Payers, Legal

Coverage parity for mental health, substance abuse, a key focus for insurance regulators

Health insurers are prohibited from placing unfavorable limits on mental health and substance abuse benefits, and yet, many do. Federal and state regulators are taking aim at these practices and making the enforcement of the Mental Health Parity and Addiction Equity Act of 2008 a key focus.

health insurance, payers, group insurance

Though a federal law prohibiting health insurers from discriminating against people with mental health and substance abuse issues has been in place for more than a decade, enforcement can be a challenge. But amid a pandemic that has significantly worsened these issues, regulators at the national and state levels say they are focused on safeguarding insurance coverage parity now more than ever.

In a webinar last week hosted by mental health organization Inseperable, U.S. Labor Secretary Marty Walsh outlined the ways in which his department is working to enforce the Mental Health Parity and Addiction Equity Act of 2008,

The law prevents group health plans and health insurance issuers from imposing less favorable limitations on mental health and substance use disorder benefits as compared to medical/surgical benefits. For example, prior to the law’s passage, health insurers could charge higher copays or deductibles to those with documented behavioral health issues and apply stringent treatment limitations, including on the types of facilities patients with these issues could visit.

To uphold the law and ensure parity in coverage, the labor department has two strategies in place, Walsh said.

The department’s Employee Benefits Security Administration agency has created a task force that focuses on enforcement of the act, he said. The task force is reviewing its inventory of case files, looking to identify potential violations and send out requests to payers for data on parity analyses, which they are required to maintain to show their compliance with the law.

Further, the Department of Labor, along with other government agencies involved in this work such as the Department of Health and Human Services and Internal Revenue Service, is providing regular reports to Congress on their findings and enforcement actions, Walsh said. This can help inform legislation on insurance coverage moving forward.

“From day one, after I got sworn in, I emphasized that our enforcement in the [parity] arena needs to be a priority,” Walsh said. “Group plans and insurers have to be able to show their work if they are claiming to meet parity requirements.”

But enforcement cannot be at the federal level alone. States also play a key role in ensuring that people with mental health and substance use problems do not get the short end of the coverage stick.

On the ground, access to care is still a major issue for those with these disorders, said Ann Marie Sullivan, mental health commissioner of New York, during the virtual discussion. Many insurers require multiple treatment plans before signing off on treatment and provide narrow networks for psychiatrists and other professionals specializing in behavioral health and addiction medicine.

To counter these actions, New York regulators have taken a comprehensive approach to enforcement, Sullivan said. Government plans must work with the state on both the quantitative limits on mental health and substance use disorder benefits, such as caps on inpatient stays, and non-quantitative limits, like medical necessity criteria, which was the subject of a major lawsuit against an insurer two years ago.

In 2019, a federal judge ruled that United Behavioral Health, a subsidiary of UnitedHealth Group, illegally denied mental health and substance use disorder treatment coverage to members using internal criteria that was too restrictive. The payer was ordered to reprocess about 67,000 coverage claims.

Sullivan believes the government needs to step in and oversee the development of that criteria. In New York, all payers providing mental health and substance use disorder benefits must submit their medical necessity criteria to the state for approval.

“You have to change the culture of the [health] plan,” Sullivan said. “You have to say to a plan, look at how you are treating mental illness and substance use the same as medical [illness].”

Strengthening oversight is just one piece of the enforcement puzzle, however. Regulators further need to create a pathway for the public to bring forward coverage issues, Sullivan said. New York created an ombudsman program, called the Community Health Access to Addiction and Mental Healthcare Project, to help residents access their insurance benefits for substance use disorders and mental health services and resolve denials.

“The key thing here is a comprehensive approach,” Sullivan said. “You can’t just take one or two points — you have to look at the whole approach to parity. You have to look at all the things that can interfere with [people] getting the care that they need.”

Photo: AndreyPopov, Getty Images