The Mental Health Parity and Addiction Equity Act: Parity in Practice Eugene Simms & Victoria Chihos, Student Attorneys University of Maryland Francis King Carey School of Law Drug Policy and Public Health Strategies Clinic Adrienne Ellis, Director, Maryland Parity Project at the Mental Health Association of Maryland Sponsored by Maryland Medicaid Matters

Overview What the Act accomplishes Health plan features that are regulated: Quantitative Treatment Limitations Financial Requirements Annual and Lifetime Limits Non-quantitative Treatment Limitations Prescription Drug Benefits Standards for identifying parity violations Enforcement tools and the federal/ state agencies responsible for investigating claims Audience Questions

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (Parity Act) Pre-legislation Discrimination Greater cost-sharing More Limited Coverage Restrictive Plan Management Standards Parity Act Timeline October Signed into law; October Effective Date Interim Final Regulations: Applies to plans beginning on or after July 2010 Final Regulations – Pending Affordable Care Act Extension 2014

What Does the Parity Act Accomplish? Requires plans to provide mental health and/or substance use disorder benefits that are comparable to medical/surgical benefits. Applies to Large Group Health Plans Greater than 51 Employees Self-Insured or Commercial Plans Affordable Care Act Extends Parity Act – January 2014 Small Group and Individual Plans Sold in and outside of the Health Benefit Exchange Does not mandate coverage for either mental health or substance use services, but State law may mandate such coverage for commercial insurance plans.

Maryland Parity Law What additional protections does the state law provide? Requires Coverage: Commercial Insurance and HMOs for large groups and individuals must provide coverage for mental health and substance use disorder benefits Inpatient benefits: plan must cover at least the same number of days of inpatient treatment for MH/SUD as M/S Partial Hospitalization: must cover at least 60 days Outpatient Coverage: unlimited visits annually but tiered copayments 80% visits % visits % visits 31+

Which Law Applies? Plan TypeMaryland LawFederal Law Large Group 51+ Employees Fully Insured Yes Large Group 51+ Employees Self Insured NoYes Small Group 2-50 Employees NoYes(under ACA) IndividualYesYes(under ACA)

Other Plans Subject to Parity Standards Federal Government Employees: Federal Employee Health Benefit Plan (FEHBP) has required parity since 2001 Does not apply to Department of Defense plans covered under Tricare Non-federal Government Employees: Self-funded state and local government plans may elect to opt-out Medicaid Managed Care Plans: Federal parity law applies Medicare plans specifically exempt from parity 2008 Medicare Improvement for Patients and Providers Act (MIPPA) creates some equality in outpatient behavioral health benefits

Plan Features Regulated Quantitative Treatment Limitations and Financial Requirements Cumulative Financial Requirements and Quantitative Treatment Limitations Annual and Lifetime Limits Prescription Drug Benefits Non-Quantitative Treatment Limitations

Definitions Quantitative Treatment Limitation Number of visits, days of coverage, frequency of visits, days in a waiting period. Restrictions on plan benefits that can be expressed numerically Financial Requirements Deductibles, copayments, coinsurance, and out-of- pocket expenses Aggregate lifetime and annual limits are subject to different standards

Treatment Limitations and Financial Requirements: What Does the Law Require? Prohibits treatment limitations and financial requirements for mental health/substance use disorder benefits (MH/SUD) that are: Separate from M/S benefits in same classification More restrictive than those applied on M/S benefits in same classification What does separate and more restrictive mean? Quantitative Treatment Limitations: Not applied to M/S benefits or fewer days of coverage, fewer number of visits allowed, less frequent visits. Financial Requirements: Not applied to M/S benefits or larger cost-sharing burden for the patient.

Six Classifications for Comparisons Inpatient/ In-Network Inpatient/ Out-of-Network Outpatient/ In-Network Outpatient/ Out-of-Network Prescription Drug Emergency Care

Cross-Classification Parity To the extent an insurer provides a benefit for a MH/SUD service in one of the six classifications, it must provide a MH/SUD benefit in each of the classifications in which the plan offers a M/S benefit. If a plan’s formulary offers a prescription medication for a mental health disorder, the plan must also offer inpatient, outpatient, and emergency care treatment for the disorder if the plan offers M/S benefits in those classifications.

