How Does The Mhpaea Measure Parity
MHPAEA defines six classifications of benefits that each require parity compliance: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs. If a plan has no network of providers, all benefits in the classification are characterized as out-of-network. If coverage for mental health and substance use disorders is provided in one classification, it must be provided in each of the six benefit classifications where medical/surgical coverage is provided.
Within each of the benefit classifications, financial requirements, quantitative treatment limitations, and nonquantitative treatment limitations must be tested for parity. Financial requirements are the deductibles, copayments, etc. Quantitative treatment limits are limits on the frequency of treatment, number of outpatient visits, or other similar limits on duration of treatment. Nonquantitative treatment limitations are limitations that are not expressed numerically, but otherwise limit the scope or duration of benefits for treatment, such as requirements for using lower-cost therapies before a plan will cover more expensive therapies, conditional benefits on completion of a course of treatment medical management standards, standards for provider admission to participate in a network, etc.
Mental Health Parity Act
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The Mental Health Parity Act is legislation signed into United States law on September 26, 1996 that requires annual or lifetime dollar limits on mental health benefits to be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan. Prior to MHPA and similar legislation, insurers were not required to cover mental health care and so access to treatment was limited, underscoring the importance of the act.
What Is The Mental Health Parity And Addiction Equity Act
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Under the Mental Health Parity and Addiction Equity Act of 2008, most private and public insurers are required to cover mental health and substance use disorder treatment in the same way they cover treatment for any other disease.
The Parity Act requires a health plans standards for substance use and mental health benefits to be comparable to and no more restrictive than the standards for other medical benefits.
Generally, this means that a plan cannot put more restrictive visit limits, impose higher cost sharing or apply more onerous prior authorization or concurrent review requirements on MH/SUD benefits as compared to similar medical or surgical benefits. Insurance is complicated but parity is simple. Parity means health plans must treat addiction like any other disease.
Former Congressman and Founder of The Kennedy Forum, Patrick J. Kennedy, explains why the Parity Act should prevent insurance companies from discriminating against treatment for addiction care.
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State Mental Health Parity Laws
The MHPAEA parity requirements are federal requirements. State parity laws can be stricter about enforcing parity, and some are. For example, New York has one of the stricter parity laws among the states. Not only does it require a minimum of 30 days inpatient and 20 days outpatient treatment for mental health, the law also explicitly defines those illnesses that must be fully covered by insurance.
Defining the illnesses that must be covered is a way of getting around the medical necessity criteria that insurance companies frequently use to escape having to pay for treatment. For example, because major depression now falls under medical necessity in New York, an insurance plan cannot avoid paying for major depression treatment by arguing that itâs not a medical necessity.
Get Professional Legal Help With Your Mhpaea Questions
If you believe that your insurance plan is not offering comparable mental health and substance abuse benefits, in violation of federal or state law, you may want to seek legal counsel. Get started today by contacting a local healthcare attorney with expertise in such matters.
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How Does The Mhpaea Work
The MHPAEA was originally enacted to prevent health insurers from placing more treatment limitations or financial requirements on services related to mental health and substance abuse. Prior to the MHPAEA, a health plan might offer an unlimited number of medically necessary appointments with a dermatologist but only cover five psychiatrist appointments per year. With the MHPAEA in place, health plans should cover psychiatric services in the same way they cover other necessary health care services.
The MHPAEA affects several aspects of health coverage, including financial requirements such as co-pays and deductibles and treatment limitations such as number of visits and types of treatment. If a group health plan includes both MH/SUD and medical/surgical benefits, the MH/SUD benefits must be no more restrictive than the predominant financial requirements or treatment limitations that apply to substantially all medical/surgical benefits. This simply means the same financial requirements and treatment limitations of more than half of the medical services covered should be applied toward mental health services.
The following examples may help illustrate how the MHPAEA looks in practice:
Elements Of Coverage That Must Be At Parity
Qualified insurance plans have to guarantee that coverage is at parity for:
- Limits on the number of and length of covered inpatient/outpatient visits
- Out-of-network coverage and
- medical necessity criteria .
The term “at parity” means that these insurance plans elements — for mental health and for medical treatment/surgery — are comparable. For example, a plan wouldn’t meet parity requirements if the length of inpatient visits covered by insurance were shorter for mental health treatment than for medical treatment.
