2008 Mental Health Parity and Addiction Equity Act (MHPAEA)
Overview and FAQs
The Paul Wellstone-Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 amends the Employee Retirement Income Security Act and the Public Health Service Act to prohibit employers’ health plans from imposing any caps or limitations on mental health treatment or substance use disorder benefits that aren’t applied to medical and surgical benefits.
Although the legislation went into effect on October 3, 2009, final regulations which will clarify the parameters of compliance with the Act, are still yet to be published. However, the interim final rules were issued by the Treasury Department, the U.S. Department of Labor and the U.S. Department of Health and Human Services (HHS) in early February 2010.
Overview of the Act (2008-2009)
- The Act requires that, if a health plan covers MH/SA services at all, then financial or treatment limitations on those services can be no more restrictive than financial or treatment limitations for medical or surgical benefits offered in the same plan.
- The new law requires parity in two areas:
- Treatment Limits – Equity with respect to numerical limits on inpatient and outpatient services, barring arbitrary limits on inpatient and outpatient coverage that do not also apply to medical-surgical coverage, and;
- Financial Limitations – Equity with respect to financial limitations, barring higher cost sharing, deductibles and out-of-pocket limits that do not also apply to medical-surgical coverage. This will result in most plans doing away with separate deductibles for mental illness and substance abuse.
- The Act requires that out-of-network coverage for MH/SA must be consistent with out-of-network coverage for medical and surgical services.
- The law does not require that a plan must include MH/SA benefits. However, if the plan does include such benefits, the requirements for parity apply. Currently, over 90% of employer-sponsored health plans do include coverage for mental health and substance abuse services.
- The law exempts individually purchased health plans and health plans sponsored by an employer with 50 or fewer employees.
- The law also provides a one-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. There’s also an exemption available for non-federal governmental agencies that is available through HIPAA.
- The law goes into effect for most plans on January 1, 2010 and applies to all plans negotiated after October 3, 2009. A final clarification of the legislation's intent is scheduled to be published in April 2010.
- If a plan offers two or more benefits packages, the requirements of the Act will be applied separately to each package.
- Providers can still use certain managed care techniques to manage access to MH/SA benefits and provide a more comprehensive service to members. Upon request by current or potential participants, beneficiaries, or providers, plans must disclose the criteria they use to determine medical necessity, and they must disclose the reason behind any denial of a claim for mental health or substance abuse treatment.
Overview of the Interim Final Regulations (2010)
- The interim final rules were issued by the Treasury Department, the U.S. Department of Labor and the U.S. Department of Health and Human Services (HHS), and published in the February 2, 2010, issue of the Federal Register. The interim final rules apply to plan years starting after June 30, 2010.
- Parity requirements apply to substantially all quantitative and nonquantitative treatment limits.
- Benefit classification: the interim final rules specify six classifications of benefits: Inpatient in network; Inpatient out of network; Outpatient in network; Outpatient out of network; Emergency care; and Prescription drugs.
- If a plan does not have a network of providers for inpatient or outpatient benefits, all benefits in the classification are characterized as out of network.
- The interim final rules mandate that parity for financial requirements and treatment limits generally be applied on a classification-by-classification basis and that these are the only classifications used to satisfy MHPAEA's parity requirements.
- Comments on the interim final rules will be accepted through May 3, 2010, and may be emailed to the federal rulemaking portal at http://www.regulations.gov.
Frequently-Asked Questions (FAQs)
Q: What is the history of the MHPA?
A: The first parity bill was introduced in 1992 with the purpose of ending health insurance inequities between Mental Health / Substance Abuse (MH/SA) disorders and medical / surgical benefits for group health plans with more than 50 employees. There was mounting evidence that removing limits on coverage and higher cost sharing could help employers intervene early in the course of an illness and avoid higher costs and lost productivity. The first Parity Act was enacted in 1996, and this new Act is an amendment of the 1996 Act.
Q: How is this iteration of the Act different than the 1996 version?
A: The 2008 Act amended and substantially increased the mental health benefits protection afforded under the federal Mental Health Parity Act of 1996, which only required parity coverage for lifetime and annual dollar limits and did not apply to benefits for substance use disorders.
Q: Does the Act supersede state parity laws?
A: States can continue to enforce any parity requirement deemed stronger than federal law. In addition, the new law leaves in place all state mandates to offer or cover treatment for mental illness – including those that require offering or covering specific mental illnesses.
Q: How will compliance with the Act be monitored?
A: In 2012, and then every two years, the Labor Secretary will submit a report on compliance with the Act, including the results of any compliance audits or surveys and an analysis of reasons for any failures to comply with the law. In addition, within three years the Government Accounting Office (GAO) will report on the results of a study that analyzes the specific rates, patterns and trends in coverage, any exclusion of specific mental health and substance abuse diagnoses by health plans, and the impact of the Act on coverage and costs.
Q: What is the potential impact of removing Mental Health and Substance Abuse benefits altogether?
A: By removing MH/SA benefits altogether, companies are leaving themselves exposed to a variety of risks:
- Companies that do not provide mental health or substance abuse services leave members who have mental health or substance abuse conditions with few, if any, avenues to get rehabilitated. While an effective EAP can address the majority of short-term behavioral health conditions, the more acute caseswill be left untreated.
- More members will turn to general practitioners (GPs), not psychiatrists, to prescribe psychotropic medication. Because most GPs are not experienced or trained in behavioral health, this may lead to higher pharmacy costs due to improper prescriptions and inappropriate lengths of care. It may also have a negative impact on productivity, since members with behavioral health needs may be offered a prescription in lieu of therapy.
- The emergency room will be a first stop for members with problems that would otherwise be addressed through (less-expensive) detoxification or psychiatric services.
- Medical costs will be higher for members who are admitted to medical units, in lieu of less expensive and more effective psychiatric units, for suicide attempts.
- Without a managed behavioral healthcare component, unscrupulous providers will not have a check-and-balance system that stops them from keeping a member in long-term care indefinitely.
- Untreated mental health and substance abuse conditions have a profound (negative) impact on a member's productivity, absenteeism and "presenteeism". Removing MH/SA benefits altogether will result in a less productive workforce.
Q: What can CuraLinc Healthcare do to help?
A:
CuraLinc, through the SupportLinc Health Management Services program, will provide client organizations with additional "layers" of support to (a) ensure their members are receiving the most appropriate level of care; and (b) provide them with a check and balance system for members that are in long-term care, inpatient care, in a partial hospitalization program (PHP) or an intensive outpatient program (IOP).
CuraLinc Healthcare offers client organizations a variety of plan design options that can reduce the financial impact of the Act while still providing client members with additional layers of advocacy that guide them to the right level of care at the right time. To learn more, please contact us at 800-490-1585 or email us at info@curalinc.com.
"Treat the Person, Not the Condition"
