New mental health coverage mandates going into effect in 2010 will force corporations and their insurance companies to adopt new utilization management protocols that could put the squeeze on psychiatrists. The American Psychiatric Association (APA) is concerned that insurance companies could restrict the ability of psychiatrists to bill for evaluation and management codes, which would limit them to psychotherapy codes. “We think there are ways in which insurance companies or managed behavioral health companies can subtly manage benefits, by rates of reimbursement, how large and inclusive their networks are, limits on types of charges and other techniques,” said Nick Meyers, director of government relations for the APA.
Just how intense these new payment pressures will be is being decided as 3 federal agencies work to complete the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, passed by Congress last October. That new law expanded an earlier 1996 mental health parity law beyond its reference to aggregate lifetime limits and annual limits. This new mandate includes parity for deductibles,copayments, coinsurance, and out-of-pocket expenses.
Psychiatrists,behavioral health organizations, and employer groups are pressuring the 3 federal agencies in charge of the rule making on a number of key issues, which are diametrically opposed to arguments made by insurance and business groups. Meyers explained that the 3 agencies are apt to publish an interim rule this summer. After receiving comments, they will publish a final rule toward the end of 2010.
The interested parties have squared off on numerous issues that had not been addressed by Congress. Of utmost concern to everyone, and for different reasons, is the extent to which employers and insurance companies can manage mental health and substance abuse benefits within the confines of parity. Psychiatrists and mental health groups want the new parity law to be interpreted as broadly as possible. They do not want parity subject to severe insurance company management. On the other hand, if a company’s costs after parity increase by more than 2% in the first 6 months of 2010, the company can ignore the new parity law in 2011. It would then have to comply fully in 2012, and if costs were up 1% in the first 6 months of 2012, the company could again ignore parity in 2013. Expansive benefits loosely managed run the risk of allowing some companies to exit Wellstone- Domenici through its back door.
Kathryn Wilber, senior counsel, health policy, American Benefits Council (ABC), a trade association of large corporations, said “The law is very clear. It prescribes parity in 2 areas: financial requirements and treatment limitations. It exempts ‘terms and conditions’from parity. So the issue of whether we can manage the mental health benefit is not a gray area at all.” In addition, the Wellstone- Domenici law leaves it up to the “plan” to determine which psychiatric conditions to cover, and which physicians can supply services and when.
The position held by ABC was echoed by the Association for Behavioral Health and Wellness (ABHW): companies and insurance companies should be allowed to manage a mental health/substance abuse benefit more tightly than a medical/surgical benefit. Pamela Greenberg, president and CEO of ABHW, stated,“Some groups are seeking parity in management of the benefit. One, we don’t believe that was the intent of the law. Two, the comparison can’t be made between taking out a gallbladder and treating schizophrenia. We don’t have lab tests for schizophrenia.”
According to ABHW in its comments to the Department of Health and Human Services, the Internal Revenue Service, and the Department of Labor, utilization management protocols applied to mental health benefits “require a different management strategy that is extremely caseand provider-specific.” The Department of Defense’s Tricare program, for example, requires precertification and concurrent review for nonemergency admissions to psychiatric and residential treatment facilities and also for outpatient visits that go beyond a predetermined number. Tricare does not uniformly apply the same requirements to medical and surgical benefits.
Meyers replied that the APA would object to the use of a technique such as prior authorization to access mental health care or substance use disorder treatment where there is no such similar requirement on the medical and surgical benefit.
Another issue is whether “separate but equal” deductibles are legal—one for medical benefits, another for mental health benefits. Greenberg admitted the law isn’t clear on this. The ABHW and ABC want federal endorsement of 2 deductibles, since many group insurance plans contract with a managed behavioral health company—such as ABHW’s members— to manage a “mental health carve-out.” If there is only one deductible for both medical and mental health services, companies using both a behavioral health and regular insurance company to manage those benefits would require 2 plan administrators to develop program interfaces that would allow sharing of accurate, realtime data to ensure accurate application of the benefit.
There are significant costs attached to these interfaces. ABHW members have estimated that developing these interfaces would cost $420,000 to $750,000 for each interface: “For a typical insurance issuer who needs to interface with 40 to 50 other plan administrators on behalf of its plan customers, our member plans have indicated that the cost could be as much as $17 million to $30 million per plan administrator. These costs would typically be passed on, bringing employers closer to the 2% and 1% exemption levels.”
Meyers emphasized that a fundamental aspect of the Wellstone- Domenici law is that behavioral health needs to be integrated into other sorts of medical services. “A second separate expenditure limit for one kind of service is the antithesis of what this law is about.”