Feds Scrutinize Mental Health and Addiction Parity
While we’ve all been consumed since 2010 with the Affordable Care Act, you may have forgotten that there was another “health care reform” act passed back in 2008 — the Mental Health Parity and Addiction Equity Act (MHPAEA). It’s now in the spotlight because the final regulations generally took effect on the first day of the plan year beginning on or after July 1, 2014. The Department of Labor (DOL) is aggressively auditing plans for MHPAEA compliance.
Equal Treatment Rule
While MHPAEA (we won’t even attempt to pronounce that) doesn’t require a health plan to provide Mental Health or Substance Use Disorder (MH/SUD) coverage, the “equal treatment” rule requires parity between traditional health plan benefits and MH/SUD benefits.
This is trickier than it looks on the surface, because the parity requirements apply separately to these six classifications of benefits:
- In-patient in-network
- Inpatient out-of-network
- Outpatient in-network
- Outpatient out-of-network
- Emergency Care
- Prescription Drugs
If a health plan provides MH/SUD benefits in ANY of the six classifications, they must be provided in EVERY classification in which Medical/Surgical (M/S) are provided. Here’s an example of how to get tripped up on this: Your plan provides coverage for Ritalin, a prescription drug which is used to treat attention deficit disorders, but the plan doesn’t cover doctor’s office visits for the same diagnosis. To comply, you must either expand your coverage to all six classifications of benefits, or remove the prescription drug coverage for that diagnosis.
Financial Requirements and Treatment Limitations
If your plan offers MH/SUD benefits (and most plans offer at least some of these benefits), financial requirements (e.g., deductibles, co-pays and coinsurance, and maximum out-of-pocket limits) or treatment limitations (e.g., annual/episodic/lifetime number of visits or days of service) must be applied equally to MH/SUD and M/S. For example, if your plan has 100% coverage for in-network hospitalization after a $500 deductible, you can’t impose a different limit for MH/SUD treatment in that classification or a separate deductible MH/SUD.
This overview just scratches the surface of MHPAEA. While fully-insured plan sponsors may think that their plans are in compliance, the DOL’s audit has sent several insurers scrambling to amend their plans even though they were previously approved by California’s Department of Insurance. If you haven’t read your plan’s definition of mental illness or mental health care treatment lately, you may be surprised to discover that your benefits will have to change, despite what you may have negotiated with your insurance carrier and your labor associations. Self-insured plans, regulated by the Department of Health and Human Services, should definitely review how their coverage is described in their plan document. The “other health care reform act” has the potential to cause quite a headache!