments.

The bottom line: the implementation of any state SUD parity law increased the treatment rate by 9 percent in all specialty SUD treatment facilities, and by 15 percent in facilities accepting private insurance. Under the ACA, the increase will be even greater because so many more people will be able to afford private health insurance or be covered by Medicaid. And the ACA includes parity provisions, so it expands the reach of parity far beyond the state-level laws that only target employment-sponsored group health plans that are not self-insured, said Wen, who is a doctoral student in the Department of Health Policy and Management at Rollins School of Public Health.

“The interplay between the ACA and the MHPAEA will further reduce financial barriers to SUD treatment, beyond the impact of state-level parity laws,” Wen told Behavioral Healthcare. “Therefore, for states that do not have any state-level SUD parity legislation, our estimates may represent a lower-bound of the effect of the ACA and MHPAEA on rates of SUD treatment.”

In addition, the MHPAEA mandates parity only for existing SUD coverage offered by plans, Wen noted. “In this sense, our findings for the effect of state-level ‘parity-if-offered’ laws may apply to the MHPAEA.” However, she added that not only does the MHPAEA regulate quantitative limits (e.g. annual or lifetime limits on number of visits or hospital days) addressed by previous state-level parity laws, “but it also mandates parity for a wider range of non-quantitative restrictions.” These include utilization review and other limitations that are not day or dollar limits. “Given the dominance of these managed care mechanisms in private health plans’ SUD service arrangements, the inclusion of the NQTL (non quantitative treatment limitations) restrictions into the MHPAEA may enable this legislation to yield larger effects on the SUD treatment rate than we estimated for the state-level ‘parity-if-offered’ laws,” she said.

Only the parity law in Oregon includes comprehensive NQTL restrictions that are comparable to the MHPAEA, she said.

The MHPAEA currently has an interim final rule, with the final rule expected out by the end of the year.

Asked how quickly the treatment system would be able to respond in a double-digit increase in demand, Wen said her study did not look at supply-side changes. “The increase in SUD treatment rate that we estimated may have come from the opening of new facilities, or from a higher case-load in the existing facilities,” she said.

The study is called “State Parity Laws and Access to Treatment for Substance Use Disorder in the United States; Implications for Federal Parity Legislation.”

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