Mental Health Parity and Addictions Equity Act of 2008 (MHPAEA) Interim Final Rules Spring 2010 Edward Jones, PhD Paul Rosenberg, JD

2 When? Who? Effective for covered plans with plan years beginning on or after July 1, Issued jointly by IRS, DOL, and CMS. Covers federally regulated ERISA plans and state-regulated insured plans. Medicaid managed care plans will be covered by separate rules issued solely by CMS. Excluded plans are those under 50 employees, those that utilize a complex cost opt-out after year one, government employee plans that opt out, and Medicare.

3 Key Provisions Cumulative treatment limitations – As provided in the 1996 Act, separate but equal annual and lifetime limits remain permissible. Other cumulative treatment limitations, i.e., deductibles and out-of-pocket maximums, must be combined. Six benefits classifications are created – Inpatient, in-network and out-of-network – Outpatient, in-network and out-of-network – Emergency care – Prescription drugs Medical and MHSA parity is measured within each classification – This provision impacts “carved-out” and “carved-in” plans equally. – Out-of-network MHSA coverage must be equivalent to the medical coverage in each benefits classification. This increases the value of ValueOptions ® large provider network.

4 Limited pre-emption of state law – State laws that mandate more coverage (e.g., $36k/year autism mandate in PA) or less restriction (e.g., New York’s utilization review law) control. However, ERISA exemption remains intact. – For state insurers governed by state laws, MHPAEA then removes the cap from such state mandates, unless the rule is clarified. Co-payment differentials – MHSA office visits must be assigned the lowest relevant co-payments, i.e., “primary care” vs. “specialty.” Plans that can demonstrate that a higher co-payment is “predominant” in the medical benefit may apply it to MHSA. EAP as gatekeeper – Plans may not require members to utilize an EAP before accessing MHSA benefits unless a similar requirement applies to medical-surgical benefits. Nonetheless, the incentive to promote EAP use remains intact. Key Provisions, cont’d

5 Non-quantitative treatment limitations – Non-quantitative treatment limitations, including medical management and establishment of reasonable and customary rates, must be applied “no more stringently” to MHSA than to medical-surgical benefits. Variations are permissible “to the extent that clinically recognized appropriate standards of care may permit a difference.” Alternate levels of care – The rules defer regulation of levels of care that exist only for MHSA treatment (e.g., day treatment, RTC). It is likely that ALOC services will ultimately be regulated. ValueOptions ® recommends careful medical management of these services. Key Provisions, cont’d

6 Next Steps Review medical and MHSA benefit plans to perform parity comparison and document rationale for both benefit and clinical policy decisions. ValueOptions ® will establish accumulator exchange process with medical plan at no cost. ValueOptions ® will continue to work with the Association for Behavioral Health and Wellness (our trade association group) to further understand the thinking and next steps by regulators.

Questions 7