National Alliance on Mental Illness
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The Federal Parity Law's New Regulations
A new law designed to improve coverage for mental illness and substance abuse treatment recently went into effect for many group health plans across the country.
The new law, known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, requires most group health plans to cover treatment for mental illness and substance use disorders on the same terms and conditions as medical conditions such as diabetes, heart disease, cancer and asthma. Specifically the new law bars health plans from imposing durational treatment limits (caps on inpatient days or outpatient visits) or financial limitations (higher cost sharing, deductibles or out of pocket limits) that do not also apply to medical-surgical coverage.
The effective date of the new law is actually the beginning of the first new plan year after Oct. 3, 2009. The new law applies to all group health plans sponsored by employers with 50 or more workers.
Agencies Issue Interim Final Parity Regulations
On Feb. 2, 2010, the Departments of Health and Human Services, Education, Labor and Treasury released interim final rules providing guidance on how the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. The regulations are available online.
At first glance, the regulations-which Interim Final with a comments period-appear to be a huge victory for consumers and families. The regulations adopt a robust standard for medical-surgical benefits that mental health benefits must be comparable to, specifically, "predominant" and "substantially all" of medical-surgical coverage. In addition, the regulations include comprehensive definitions of treatment limits and financial limitations for which parity is required.
Finally, and most importantly, the regulations provide new standards with respect to equitable coverage for "non-quantitative" treatment limits, which are defined in the regulations as medical management, drug formulary design, step therapy, "fail first" policies and exclusions from coverage based on failure to complete a course of treatment. This means that the standards for equitable coverage will apply to discriminatory application of medical management techniques as applied to mental illness treatment.
It is important to note that these interim final rules regulations are not the last word implementation of the new parity law. A separate guidance is expected soon from the Centers for Medicare and Medicaid Services to states on how the law will apply to Medicare managed care plans. In addition additional guidance is expected later on the law's allowance for a cost increase exemption.
Effective Date of the Regulations
This IFR goes into effect on April 5, 2010, and will apply to group health plans with plan years starting on July 1 or later. Those plans that were charged with compliance for a plan year that began on Jan. 1, 2010 will be given a good faith exception for compliance with the regulations until July 1.
Scope of Service
The IFR divides benefits into six classifications:
Within each classification, if a plan provides MH/SU benefits, those benefits must be provided at parity with the medical/surgical benefits provided in that classification.
In addition, the Departments are encouraging public comments on whether and to what extent the Parity Act addresses scope of services or continuum of care provided by insurance plans (information about how to submit public comments is included in the IFR).
Cumulative Financial Requirements
The IFR prohibits plans from instituting separate deductibles, copayments, and out-of-pocket limits for MH/SU and medical/surgical benefits. Any deductibles, copayments and out-of-pocket limits required by the plan must be integrated and cumulative for all services.
NAMI is currently working through the "Parity Implementation Coalition" to develop comments in the on the Interim Final Rule. NAMI will also be urging NAMI state and local affiliate organizations to do the same in advance of the May 3, 2010, comment deadline.
Click here to view NAMI's comments that were submitted to the agencies in the spring of 2009 on the Request for Information (RFI) on issues related to the implementation of parity.