BENDAT MENTAL HEALTH PARITY OR ILLUSORY REFORM
IN NAME ONLY? MENTAL HEALTH PARITY OR ILLUSORY REFORM Meiram Bendat Abstract: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 and the Affordable Care Act mandate significant insurance and patient protection reforms. Despite these safeguards, lax regulatory enforcement and lack of consumer and provider sophistication have failed to remedy ongoing insurer abuses resulting in deprivation of crucial mental health and substance abuse treatment. Even with persistent and informed advocacy, including strategies outlined herein, any potential parity gains are negated by unreasonably low reimbursement benchmarks already used by insurers in many ACA*-exchange plans. The need for legislative remediation is therefore urgent.
Inadequate access to mental health1 care has been an enduring blight lurking in the shadows of public awareness. “This situation has been tolerated far too long,” said President John F. Kennedy in 1963. “It has troubled our national conscience—but only as a problem unpleasant to mention, easy to postpone, and despairing of solution.” Since passage of the Community Mental Health Act during President Kennedy’s administration, advances in psychopharmacology have made deinstitutionalization a reality for many. Yet in the absence of robust psychosocial supports to replace locked facilities, the care of many chronically and severely ill patients has been improperly relegated to prisons, charities, and emergency rooms ill equipped to handle their needs. Compounding inadequate access to community mental health resources has been historic discrimination against mental health coverage by private insurers, managed behavioral healthcare organizations, and employers,2 based largely on irrational and disproven fears of rapaDedicated to my dear friend and mentor, Elyn Saks. Meiram Bendat, J.D., M.F.T., Psych-Appeal, Inc. and New Center for Psychoanalysis (Los Angeles, CA). *See Appendix for a list of acronyms used throughout the article. Psychodynamic Psychiatry, 42(3) 353–376, 2014 © 2014 The American Academy of Psychoanalysis and Dynamic Psychiatry
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cious benefits consumption by a patient population culpable of psychic infirmity and pathological dysregulation preyed on, at best, by misguided practitioners with dubious clinical methods. Consequently, in the United States, where an estimated quarter of the population suffers from mental health conditions in any given year (Kessler, Chiu, Demler, & Walters, 2005) and where the lifetime incidence of mental illness is estimated at 50% (Kessler, Berglund, Demler, Jin, Merikangas, & Walters, 2005), insurers have balked at covering mental health conditions by either altogether excluding or greatly limiting treatment.3 Ironically, despite tremendous need for treatment, mental healthcare spending accounted for only 7.3% of total health costs in 2009, dropping from 8.7% in 1990.4 Yet the mental health administrative share (including the costs and profits of private insurers) of all healthcare administrative expenditures ballooned from 10% in 1990 to 17.2% in 2009.5 Not until passage of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“Federal Parity Act”)6 were large group health plans that offered benefits for mental health and/or substance use disorders required, with limited exceptions,7 to administer them on par with medical/surgical benefits. In 2011, the General Accounting Office reported on findings “that the implementation of [mental health] parity requirements led to reduced enrollee expenditure” (GAO-12-63, 2011, p. 20). A 2013 report commissioned by the United States Department of Health and Human Services reinforced that “[e]valuations of [Federal Employees Health Benefits Program] parity found no significant increase in total behavioral health spending. Nor did evaluations find an increased probability of any [mental health/substance use disorder] service utilization resulting from parity. In fact, the quantity of [mental health/substance use disorder] services patients received may have decreased slightly after parity was introduced” (Goplerud, 2013, p. 6). It took full implementation of the Affordable Care Act (“ACA”)8 in 2014, however, to require insurers to include “essential health benefits,” encompassing treatment for mental health, substance abuse, and behavioral disorders, in plans sold on the individual and small group markets.9 Notably, while large group plans choosing to offer mental health benefits and individual/small-group plans required to include essential mental health benefits must be parity-compliant, by no means has parity been achieved. Due to the public’s unfamiliarity with these intricate laws, stigma and fatigue inhibiting patients, and lax surveillance, it is unsurprising that meaningful mental health treatment remains out of reach for so many insureds. While one need not scratch hard beneath the surface to find rampant mental health parity violations, reliance on governmental intervention
MENTAL HEALTH PARITY OR ILLUSORY REFORM
355
