Meanwhile, employer health plans must comply with a controversial interim final rule (IFR) published by 3 federal agencies on February 2, 2010. At issue are such key questions as:
• Which illnesses and conditions must employer mental health plans cover?
• Under what circumstances would preauthorization for psychiatrist visits be legal?
• Would standards for including psychiatrists in behavioral networks be different from those for including other medical specialists in med/surg networks?
The American Psychiatric Association (APA) is also concerned about behavioral companies inappropriately restricting its payment rates to psychiatrists.
Employers were forced to equalize some aspects of mental health coverage in 1996 with passage of the Mental Health Parity Act. But it only applied to annual and lifetime limits, and only to companies that already offered mental health coverage. The MHPAEA adds to the parity mandate financial requirements and treatment limitations (such as deductibles and number of outpatient visits) under group health plans that cover more than 50 employees.
The February 2 IFR, published by Health and Human Services, Treasury, and Labor departments, listed 6 categories and said med/surg and mental health benefits had to be equal in each category—inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency services; and prescription drug benefits. Any limitations on mental health benefits within each category cannot be more restrictive than the predominant limitation applied to substantially all the medical/surgical benefits. This requirement is applied to both quantitative limits, such as copays and visit limits, and nonquantitative treatment limits, which, in the argot of this rulemaking, has come to mean the variety of medical management tools used by managed care companies. These include medical management standards, prescription drug formulary design, standards for provider admission to networks, fail-first policies or step-therapy protocols, and conditioning benefits on completion of a course of treatment.
Aside from substantive issues, the lawsuit filed by 3 behavioral benefits management companies grouped under the banner of the Coalition for Parity, Inc, argued that the 3 federal agencies in charge of implementing the law violated the Administrative Procedures Act. The Coalition for Parity, Inc, includes Magellan Health Services, Inc; Beacon Health Strategies, LLC; and ValueOptions.
But if that lawsuit were successful, it might only delay a final rule fur-ther. It would not resolve the deeper questions about how employers and the companies they hire to manage mental health programs will implement the expanded parity dictate. A number of interpretations in the IFR have caused companies to raise the specter of elimination of mental health benefits.
The Employee Retirement Income Security Act (ERISA) Industry Committee (ERIC), composed mostly of Fortune 500 companies, has criticized the IFR requirement on aggregation. This means a separate substance abuse group plan that an employee may be required to join because it is considered part of a second, separate med/surg health insurance plan. The two are “aggregated” into one plan for the purposes of complying with the new Wellstone-Domenici parity mandates. ERIC says the “unprecedented new aggregation rule requiring employers to aggregate separate plans for the purpose of complying with the regulation will cause many employers to eliminate their men-tal health benefits and that there are many valid reasons, particularly among large complex companies, to have separate plans.”
Gretchen Young, senior vice president of health policy at ERIC, said she could not make a general statement about whether a mental health benefit managed by a behavioral health company would be considered a “separate” plan under ERIC’s reasoning. “It all depends on how the plan is drafted,” she explained. “I can’t say whether a separate mental health plan would automatically be outside parity.” She emphasized that ERIC’s real concern is substance abuse policies, which often are separate from a company’s medical insurance because of the high cost of substance abuse care.
Behavioral service providers, which often manage mental health benefits for employers, are more concerned about rules for what happens inside a mental health plan. Perhaps the most controversial issue is the extent to which carve-out providers can use nonquantitative treatment limitations (NQTLs). These are medical management techniques, often related to cost containment (such as prior authorization for services, development of provider networks, and construction of formularies). In its comments, Magellan said the IFR would force it to drop many of the “cost-containment” NQTLs it currently uses. The implication was that the cost of mental health coverage for employers would go up. No cost estimates were given, but the MHPAEA includes an “exemption” process that provides a 1-year exemption for employers that can demonstrate actuarially that implementing parity has increased costs by more than 2% in the first year or 1% in subsequent years.
Anthony M. Kotin, MD, chief medical officer of Magellan Health Services, Inc, argued that Magellan ought to be allowed to maintain, for example, preauthorization requirements for psychiatrist visits in mental health plans, even if there were no similar preauthorization requirements in the company med/surg plan. The IFR apparently does not allow this. “This inappropriately transforms what was intended to be a benefits parity law into a provider parity law,” complained Kotin.
James H. Scully Jr, MD, medical director and CEO of the APA, explained that many insurers use different provider network standards for mental health/substance use disorder (MH/SUD) coverage or use a different calculation to set usual and customary rates for mental health professionals. “Not only do we believe that these practices are similarly prohibited NQTLs, we would like the Departments to clarify that these are 2 independent NQTLs and that meeting a network access standard does not relieve a plan from an obligation to use the same method of calculating reimbursement rates for MH/SUD services.”
Kotin emphasized that Magellan strongly supports parity. “Our hope is to avoid the creation of unnecessary complexity that adds administrative and financial burdens to providers and patients and inhibits access to care,” he added.
Jennifer Tassler, JD, deputy director of regulatory affairs for the APA, answered that the IFR prohibits overly aggressive, discriminatory NQTLs applied to mental health benefits.
She added, “While there is always a risk that employers or plans might drop mental health or substance abuse treatment coverage and blame the requirements of the parity law for such action, there has been little historical evidence of that happening in states that have enacted their own parity laws or after the federal law in 1996.”
