Federal Parity Regs - LAC Analysis

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Update from Washington: Highlights of the MHPAEA

Interim Final Rule

Legal Action CenterFebruary 18, 2010

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Legal Action Center: SAAS’s Voice in Washington, DC

Advocacy with Congress and the Administration

Expanding access to/support for alcohol and other drug prevention, treatment, recovery supports and research Resources (annual funding process) Policy changes (national healthcare reform, parity,

Medicaid expansions)

Eliminating discriminatory policies against people with addiction histories and/or criminal records

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What We’ll Discuss Today

The MHPAEA interim final rule and accompanying guidance Status and purpose of the rule Highlights of the rule Next steps

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Policy Goals of the MHPAEA

Eliminating certain forms of discrimination in insurance coverage of mental health and addiction treatment benefits

Expanding access to treatment for people with mental illness and/or addiction

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Background of the MHPAEA

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) became Public Law 110-343 in October 2008

The MHPAEA prohibits group health plans that currently offer coverage for drug and alcohol addiction and mental illness from providing those benefits in a more restrictive way than other medical and surgical procedures covered by the plan

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Status and Purpose of the MHPAEA Regulations

The MHPAEA rule and accompanying guidance was published in the Federal Register February 2nd

Issued jointly by Departments of Health and Human Services, Labor and Treasury

Seeks to provide greater clarity and guide implementation of the MHPAEA

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Status and Purpose of the MHPAEA Regulations (cont’d)

Rule issued as “interim final” Includes 90-day public comment period (closes

May 3rd) Specific areas for public comment Rule becomes effective April 5th

Group health plans and issuers with plan years beginning on or after July 1, 2010 required to comply

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Key Things to Keep in Mind

Preliminary discussion

Rule/guidance does not answer everything, lots of remaining questions/ambiguity

Scope of services/continuum of care not defined

Additional guidance expected

Departments ask for additional information in certain areas—public comment period, rule was issued as “interim final”

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Key Things to Keep in Mind

Parity does not require plans to offer MH and SUD benefits Parity requirements are only for group health plans that

choose to offer MH and/or SUD benefits

State laws providing greater consumer protections remain in effectContinuing ability of plans to manage benefitsHealth care reform…Compliance and enforcement—need for education and outreach

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Central Analysis to Determine Compliance with Parity

MHPAEA prohibits group health plans/health insurers offering SUD or MH benefits from applying financial requirements or treatment limitations to SUD or MH benefits that are more restrictive than the predominant financial requirements or treatment limitations applied to substantially all medical/surgical benefits

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Central Analysis to Determine Compliance with Parity (cont’d)

Rule defines “predominant” and “substantially all”

Gives guidance on how to determine whether financial requirements and treatment limitations imposed on SUD or MH benefits comply with the MHPAEA

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Rule Defines Key Terms: Financial Requirements

Financial requirements defined as including: Deductibles Copayments Coinsurance Out-of-pocket maximums

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Rule Defines Key Terms: Treatment Limitations

Rule distinguishes between quantitative treatment limitations and non-quantitative treatment limitations

Quantitative treatment limitations Day or visit limits Frequency of treatment limits

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Rule Defines Key Terms: Treatment Limitations (cont’d)

Non-quantitative treatment limitations Medical management tools Rule includes an “illustrative” non-exhaustive list:

– Medical management standards– Prescription drug formulary design– Fail-first policies/step therapy protocols– Standards for provider admission to participate in a network– Determination of usual, customary and reasonable amounts– Conditioning benefits on completion of a course of treatment

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Rule Identifies Classifications of Benefits for Purposes of the Parity Analysis

Six categories of classification of benefits: Inpatient, in-network Inpatient, out-of-network Outpatient, in-network Outpatient, out-of-network Emergency care Prescription drugs

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Comparing Medical/Surgical Benefits with SUD and MH Benefits

Rule states that group health plans offering benefits for an SU or MH condition or disorder must provide those benefits in each classification for which any medical/surgical benefits are provided If the plan provides medical/surgical benefits in

one of the classifications but does not provide SUD or MH benefits in that classification, that would constitute a treatment limitation

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Parity Analysis for Financial Requirements and Treatment Limitations: Same Type in Same Classification of Benefits

Rule specifies that, when examining whether SUD or MH benefits are being offered at parity with other medical/surgical benefits, must compare financial requirement or treatment limitation only with financial requirements or treatment limitations of the same type within the same classificationRule establishes standards to measure plan benefits