appears misplaced. Regulatory oversight and public enforcement campaigns have been sporadic and anemic at best. Given the profound, current need for treatment and continued insurer impediments to meaningful care, this article will expound on the ACA and parity laws with an eye toward patient advocacy and empowerment of mental health professionals. Recommendations for reform will follow. Mandates for Reform: The ACA and Federal Parity Act According to the U.S. Census Bureau’s 2011 American Communities Survey, 47.5 million Americans were found to lack health insurance coverage altogether, and 25% of uninsured adults suffer from a mental health condition, substance use disorder, or both (Garfield, Lave, & Donahue, 2010). Responding to these chilling statistics, President Obama’s signature piece of legislation, the ACA, forever altered the American health insurance landscape. Among other things, the ACA eliminated insurability barriers like pre-existing conditions and provided for ten categories of “essential health benefits” that insurers must cover in all non-grandfathered individual and small group plans:10 • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services, including oral and vision care While the ACA requires that “health benefits established as essential not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or of the individuals’ present or predicted disability, degree of medical dependency, or quality of life,”11 states regulating insurance marketplaces are nonetheless permitted to establish the scope of essential health benefits based on
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Table 1. Variability of “Essential” Mental Health Benefits Across ACA-Exchange Plans States are free to establish their own scope of: Inpatient antd outpatient services, defining covered conditions Habilitative and rehabilitative services
benchmark plans12 from which “substantially equal” and “actuarially equivalent” deviations are permitted (see Table 1).13 Though all such plans include in- and outpatient care for mental health, substance abuse, and behavioral disorders, exactly which conditions are covered are inherently subject to deviation. Furthermore, in the absence of state-specific definitions of “habilitative services,” insurers may define such coverage on their own and may substitute greater “rehabilitative” services with lesser “habilitative” services.14 Thus, even with the ACA’s mandate for inclusion of essential health benefits, plans may not necessarily be required to cover the same mental health conditions or offer a uniform continuum of services across all states. In 2008, the Federal Parity Act amended the Employee Retirement Income Security Act of 1974 (“ERISA”), regulating private employersponsored welfare benefit plans, and the Public Health Service Act, which applies to individual and non-federal governmental health plans regulated by the states. While the Federal Parity Act initially applied only to large group health plans that chose to offer mental health benefits, the ACA further wrapped the Federal Parity Act into all nongrandfathered individual and small group insurance plans required to include essential mental health benefits. Moreover, the Federal Parity Act is intended to work in tandem with state laws applicable to individual and group insurance that may mandate coverage for certain mental health conditions and confer greater protections than provided by the Federal Parity Act.15 Thus, stakeholders must be attuned to the possibility of concurrent and separate application of the Federal Parity Act and state mental health parity laws (see Table 2).16 While the Federal Parity Act contains numerous provisions, the most relevant for purposes of this discussion is its unequivocal prohibition of separate treatment limitations applicable only to benefits for mental health or substance use disorders.17 The Federal Parity Act’s implementing regulations define “treatment limitations” as either “quantitative,” expressed numerically, or “non-quantitative,” expressed as protocols limiting the scope or duration of benefits for treatment. Because non-quantitative treatment limitations (“NQTL”) can theoretically take many forms, the implementing regulations identify an “illustrative list”:18
MENTAL HEALTH PARITY OR ILLUSORY REFORM
357
Table 2. Applicability of Parity Laws to Health Plans Plan Type
Federal Parity Act
State Parity Laws
Private Employer-Sponsored Large group (both grandfathered and non-grandfathered under ACA) Self-funded
Generally yes, if MH/SA benefits are offered
No
Fully-insured
Generally yes, if MH/SA benefits are offered
Possibly
Self-funded
Yes, with respect to essential mental health benefits
No
Fully-insured
Yes, with respect to essential mental health benefits
Possibly
No
Possibly
Non-grandfathered under ACA
Yes, with respect to essential mental health benefits
Possibly
Grandfathered under ACA
No
Possibly
Small group (generally < 50 employees but will increase in 2016 to
IN NAME ONLY? MENTAL HEALTH PARITY OR ILLUSORY REFORM Meiram Bendat Abstract: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 and the Affordable Care Act mandate significant insurance and patient protection reforms. Despite these safeguards, lax regulatory enforcement and lack of consumer and provider sophistication have failed to remedy ongoing insurer abuses resulting in deprivation of crucial mental health and substance abuse treatment. Even with persistent and informed advocacy, including strategies outlined herein, any potential parity gains are negated by unreasonably low reimbursement benchmarks already used by insurers in many ACA*-exchange plans. The need for legislative remediation is therefore urgent.
