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Strong final rule on parity is issued at last

November 8, 2013
by Alison Knopf
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With the statement that 60 percent of people with mental illness and 90 percent of people with substance use disorders do not get the treatment they need, Kathleen Sebelius, Secretary of the Department of Human Services (HHS), announced the release of the final rule on the Mental Health Parity and Addiction Equity Act (MHPAEA) today. The rule was published at 11:15 a.m.

The final rule will be published in the Federal Register November 13 and takes effect with plan years starting in July, 2014. In effect, this means insurance plans as of 2015, since most plans are based on calendar year.

The Department of Labor and Department of the Treasury jointly issued the rule with HHS. The law was enacted in 2008, and the interim final rule released in 2010.


Good news on NQTLs and residential

The good, really great news, for the field is that the non-quantitative treatment limitation restrictions (NQTL) have been retained. There was some fear that there would be a backing-off of these provisions, which required that any concurrent review or other limitations placed on mental health and substance abuse be no more stringent than those based on medical and surgical treatment.

The other really good news: residential treatment is to be considered on par with skilled nursing facilities and physical rehabilitation in terms of parity. Residential treatment is not, as cynics had feared, left out of parity protection. If an insurance company wants to require someone to fail first in outpatient before going to residential, they must have the same standard for medical/surgical, under the final rule.

The MHPAEA has already gone far toward eliminating the dollar and day limits which insurance policies imposed on mental health and substance abuse treatment. Now, co-pays, deductibles, and visit limits are generally no more restrictive for mental health and substance abuse than they are for medical and surgical benefits.



At the press conference held this morning, Substance Abuse and Mental Health Services Administration head Pamela Hyde was asked why it took so long for the final rule to come out. Hyde responded that the interim final rule released in 2010 “covered most of what needed to be covered.”

Parity does not apply to basic Medicaid, but it does apply to alternative benefit plans that have come about through the Affordable Care Act, added Hyde.

Gil Kerlikowske, director of the Office of National Drug Control Policy, said that the people who don’t get treatment “aren’t strangers – they’re our neighbors, our friends.” Science has shown that addiction is a “medical disease of the brain, not a moral failing,” he added. “Access to treatment shouldn’t be the privilege of a few who can afford it.”

The final rule also moves a step away from the bad old days when insurance companies could deny treatment based on proprietary medical necessity criteria, so that providers and patients never knew what it took to justify treatment. It ensures that parity applies to all intermediate levels of care received whether in residential or intensive outpatient treatment. And it clarifies the transparency required of health plans, so that they must share their medical necessity criteria.


No more exception clause

More good news: Importantly, the final rule eliminates a provision in the interim final rule that had allowed insurance companies to make an exception to parity requirements for certain benefits based on “clinically appropriate standards of care.” This was confusing and open to abuse, according to HHS.

The elimination of the exception clause is very important to the field and a strengthening of the rule. Insurance companies thought that they could apply restrictions more stringently on mental health and substance abuse if it were clinically appropriate. That’s gone. But there is still a discussion in the final rule about differences between mental health/substance abuse and medical/surgical, so stay alert to this issue.

A major step forward was made on the scope issue, keeping the basic six classifications. Basically, it says that if physical rehabilitation facilities and skilled nursing facilities are classified as inpatient, residential treatment for mental illness or substance abuse is inpatient treatment as well.

Finally, on disclosure, there is now a more direct path to asking an insurance company to produce the documents that justify their decisions. This is particularly important when a plan is doing aggressive concurrent review, demanding very frequent proof that a patient needs continued treatment.


Fight still ahead

But the devil is in the details, as we said this morning. State insurance commissioners have primary jurisdiction, and many have already proven that they aren’t interested in enforcing parity.

The continuation of the protections of the interim final rule was greeted with some relief by treatment providers, but there is still a fight ahead in terms of enforcement.

The champions of parity are few, with the Parity Implementation Coalition doing the heavy lifting. As one insider put it, “the field has committed some form of advocacy malpractice, when you can count on less than two hands the number of people working on this.”


Next week: An indepth analysis of the final rule and its implications for patients and treatment providers.