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Special Analysis for Non-quantitative Treatment Limitations/Medical Management Tools

Rule states that processes/factors used to apply non-quantitative treatment limitations to SUD or MH benefits in a classification have to be comparable to and applied no more stringently than the processes/factors used to apply to medical/surgical benefits in the same classificationGuidance acknowledges that there may be different clinical standards used in making these determinations

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Central Analysis to Determine Adherence to Parity

MHPAEA prohibits group health plans/health insurers offering SUD or MH benefits from applying financial requirements or treatment limitations to SUD or MH benefits that are more restrictive than the predominant financial requirements or treatment limitations applied to substantially all medical/surgical benefits

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“Predominance” Defined by the Interim Final Rule

Financial requirement or treatment limitation is predominant if it is the most common or frequent of a type of limit or requirement

Predominant level (amount) of a type of financial requirement or quantitative treatment limitation is defined as the level that applies to more than one-half of the medical/surgical benefits subject to the financial requirement or quantitative treatment limitation in that classification

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“Substantially All” Defined by the Interim Final Rule

If a financial requirement or quantitative treatment limitation on a medical/surgical benefit applies to at least two-thirds of the benefits in that classification, this is considered to be “substantially all” of those benefits If a type of financial requirement or quantitative

treatment limitation does not apply to at least two-thirds of the medical/surgical benefits in a classification, that type of requirement or limitation cannot be applied to SUD or MH benefits in that same classification

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Additional Highlights from the MHPAEA Rule/Guidance

Rule affirms that, for group plans offering MH or SUD benefits, where out-of-network medical/surgical benefits are provided, must also be provided for MH and SUD benefits

Guidance affirms that the MHPAEA does not preempt any State laws except those that would prevent the application of the MHPAEA

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Discussion of MHPAEA requirements applying to prescription drugs Parity requirements do apply Financial requirements imposed on drugs prescribed to

treat SUD or MH conditions must be compared with those imposed in same tier in which drug is classified

Plans can satisfy parity requirement for prescription drugs if they:

– Show they’re imposing different levels of financial requirements on different tiers of drugs based on “reasonable factors” and

– Without regard to whether the drug is generally prescribed for medical/surgical conditions or SUD or MH conditions

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Rule provides guidance on the two MHPAEA disclosure provisions requiring: Criteria for medical necessity determinations for

SUD or MH benefits be made available to participants and beneficiaries, and

Reasons for denial of reimbursement or payment for SUD or MH services be made available to participants and beneficiaries

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Additional Highlights from the MHPAEA Regulations

Guidance makes clear that there cannot be a separate classification of generalists and specialists in determining whether certain financial requirements or treatment limitations meet the MHPAEA parity requirements

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Guidance discussion of Employee Assistance Programs (EAPs): States that, generally, an EAP providing MH or SUD counseling

services in addition to MH or SUD benefits being offered that otherwise comply with parity, wouldn’t violate MHPAEA requirements

However, EAPs serving as gatekeepers (where participants are required to exhaust EAP benefits before can access MH or SUD benefits) would be considered a non-quantitative treatment limitation

If other gatekeeping processes with exhaustion requirements aren’t applied to medical/surgical benefits, would violate rule that non-quantitative treatment limitations be applied comparably/not more stringently to MH and SUD benefits

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Rule prohibits separate cost-sharing requirements or treatment limitations only imposed on SUD or MH benefitsRule prohibits insurers from setting up separate plans or benefit packages to try to avoid complying with the MHPAEA requirements; guidance states that separately administered benefit packages should be considered as a single plan

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Areas Identified as Subject to Additional Regulatory Action

Medicaid managed care plansProvision on exemption based on cost increaseDepartments would specifically like comment on: Whether additional examples on non-quantitative

treatment limitations/how parity analysis applies would be helpful

Whether/how the MHPAEA addresses the scope of services/continuum of care issue

What additional information would be helpful to ensure compliance with disclosure requirements

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Next Steps on Parity

Submitting comments in response to the interim final rule

Educating ourselves and others about the MHPAEA requirements—necessary to ensure compliance!

Continuing to fight for stronger protections for people in need of addiction and/or mental health care

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Keeping Yourself Informed

LAC and SAAS newsletters, updates and alerts

Contact Gab ([email protected]) or Dan ([email protected]) at 202-544-5478 with any questions

Thank you!