Inadequate access to mental health1 care has been an enduring blight lurking in the shadows of public awareness. “This situation has been tolerated far too long,” said President John F. Kennedy in 1963. “It has troubled our national conscience—but only as a problem unpleasant to mention, easy to postpone, and despairing of solution.” Since passage of the Community Mental Health Act during President Kennedy’s administration, advances in psychopharmacology have made deinstitutionalization a reality for many. Yet in the absence of robust psychosocial supports to replace locked facilities, the care of many chronically and severely ill patients has been improperly relegated to prisons, charities, and emergency rooms ill equipped to handle their needs. Compounding inadequate access to community mental health resources has been historic discrimination against mental health coverage by private insurers, managed behavioral healthcare organizations, and employers,2 based largely on irrational and disproven fears of rapaDedicated to my dear friend and mentor, Elyn Saks. Meiram Bendat, J.D., M.F.T., Psych-Appeal, Inc. and New Center for Psychoanalysis (Los Angeles, CA). *See Appendix for a list of acronyms used throughout the article. Psychodynamic Psychiatry, 42(3) 353–376, 2014 © 2014 The American Academy of Psychoanalysis and Dynamic Psychiatry
354
BENDAT
cious benefits consumption by a patient population culpable of psychic infirmity and pathological dysregulation preyed on, at best, by misguided practitioners with dubious clinical methods. Consequently, in the United States, where an estimated quarter of the population suffers from mental health conditions in any given year (Kessler, Chiu, Demler, & Walters, 2005) and where the lifetime incidence of mental illness is estimated at 50% (Kessler, Berglund, Demler, Jin, Merikangas, & Walters, 2005), insurers have balked at covering mental health conditions by either altogether excluding or greatly limiting treatment.3 Ironically, despite tremendous need for treatment, mental healthcare spending accounted for only 7.3% of total health costs in 2009, dropping from 8.7% in 1990.4 Yet the mental health administrative share (including the costs and profits of private insurers) of all healthcare administrative expenditures ballooned from 10% in 1990 to 17.2% in 2009.5 Not until passage of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“Federal Parity Act”)6 were large group health plans that offered benefits for mental health and/or substance use disorders required, with limited exceptions,7 to administer them on par with medical/surgical benefits. In 2011, the General Accounting Office reported on findings “that the implementation of [mental health] parity requirements led to reduced enrollee expenditure” (GAO-12-63, 2011, p. 20). A 2013 report commissioned by the United States Department of Health and Human Services reinforced that “[e]valuations of [Federal Employees Health Benefits Program] parity found no significant increase in total behavioral health spending. Nor did evaluations find an increased probability of any [mental health/substance use disorder] service utilization resulting from parity. In fact, the quantity of [mental health/substance use disorder] services patients received may have decreased slightly after parity was introduced” (Goplerud, 2013, p. 6). It took full implementation of the Affordable Care Act (“ACA”)8 in 2014, however, to require insurers to include “essential health benefits,” encompassing treatment for mental health, substance abuse, and behavioral disorders, in plans sold on the individual and small group markets.9 Notably, while large group plans choosing to offer mental health benefits and individual/small-group plans required to include essential mental health benefits must be parity-compliant, by no means has parity been achieved. Due to the public’s unfamiliarity with these intricate laws, stigma and fatigue inhibiting patients, and lax surveillance, it is unsurprising that meaningful mental health treatment remains out of reach for so many insureds. While one need not scratch hard beneath the surface to find rampant mental health parity violations, reliance on governmental intervention
MENTAL HEALTH PARITY OR ILLUSORY REFORM
355