The Department of Labor’s “Self-Compliance Tool for the MHPAEA” is intended to help plan administrators and health insurance issuers understand these requirements.
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When Was The Mental Health Parity And Addiction Equity Act Established
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 is a federal law that generally prevents group health plans and health insurance issuers that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those.
Implications Of The Mental Health Parity And Addiction Equity Act
In this issue of the Journal, McConnell et al. examine the effects of Oregons state parity law on health care costs. This study is novel in that the Oregon law included nonquantitative treatment limitation provisions that are similar to those found in the MHPAEA. It is thus the first study to provide evidence of the effects of parity in the context of nonquantitative treatment limitations, albeit in a single state. The authors find that this parity law did lead to significant changes in the design of benefits among the four plans studied. Limits to the number of outpatient visits and inpatient days appeared in all four plans before parity, but these limits were eliminated after parity. After the nonquantitative treatment limitation provisions in the Oregon law were implemented, the use of management techniques stayed the same or decreased in the insurance plans studied. This contrasts directly with previous studies of parity , which have found parity to be associated with increases in the use of management .
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Understanding The Mental Health Parity And Addiction Equity Act
This is the second briefing in our series on the Consolidated Appropriations Act, 2021 and transparency regulations. It concerns a new rule under the Mental Health Parity and Addiction Equity Act that requires health plans to conduct and document an analysis that compares the nonquantitative treatment limitations applicable to benefits for mental health and substance use disorders to the nonquantitative treatment limitations applicable to medical and surgical benefits. The briefing originally was published in November, 2021.
The Bottom Line
Comparative Analysis of Nonquantitative Treatment Limitations
Background. The Mental Health Parity and Addiction Equity Act requires health plans and health insurance policies to provide benefits for mental health and substance use disorders that are comparable to the benefits that they provide for medical and surgical expenses. The Act addresses comparability in both quantitative and nonquantitative terms. The quantitative rules apply mathematical tests to a plans cost-sharing requirements and limits on the quantity of care . The nonquantitative rules evaluate matters that, by their nature, do not lend themselves easily to numerical analysis.
To conduct this analysis, health plans and insurers must first identify the plans NQTLs and the benefits to which they apply. Guidance issued on the new requirements identifies four NQTLs that will receive particular scrutiny:
History Of The Mhpaea
Before the MHPAEA of 2008 became law, there was the Mental Health Parity Act of 1996, which was introduced by legislators Pete Domenici and Paul Wellstone after decades of advocacy work to gain parity in health care. This legislation required all group health plans offering mental health care benefits and covering 50 or more employees to apply equal lifetime and annual dollar limits to mental health coverage and medical/surgical coverage. In other words, insurers must spend the same amount on mental health and substance abuse coverage as on medical/surgical coverage.
Though the MHPA legislation was an accomplishment, its limited scope encouraged many to continue working for more. In 2001, a directive from President Clinton allowed the Office of Personnel Management to enforce comprehensive health parity in the Federal Employees Health Benefits Program. This impacted 8.5 million federal employees, retirees, and dependents and also included coverage for all diagnoses listed in the American Psychiatric Associations Diagnostic and Statistical Manual . Additionally, a recommendation for parity was given in President George W. Bushs New Freedom Commission on Mental Health .
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Section : The Policy Context For Mental Health And Substance Abuse Insurance Parity
Below is the national Mental Health America Policy Position and Call to action regarding mental health parity in health insurance.1 This position paper sets the context for policy work on parity. The key issues are:
- Discrimination in health insurance coverage for mental health and substance abuse has existed despite the passage of other anti-discrimination legislation. Legislation is needed to reverse this arbitrary discrimination. Voluntary measures have not worked to end discrimination.
- Mental health is essential to overall health.
- Treatment works.
- Studies have found that equalizing specialty behavioral health and general medical benefits will either not increase total healthcare expenses at all or will increase them by only a very modest amount of total healthcare premium The real cost lies in not treating behavioral health disorders.
The Metal Health America Policy Position and Call to Action was adopted in September 2006, before the passage of the Mental Health Parity and Addiction Equity Act in 2008. However, as will be outlined in this toolkit, there are still gaps in mental health and substance abuse parity and the principles of the policy statement are still relevant. On a practical note, there are citations in the policy paper that are that continue to be relevant and valuable in making the argument for full parity.
