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By Paul Demko
Posted: November 8, 2013 – 2:00 pm ET
Work needed to close gaps in coverage for mental health, substance abuse treatment
By Paul Demko, Steven Ross Johnson and Beth Kutscher
The final rule, issued jointly by HHS and the Treasury Department, ensures that health plans covering about 85% of the population offer the same deductibles, copayments and limits on visits for mental health services as offered for medical and surgical services.
The rule implements the provisions of the landmark 2008 Mental Health Parity and Addiction Equity Act. It takes effect July 1, 2014. It combines with the Patient Protection and Affordable Care Act to offer an unprecedented level of coverage for people with mental healthcare needs. The ACA includes mental health services among the 10 essential benefits that must be offered by all insurance plans starting in January.
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.