Test for Quantitative Treatment Limitations and Financial Requirements Does this financial requirement or treatment limitation apply to “substantially all” (2/3) of the M/S benefits in the same classification based on projected plan payments What level of the restriction may be imposed on MH/SUD treatment: Predominant Level – the value that applies to at least 51% of M/S benefits in the same classification based on projected plan payments The value placed on the MH/SUD benefit may not be more restrictive than the predominant level Different cost-sharing requirements or lengths of stay for MH/SUD benefits than M/S benefits within the same classification (e.g. out- patient in-network) may flag a possible parity violation

Cumulative Financial Requirements and Quantitative Treatment Limitations Benefits that are dependent on meeting a threshold level such as a deductible, maximum out-of-pocket expenses, or day or visit limits. A plan may not apply any cumulative financial requirement or treatment limitation that accumulates separately for MH/SUD and M/S benefits in that same classification A plan may not impose a $250 deductible on all M/S benefits and a separate $250 deductible on MH/SUD benefits. A single deductible may be applied and is reduced down by use of either MH/SUD or M/S services

Annual and Lifetime Limits A dollar limitation on the total amount of specified benefits that may be paid under a group health plan No AL/LL may be applied to MH/SUD if the limit does not apply to at least 1/3 of M/S benefits If AL/LL applies to 2/3 of the M/S benefits: Plan may impose an AL/LL on MH/SUD benefits Plan may impose that limit to both M/S and MH/SUD benefits Plan may impose a separate limit on MH/SUD benefits, but it may not be lower than the limit imposed on 2/3 of the M/S benefits.

Non-Quantitative Treatment Limitations A restriction that limits the scope or duration of benefits under a plan but is not expressed numerically Examples Medical management standards (medical necessity criteria) Utilization management (UM) practices (authorizations) Formulary design in pharmacy benefit Provider network admission standards and reimbursement rates Method for determining usual, customary charges “Fail First” policies or step protocols Exclusions based on failure to complete course of treatment

Parity Test for Non-Quantitative Treatment Limitations An NQTL for MH/SUD benefits must be comparable to and applied no more stringently than the standard for M/S benefits Are the processes, strategies, and factors the plan uses to impose these limitations on MH/SUD benefits the same considerations as those used to impose an NQTL on M/S benefits? Are they applied more stringently to MH/SUD benefits? Recognized clinically appropriate standards of care may permit a plan to apply different standards.

Applying the Standard Processes, Strategies, Factors Use of algorithms, reference to medical literature or guidelines developed by clinical experts, Committee review Decisions based on clinical efficacy, price variation, practice variation, provider qualifications and credentialing, utilization above national benchmarks. Applied no more stringently Is there a separate threshold, more rigorous application of these processes, strategies, factors when applying the NQTL to MH/SUD services? Clinically Appropriate Standard Nationally recognized standards of practice or treatment outside the plan’s own standards.

Prescription Drug Benefits A formulary may apply different financial requirements to different tiers of prescription drug benefits based on reasonable factors: Cost Efficacy Generic versus brand name Mail order versus pharmacy pick-up Cannot distinguish based on whether a drug is used to treat a mental health or substance use disorder Must comply with the relevant NQTL standards “Fail First” and Pre-Authorizations

Required Disclosures Medical necessity criteria (internal rule, guideline, used in denying a health benefit) Includes an explanation of the scientific or clinical judgment that supports its medical necessity determinations. Must provide medical necessity criteria for M/S benefit in same classification Provided to current or potential participant, beneficiary, or contracting provider Reasons for Denial of Reimbursement Must be furnished within 30 days of request

You think a health plan is not parity compliant… Now what? Step 1: Determine which law applies to the plan Step 2: Obtain written reason for denial of requested care Step 3: Gather information from Insurer Medical necessity criteria used Fail-first requirements Other basis for denial of requested care Step 4: File grievance under plan’s internal review process Step 5: Pursue external review Commercial plans file complaint through MIA Self-insured plans can seek external review through the plan (must meet federal or state system standards) Step 6: File Court Action

Enforcement Agencies Maryland Insurance Administration Fully-insured large group plan or individual policy (Commercial Plans) Individual Plans and Small Group Plans by 2014 Department of Labor Self-insured large group plans Department of Health and Human Services Non-federal government plans May take action against a State for failure to enforce

In Practice… Financial Requirements Non-quantitative Treatment Limitations Reimbursement Rates Pre-authorizations “Fail First” Policies Network Admission Standards

Analysis: Co-Payments Step 1: Proper classification Step 2 : Substantially All Determine if the financial requirement applies to 2/3 (substantially all) of the M/S benefits within the classification. Step 3: Predominant Level Determine the co-payment level that applies to at least 51% of M/S benefits. Step 4: More Restrictive Compare the co-payment for MH/SUD with the predominant level for M/S MH/SUD co-payment may be no greater than the predominant level

