By JoAnn Volk and Sandy Ahn
Early last fall, we at CHIR embarked on a project to examine how a handful of states are implementing and enforcing the Mental Health Parity and Addiction Equity Act (MHPAEA). We wanted to better understand early challenges in their efforts to ensure consumers receive the benefits promised under the law and what sort of support they might need from their federal partners. Since then, a new Administration and Congress have placed repeal of the Affordable Care Act (ACA) at the forefront of their work plans, putting at risk continued progress on achieving parity in coverage for mental health and substance use disorder.
Advances in Mental Health Parity
Congress has tackled parity for mental health and substance use disorder coverage in three successive bills, each time expanding the scope of the protection. These efforts culminated with enactment of the ACA, which, for the first time under federal law, required insurers in the individual and small business markets to cover mental health and substance use services.
Mental health parity was first enacted in 1996 with bipartisan support.
The law prohibited large employer health plans (including self-insured plans) that provide coverage for mental health care from imposing less favorable annual or lifetime dollar limits on those services than for general medical and surgical care.
MHPAEA was enacted in 2008 and extended the scope of protections to include substance use disorders and expanded the parity requirement to include financial limits as well as treatment limits. That means deductibles, co-pays and co-insurance for services like psychiatry visits or inpatient treatment for substance abuse could not be higher, nor could treatment limits be more restrictive, than for a physician visit or inpatient hospital stay. Implementing rules interpreted treatment limits to include non-quantitative treatment limits (NQTL). For example, health plans cannot subject mental health or substance use disorder services to prior authorization more frequently than general medical services, nor can they use stricter criteria for demonstrating medical necessity in order to obtain payment for services.
Even with this progress on mental health parity, close to one-fifth of health plan enrollees lacked coverage for mental health services, and over one-third lacked coverage for substance use disorders. This changed with enactment of the ACA. The law extended the reach of MHPAEA to small employer and individual market plans for the first time. With the ACA’s new minimum standard for essential health benefits (EHB), all new plans sold to individuals and small employers in all states must provide coverage for mental health and substance use disorder and at parity with medical services, bringing parity protections to consumers regardless of how they buy their coverage or where they live.
Delivering on the Mental Health Parity Promise: State and Federal Enforcement
Consumer protections are only meaningful if they are enforced. MHPAEA and the ACA largely depend on state departments of insurance (DOIs) to make sure that insurance companies are complying with the new requirements and consumers are receiving their benefits as promised under the law. In the fall of 2016, when MHPAEA regulations had been final for three years, we contacted five state DOIs to better understand how states were approaching MHPAEA implementation and enforcement. Of the five state officials interviewed, four are actively monitoring insurance company compliance with the federal mental health parity laws. The fifth state takes a more passive approach, choosing to await consumer complaints rather than conducting an upfront review of plans before they are marketed and sold.
While state DOIs have faced challenges implementing mental health protections, our contacts reported progress and new promise for this area of enforcement, thanks in part to new federal grants and technical assistance. They told us:
- They are taking a multi-pronged approach to mental health parity enforcement. DOIs reported conducting up front reviews of health plans, but are also using other tools to check for compliance. Each state is using market conduct exams – either targeted to specific insurers in response to complaints or routine exams to assess compliance with MHPAEA. States identified the collection and tracking of consumer complaints as an important component of their compliance efforts.
- Some are taking a broad view of mental health parity enforcement. One state DOI reviews multiple plan features when determining whether parity is being achieved. For example, state regulators examine reimbursement rates for mental health services, claims denial data, and external review processes and policies. Two state DOIs also review plans’ provider networks for coverage of mental health and substance use providers, noting that covered services are meaningless without access to providers.
- States want resources and expertise to conduct a sophisticated review for NQTL. All the states indicated the need for more staff and greater technical and clinical expertise. The four states that are actively enforcing mental health parity standards noted the complex nature of mental health and substance abuse treatment, making it difficult to assess what is or is not covered at parity with general medicine. One state planned to use federal funds to tap someone with clinical expertise to help with those “value judgements.”
In the wake of feedback from states about these capacity challenges, the Obama administration moved in 2016 to provide grants to states to fund enforcement activities for MHPAEA. Federal regulators also released additional guidance for MHPAEA implementation, including an index of compliance assistance materials and consumer resources.
Three of the five states we spoke with had applied for the federal funding and noted their plans for enhanced enforcement if the grants were awarded. One state planned to use the funding to hire staff needed to resume a market conduct exam that was suspended due to budget cuts. Another state planned to use the funds to produce an enforcement check list for regulators, modeled on tools used in California, as well as educational materials for consumers.
Looking Ahead: Mental Health Parity Progress at Risk
With threats of ACA repeal on the horizon, the mental health parity protections for small business employees and individuals could be gutted. The new administration has not yet signaled its approach to mental health parity enforcement, but there are early signs they will try to roll back the EHB standard, which includes required coverage of mental health and substance use services. To date, none of the ACA “replace plans” would maintain a requirement that insurers cover mental health services.
A rollback of EHB could leave millions of consumers without any mental health or substance use coverage at all. For those who are able to maintain access to this coverage, the promise that they will receive services at parity with medical care is only as good as the government’s commitment to enforce that requirement.