House and Senate on Collision Course on Parity

September 1, 2007

A House committee's passage of a mental health parity bill on July 18 seems to put the House on a collision course with the Senate, raising the possibility that Congress once again will fail to improve on the 1996 law that requires employers already offering mental health benefits to ensure limited parity with physical health benefits.

A House committee's passage of a mental health parity bill on July 18 seems to put the House on a collision course with the Senate, raising the possibility that Congress once again will fail to improve on the 1996 law that requires employers already offering mental health benefits to ensure limited parity with physical health benefits.

The House Education and Labor Committee passed the Paul Wellstone Mental Health and Addiction Equity Act (HR 1424) by a bipartisan vote of 33 to 9. That made it likely that 2 other House committees to which it was referred will follow suit, as will the full House. That bill differs significantly from the Mental Health Parity Act of 2007 (S 558), which was approved on March 27 by the Senate Health, Education, Labor, and Pension Committee. Sponsors of the Senate bill have not brought it to the Senate floor for a vote in the ensuing months for reasons that are open to speculation.

Neither the House nor the Senate bill would require a company to offer psychiatric benefits. However, both bills attempt to extend mental health parity in employer health plans by improving on a 1996 law that requires companies with more than 50 employees to offer the same annual and lifetime dollar limits for mental health expenses as for other medical expenses. The 2007 bills would expand that parity dictate by applying it to deductibles, copayments, out-of-pocket expenses, coinsurance, covered hospital days, and covered outpatient visits.

The House bill goes further, mandating coverage of all DSM-IV conditions, unlike the Senate bill, which would allow states to determine which conditions to cover. The House sponsors want to ensure that parity extends to treatment for things like substance abuse and eating disorders, conditions that might not qualify under the Senate bill. In addition, the House bill would allow states with stronger parity laws to ignore some aspects of the federal law. The Senate bill preempts state laws on parity.

The House bill's DSM-IV mandate has drawn almost universal business opposition. Business groups also want a clear preemption of state laws on parity, of which there are 41, some with DSM-IV-type mandates.

Sens Pete Domenici (R, NM) and Edward Kennedy (D, Mass), 2 of the sponsors of the Senate bill, went to great lengths to win the support of business groups, such as the American Benefits Council, America's Health Insurance Plans, and the US Chamber of Commerce. The Coalition for Fairness in Mental Illness Coverage also supports the Senate bill, although some members of the Coalition, such as the American Psychiatric Association, are supporting both the House and Senate bills.

Pamela Greenberg, chair of the Fairness Coalition and CEO of the Association for Behavioral Health and Wellness, said, "I think all parties involved recognize the need and importance of parity legislation, and I believe they will make every attempt to work together to get a bill that's agreeable and can be signed by the President. That last point is very important. It does no good if we get a bill to the President that he can't support."

Craig Orfield, press secretary to Sen Mike Enzi (R, Ohio), the third sponsor of the Senate bill, admitted that a House-Senate conference over parity will be "difficult." But he added that he does not consider the issues to be insurmountable.

Congress May Again Forestall Monster Medicare Cuts

The Centers for Medicare and Medicaid Services (CMS) proposed big cuts in Medicare reimbursement for physicians in calendar year 2008 that could drop the average reimbursement for psychiatrists by 10% unless Congress, as it has in previous years, intervenes. Medicare's proposed rule, published on July 2, threatens a 9.9% reduction in the 2008 fee update, meaning fees for all Current Procedural Terminology (CPT) codes would decrease that much in 2008, subject to slight increases or decreases based on changes to the work and practice expense relative value units for each CPT code.

However, the good news is that Sen Max Baucus (D, Mont), chairman of the Senate Finance Committee, has committed to blocking the 9.9% cut in the 2008 update, according to a Baucus aide. The aide said Baucus would sponsor legislation to that effect. Any bill would have to pass the House and Senate and be signed by President Bush.

The update is based on the sustainable growth rate formula, which has led to update decreases in the past 5 years. The update either increases or decreases a dollar figure, which is multiplied against the sum of the work, practice expense, and malpractice expense relative value units for each CPT code to determine the Medicare payment for each CPT code.

The AMA would like to see Medicare reduce the impact of the negative update by using some of the $1.35 billion that Congress set aside in 2006 for the Physician Assistance and Quality Initiative Fund. Medicare wants to use that $1.35 billion for "bonus payments" in 2008 only for physicians who voluntarily report quality measures.

"Last year, Congress set aside $1.35 billion that could be used to reduce the scheduled 2008 pay cut," says AMA board member Cecil B. Wilson, MD. "The AMA and 85 other physician and health professional organizations sent a letter strongly urging the Administration to use this money to help Medicare physician payments keep pace with increases in practice costs. The Medicare Payment Advisory Commission . . . made a similar recommendation. In today's rule, CMS has chosen to spend all of the money to provide just 1.5% to 2% to physicians who report on certain quality measures."