Co-Payments Outpatient ServicesIn-Network Medical/SurgicalCo-payment Level PCP Visit$20 Diagnostic Tests$20 Rehabilitative Services$25 Specialist Visit$30 Mental Health/ Substance Abuse Co-payment Level Individual Counseling$30

Co-Payments Outpatient Services In-NetworkProjected Plan Payments Medical/SurgicalCo-payment Level Total = $1,000,000 PCP Visit$2040% Diagnostic Tests$2015% Rehabilitative Services $2520% Specialist Visit$3025% Mental Health/ Substance Use Individual Counseling$30

Reimbursement Rates Non-Quantitative Treatment Limitation What process/factors/standards did the insurance provider consider when setting the psychiatrist’s rate as compared to the primary care doctor’s rate. Parity mandates that the same underlying standards be applied to both If not, then the insurer must demonstrate a justification for the disparity.

Reimbursement Rates Medicare rate as a benchmark: Many insurance carriers/plans set their reimbursement rate for medical providers at a fraction or multiple of the Medicare reimbursement rate. If an insurer sets a primary care physician’s reimbursement rate at the Medicare rate, but chooses a different method to determine a psychiatrist’s reimbursement rate, there may be a parity violation.

Pre-Authorization Utilization Management Practices – NQTL Identify the standards the insurer used to determine which services would have a pre-authorization requirement. Are the same standards applied for both M/S and MH/SUD benefits? Is the pre-authorization requirement being applied more stringently to MH/SUD benefits? Do M/S providers have to submit lengthy treatment plans? Are they also subject to lengthy phone calls? Is M/S treatment subject to pre-authorization every 5 visits? If the standards are not comparable, is there a clinically appropriate justification?

“Fail First” Look to the underlying processes and strategies used to determine when “fail first” is applied to both MH/SUD and M/S benefits Individually based for all health conditions or a blanket requirement for certain MH/SUD services? How are “fail first” requirements applied in the M/S context? Can be clinically appropriate if there an appropriate clinical justification for treating MH/SUD differently

Provider Network Admissions Identify the standards and processes the plan uses to credential MH/SUD and M/S providers Academic requirements Work experience Licensure Certifications Are the network admission standards the same for MH/SUD and M/S providers Potential Justifications Work requirement is built into the educational requirements for medical surgical providers but not for certain MH/SUD credentials Inconsistent training or credentialing standards across subfields in behavioral health Inconsistent licensing standards from state to state

2013 General Assembly Session: New Advocacy Opportunities Demonstration of Parity Compliance Would require all fully-funded insurance plans and plans sold in the Exchange to demonstrate compliance with state and federal parity laws Parity Compliance Requirement for Utilization Review Criteria Used by Private Review Agents Would require all utilization review criteria be certified by MIA as parity compliant Consumer Bill of Rights Would provide consumers with greater access to their insurance documents, clearer information about their rights under the law, and instructions on how to enforce those rights

Intersection with the ACA Requires individual and small group plans to offer MH/SUD benefits as one of ten essential health benefits. Individual and small group plans offered in the Exchange and in the commercial market must comply with the Parity Act. Prohibits annual and lifetime dollar limits on essential health benefits. Network adequacy standards for Qualified Health Plans (QHP): Must include essential community providers Sufficient number of MH/SUD providers to ensure services will be accessible without unreasonable delay QHP Issuer must provide access to provider directory identifying providers that are not accepting new patients

Scope of Services What’s at stake? Access to an appropriate continuum of care comparable to the continuum for medical conditions. IFR does not address scope of services but the Final Rule may Health plan has a statutory right to exclude MH/SUD coverage from their plans, but can a plan that offers MH/SUD benefits restrict the type of services offered? Coverage for intermediate levels of care: intensive outpatient, partial hospitalization and residential treatment.

Scope of Services Federal Regulations Govern the Scope of MH/SUD Services Treatment limitations are defined to include standards that affect the “scope” of care Requires parity across classifications to prevent limitations on services Act regulates NQTLs because they limit care and a restriction on scope of services is a direct limitation on care.

Scope of Services A standard that results in a service restriction for MH/SUD benefits is an NQTL. Is the standard applied to M/S benefits? Insurers must provide a clinically acceptable justification for limiting access to specific MH/SUD services. Evidence demonstrates a full continuum of MH/SUD services is needed to treat conditions of different severity and improves the quality of healthcare for MH/SUD patients

Contact Us University of Maryland Francis K. Carey School of Law: Drug Policy and Public Health Clinic Eugene Simms, Student Attorney Vicki Chihos, Student Attorney Ellen Weber, Supervising Attorney Mental Health Association of Maryland: Maryland Parity Project Adrienne Ellis, Director (410) Ext. 206