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In 2008, Congress passed the Mental Health Parity and Addiction Equity Act, which requires health insurers to offer the same level of benefits for mental health and substance abuse that they do for physical health. But the federal government didn't issue regulations explaining the law until five years later, leaving states reluctant to enforce it. In the case of parity rules for Medicaid plans, the federal government just released enforcement rules Monday.
Advocacy groups and researchers are also bringing greater attention to the issue. In a new survey and report, the National Alliance on Mental Illness (NAMI) found nearly 30 percent of respondents were denied a medically necessary mental health visit. A Johns Hopkins Bloomberg School of Public Health study released last month found that one quarter of plans offered through state health insurance exchanges are out of compliance with the federal parity law.
To enforce the federal parity law, state insurance commissioners can fine, sue, de-certify plans or force insurers to review denied health claims. State attorneys general also have investigative resources and powers. Forty-eight states have their own mental health parity laws, though 19 of them are limited in scope and only a handful cover wide-ranging mental health and substance abuse issues like the federal law, according to NAMI.
Citing both New York and federal law, Schneiderman recently announced a settlement -- the fifth in the last year -- with a regional Blue Cross Blue Shield plan. Rochester-based Excellus was found to have rejected inpatient addiction treatment at least twice as often as inpatient medical services between 2011 and 2014. Under the settlement with Schneiderman’s office, Excellus is now required to reform its claims-review process and let more than 3,000 members appeal previous rejections, which could lead to a $9 million payout for patients.
Schneiderman said he hopes his aggressive enforcement approach can serve as a model for other states. His office is not only seeking to find differences in coverage but also in deductibles and so-called "nonquantitative" differences, like how insurers are processing and denying claims. Some say New York could spur other states to enforce parity laws, but probably not as aggressively.
“Not many other AGs are looking to do something like this, for a lot of different reasons, not the least of which is they’re very complicated cases,” said Andrew Sperling, the director of federal legislative advocacy for NAMI. Making a case means proving that an insurer is not only skimping on a mental health or substance abuse service but showing there’s a comparable offering on the physical health side that’s treated differently. “It’s a lot of leg work and a lot of hours from attorneys that they’re not chasing bank robbers or someone else.”
That elevates the importance of insurance commissioners to enforce parity, a task they’ve so far generally shied away from. That's in large part because the federal government didn’t issue regulations for the 2008 parity law until years after it was passed, and even now, commissioners need more enforcement guidance so they feel comfortable acting, said Laura Goodman of Health Law Advocates, a Massachusetts-based group. “A lot of states are struggling with ... how they should be reviewing these plans for compliance and how they should launch an investigation,” she said.
But the inactivity also reflects a longstanding perception that mental health benefits aren't as vital as physical health benefits, argues Alice Dembner, a project director at the advocacy group Community Catalyst. “Unfortunately, [mental health] continues to be seen as not as important ... but we do think that [greater federal guidance will] specifically be very helpful for commissioners who are committed to enforcing this,” she said.
Washington state Insurance Commissioner Mike Kreidler issued guidelines for insurers to follow. (AP/Elaine Thompson)
What’s also helpful, though, is judges taking strong stances in favor of state and federal parity laws, said Eleanor Hamburger, a Seattle-based attorney who focuses on health insurance coverage. Just last month, for instance, a federal district court in Illinois ruled that the federal parity law prohibits insurers from refusing to cover inpatient treatment for mental health or substance abuse disorders if it covers it on the medical side.
In the case of Hamburger’s own state, Washington, the insurance commissioner has taken action following an October state Supreme Court decision prohibiting insurers from refusing to cover behavioral health services. Commissioner Mike Kreidler soon issued guidelines for insurers for complying with the parity law but also ordered them to re-evaluate denied claims going back to 2006 and contact former plan members.
“We didn’t need guidance from the state Supreme Court, but it certainly helped,” Kreidler said. “Given the heightened awareness of mental health needs and the clarity of federal law recently, I’d anticipate that more states will be taking their own actions in the near future.”
In the short term, Medicaid directors argue the new rules will mean greater costs -- about $150 million for state Medicaid agencies -- because of "disinvestment" from private plans. But tougher parity rules are a welcome development.
"Medicaid has quietly become the largest payer of mental health services in the country, in part because other payers have been able to shift these costs onto the safety net," said the National Association of Medicaid Directors, in a statement. "Medicaid directors are hopeful that parity ultimately helps to level the playing field ... and ultimately reduce future reliance on Medicaid."