appears misplaced. Regulatory oversight and public enforcement campaigns have been sporadic and anemic at best. Given the profound, current need for treatment and continued insurer impediments to meaningful care, this article will expound on the ACA and parity laws with an eye toward patient advocacy and empowerment of mental health professionals. Recommendations for reform will follow. Mandates for Reform: The ACA and Federal Parity Act According to the U.S. Census Bureau’s 2011 American Communities Survey, 47.5 million Americans were found to lack health insurance coverage altogether, and 25% of uninsured adults suffer from a mental health condition, substance use disorder, or both (Garfield, Lave, & Donahue, 2010). Responding to these chilling statistics, President Obama’s signature piece of legislation, the ACA, forever altered the American health insurance landscape. Among other things, the ACA eliminated insurability barriers like pre-existing conditions and provided for ten categories of “essential health benefits” that insurers must cover in all non-grandfathered individual and small group plans:10 • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services, including oral and vision care While the ACA requires that “health benefits established as essential not be subject to denial to individuals against their wishes on the basis of the individuals’ age or expected length of life or of the individuals’ present or predicted disability, degree of medical dependency, or quality of life,”11 states regulating insurance marketplaces are nonetheless permitted to establish the scope of essential health benefits based on
356
BENDAT
Table 1. Variability of “Essential” Mental Health Benefits Across ACA-Exchange Plans States are free to establish their own scope of: Inpatient antd outpatient services, defining covered conditions Habilitative and rehabilitative services
benchmark plans12 from which “substantially equal” and “actuarially equivalent” deviations are permitted (see Table 1).13 Though all such plans include in- and outpatient care for mental health, substance abuse, and behavioral disorders, exactly which conditions are covered are inherently subject to deviation. Furthermore, in the absence of state-specific definitions of “habilitative services,” insurers may define such coverage on their own and may substitute greater “rehabilitative” services with lesser “habilitative” services.14 Thus, even with the ACA’s mandate for inclusion of essential health benefits, plans may not necessarily be required to cover the same mental health conditions or offer a uniform continuum of services across all states. In 2008, the Federal Parity Act amended the Employee Retirement Income Security Act of 1974 (“ERISA”), regulating private employersponsored welfare benefit plans, and the Public Health Service Act, which applies to individual and non-federal governmental health plans regulated by the states. While the Federal Parity Act initially applied only to large group health plans that chose to offer mental health benefits, the ACA further wrapped the Federal Parity Act into all nongrandfathered individual and small group insurance plans required to include essential mental health benefits. Moreover, the Federal Parity Act is intended to work in tandem with state laws applicable to individual and group insurance that may mandate coverage for certain mental health conditions and confer greater protections than provided by the Federal Parity Act.15 Thus, stakeholders must be attuned to the possibility of concurrent and separate application of the Federal Parity Act and state mental health parity laws (see Table 2).16 While the Federal Parity Act contains numerous provisions, the most relevant for purposes of this discussion is its unequivocal prohibition of separate treatment limitations applicable only to benefits for mental health or substance use disorders.17 The Federal Parity Act’s implementing regulations define “treatment limitations” as either “quantitative,” expressed numerically, or “non-quantitative,” expressed as protocols limiting the scope or duration of benefits for treatment. Because non-quantitative treatment limitations (“NQTL”) can theoretically take many forms, the implementing regulations identify an “illustrative list”:18
MENTAL HEALTH PARITY OR ILLUSORY REFORM
357
Table 2. Applicability of Parity Laws to Health Plans Plan Type
Federal Parity Act
State Parity Laws
Private Employer-Sponsored Large group (both grandfathered and non-grandfathered under ACA) Self-funded
Generally yes, if MH/SA benefits are offered
No
Fully-insured
Generally yes, if MH/SA benefits are offered
Possibly
Self-funded
Yes, with respect to essential mental health benefits
No
Fully-insured
Yes, with respect to essential mental health benefits
Possibly
No
Possibly
Non-grandfathered under ACA
Yes, with respect to essential mental health benefits
Possibly
Grandfathered under ACA
No
Possibly
Small group (generally < 50 employees but will increase in 2016 to
