Update on Health Insurance Parity Rules

The Centers for Medicare and Medicaid Services (CMS) recently released a final rule elated to implementation of the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. This final rule clarifies how parity rules will apply to Medicaid managed care plans, Children’s Health Insurance Plans (CHIP) and Alternative Benefit Plans (ABPs), which apply to individuals with Medicaid coverage due to the Affordable Care Act’s (ACA) Medicaid expansion. A number of rules that could affect substance use disorder (SUD) patients and providers were clarified by this document.

Under MHPAEA (as extended by the ACA), mental health and addiction treatment benefits must be provided at parity to those of medical/surgical benefits in most health plans, including large employer-based insurance, individual plans sold in the ACA Marketplace and Medicaid managed care plans. This means that the financial requirements like copays and treatment limitations (even non-quantifiable limitations like utilization management) on mental health and addiction benefits can be no more restrictive than what the plan applies to medical and surgical benefits. For example, co-pays for in-patient or out-patient treatment must be the same, whether the treatment is for mental health/addiction or for general medicine/surgery. Networks of providers, tiering of prescription drugs, and utilization management such as prior authorization is allowed, as long as classifications are defined by “reasonable factors” not specifically used to separate mental health/SUD providers or medications from medical/surgical providers or medications. The final rule makes it clear that cost factors and existing state contracts with managed care are not valid reasons for parity regulations not to be implemented within 18 months.

A few parts of the final rule should improve patients’ ability to access addiction treatment, including a rule that health plans cannot exclude coverage based on a failure to complete a course of treatment. The rule also notes that lifetime limits on a prescription medication used to treat addiction, such as buprenorphine, are not allowed if there are not lifetime or time limitations for medications used to treat physical or other mental health conditions.  States must define mental health conditions in a way that is consistent with independent standards of medical practice, including the current version of the Diagnostic and Statistical Manual of Mental Disorders.

For patients covered by plans with provider networks, the rules for accessing out-of-network providers must be comparable for medical/surgical and mental health/SUD providers.  Additionally, plans must make medical necessity determination criteria available when requested and must give a reason for denial of coverage.
During the recent ASAM Annual Conference, the Saturday morning Policy Plenary focused on MHPAEA implementation to date. Three speakers, Sam Muszynski from the American Psychiatric Association, Dr. Doug Nemecek from Cigna Health Insurance and Michael Reisman from the NY State Attorney General’s office, explained the history of the law as well as subsequent efforts to implement and enforce the law. The audience asked a number of questions, including: 

• How do I help advocate for patients if I suspect there may be a parity violation? Suspected parity violations should be reported to the entity that oversees the type of insurance plan that may be violating the law. Providers can report violations, encourage patients to report violations and support patients who appeal insurance company decisions. However, different regulators have jurisdiction over different types of health insurance, so there is no one place to report violations. You can use this guide to help you determine to which jurisdiction suspected violations should be reported.

• Should health plans be covering treatment for nicotine addiction? Tobacco cessation is required to be covered in ACA individual health plans and ABPs, which must cover preventive services and substance use disorder treatments. However, if a health plan covers it under SUD treatments, there may be a co-pay or deductible required.  Employer-sponsored health plans also must cover tobacco cessation as a preventive benefit. Traditional (FFS) Medicaid must cover tobacco cessation (medications and counseling) for pregnant women and people under 21 years old but must cover only tobacco cessation medications, including over the counter, for other people covered by Medicaid. Medicare patients have coverage for tobacco cessation, except for over-the-counter medications. At minimum, all patients should have coverage for tobacco cessation prescriptions but some patients will have a co-pay or deductible.

While parity in insurance coverage for mental health and substance use disorders is being implemented, there will continue to be issues related to parity that affect access to treatment for patients with addiction. ASAM wants to know if you encounter these issues, so be sure to share them with us by using our issue reporting form available here.