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Timeline Of Federal Health Insurance Parity Policies
President Kennedy directs the Civil Service Commission to implement parity
1970s through present day
Parity laws enacted in many states – mostly for small group health plans some for individual policies many states establish minimum benefit level requirements for mental health and substance use disorders – employer-sponsored group health plans are generally exempt
The first federal parity legislation is introduced in Congress by Senators Pete Domenici and John Danforth
The Mental Health Parity Act enacted requiring comparable annual and lifetime dollar limits on mental health and medical coverage in large group health plans including employer-sponsored group health plans
President Clinton directs the Office of Personnel Management to implement parity in the Federal Employee Health Benefit Plan
President Bush’s New Freedom Commission on Mental Health includes a recommendation regarding parity in the Commission’s Final Report
Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act is signed into law – applying to large group health plans including employer-sponsored plans, effective for most plans starting in 2010
Medicare Improvements for Patients and Providers Act enacted including a provision to phase out statutory provision requiring a higher co-pay for outpatient mental health services
What 3 Things Were Established As A Result Of The National Mental Health Act Of 1946
act of 1946 incorporated three distinct goals: first, to provide fed eral support for research relating to the cause, diagnosis, and treatment of psychiatric disorders second, to train mental health personnel by pro viding federal fellowships and institutional grants and third, to award federal grants to the states.
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Thank You For Sharing
As the saying goes, what you measure gets managed. And really, thats all employers and their benefits partners need to know about the new DOLs new mental health parity enforcement.
It sounds simple, except for one small thing: very few stakeholders have been doing any benchmarking of their mental health benefits whatsoever over the 25-plus years of the Mental Health Parity Acts existence. Or if they have, theyve been doing it wrong.
Section : More Context: Political History Of Federal Mental Health And Addiction Insurance Parity
A September 2010 article by Colleen L. Barry, Haiden A. Huskamp and Howard H Goldman in Milbank Quarterly gives a summary of the political milestones in federal mental health and addiction insurance parity prior to the passage of the 2008 Mental Health Parity and Addiction Equity Law.14 Some historical highlights of parity policy:
In 2008, the Medicare Improvements for Patients and Providers Act was passed eliminating Medicare’s discriminatory copayments for mental and physical health.
In 2009, the Patient Protection and Affordable Care Act was passed. The Act is expected to expand health care coverage to an additional 32 million citizens and legal immigrants by 2019 through a combination of state-based private insurance exchanges and a Medicaid expansion. In addition, the new law includes a number of reforms to curb harmful insurance company practices as well as provisions to slow the growth of health care costs and improve quality of care.15 Some key parity provisions:
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Reflections On The Mental Health Parity And Addiction Equity Act After 10 Years
Address correspondence toCopyright
It took more than 45 years to accomplish fairness in insurance coverage for the treatment of mental illnesses and substance use disorders since President Kennedy took the first step in that direction with a directive to the Civil Service Commission that resulted in parity coverage for the years 1967 to 1975. Consumer groups, providers, and some segments of the health insurance industry worked long and hard to enact legislation that promised coverage on par with other medical care. The Mental Health Parity and Addiction Equity Act , enacted on October 3, 2008, began to take shape in Senators Pete Domenici and John Danforth’s parity bill in 1992. Today there is much to celebrate. Coverage has improved for more than 170 million people access to and use of treatment have expanded and sicker patients are better protected against the financial consequences of treatment.1
Ongoing Gaps In Mental Health Coverage
The MHPA, MHPAEA, and ACA have made substantial improvements in terms of access to mental health coverage. But there are still people who struggle to access mental health and substance use treatment, even on plans that are regulated under mental health parity laws.
Large-group health plans and self-insured health plans are not required to cover the ACAs essential health benefits. While these plans do have to follow parity rules if they offer mental health/substance abuse benefits, they are not actually required to offer those benefits at all.
To be clear, most large-group and self-insured plans tend to be robust and do offer coverage for the essential health benefits. An employer’s health plans are an important part of how they recruit and retain employees, and large businesses often compete with one another in offering high-quality health benefits.
But there are no federal rules that require those plans to include mental health or substance use benefits. States can require large-group plans to include coverage for mental health/substance use care, but only if the plan is fully insured.
With fully-insured plans, the employer purchases the plan through a commercial insurance company that handles the risk, while with self-insured plans, the employer runs the health plan and assumes financial risk.
The majority of very large employers opt to self-fund and self-funded plans are regulated under ERISA rather than state laws.
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