Mental health parity implementation update
January 27, 2011— On January 1, 2011 the new mental health parity regulations took effect for most health plans. These regulations, issued by the executive branch in February 2010, provide details on how the federal government will interpret and enforce the Wellstone-Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008.
While a special section of the Winter 2011 Good Practice magazine answered general questions about the MHPAEA (PDF, 229 KB), such as what health plans are covered, this article focuses on two particular issues associated with the law: insurers’ benefits management techniques, such as requiring authorization or telephone reviews; and plans electing simply to drop mental health coverage to avoid compliance with parity requirements.
Benefits Management Victory in Illinois
In June 2010, the American Psychological Association (APA) Practice Organization became aware that Blue Cross Blue Shield of Illinois (BCBS-IL) intended to change its mental health benefits management. BCBS-IL announced two new authorization requirements for outpatient therapy. The patient or provider would need to obtain pre-authorization before care began or for any care continuing into 2011. The company described this as a simple “check in” that would allow for BCBS-IL to track and coordinate mental health care. The pre-authorization would allow the patient 10 initial sessions, after which BCBS-IL would conduct a full medical necessity review before granting re-authorization.
The APA Practice Organization (APAPO) worked closely with the Illinois Psychological Association (IPA) to address the BCBS- IL proposal. As January approached, it became clear that BCBS-IL was not prepared to implement the new authorization requirements. For example, online pre-authorization would not be available for the first three months of 2011, creating the specter of jammed telephone lines for obtaining authorizations.
APAPO helped IPA prepare an urgent letter to BCBS-IL asserting that the company’s inability to implement the new requirements smoothly heightened IPA’s objection that the company was not applying the same authorization requirements to most medical services. IPA argued that an overloaded authorization system would create an even higher barrier to patients seeking mental health care. The letter noted that a very similar authorization system that BCBS of Florida began in January 2010 created months of chaos when the online approval system failed to work. IPA urged the Illinois Blues not to repeat that debacle. IPA also urged members to express their concerns to the Illinois Department of Insurance, which investigated whether BCBS-IL’s proposal complied with parity.
IPA’s efforts, combined with those of other mental health organizations in the state, paid off. Over the December 2010 holidays, BCBS-IL announced that the company was withdrawing the authorization requirements for outpatient therapy. In consultation with psychological associations in states where BCBS companies have imposed similar authorization requirements, APAPO is working to determine the extent to which the Illinois arguments and success can be replicated elsewhere. Further, we are monitoring the extent to which insurers are continuing or implementing other objectionable benefit management practices, such as intrusive telephone reviews, beyond January 1.
The organization intends to pursue appropriate advocacy efforts if we discover objectionable practices. “APAPO will be following these developments very closely and working to ensure that the progress made so far with the [parity] law’s passage and the . . . guiding federal rule indeed become reality,” said APA Executive Director for Professional Practice Katherine C. Nordal, PhD in the January 2011 issue of APA’s Monitor on Psychology.
Mental Health Coverage Reversal in Pennsylvania
The federal parity law does not require health plans or employers to offer mental health coverage. But when they do, the coverage must be provided at parity with physical health services. As expected, few employers have dropped mental health coverage due to the law. Of those that have taken this step, some claim to have done so to avoid the cost of complying with parity – despite projections that parity compliance would have only a minimal impact on health insurance costs. The Congressional Budget Office estimated an average cost increase of 0.4 percent. Moreover, a September 2010 report from the Kaiser Family Foundation indicates that only about 1.2 percent of insurers planned to drop mental health coverage in reaction to new parity requirements.
When Capitol Blue Cross of central Pennsylvania said in late 2010 that it would no longer provide mental health coverage under individual plans, the Pennsylvania Psychological Association and others reacted quickly. Capital Blue Cross reversed its position and announced early in January that it would not drop mental health coverage.
As with the mental health benefit management issue, APAPO is still monitoring this issue. Please contact us by e-mail with any information about a major plan or employer that has indicated that it intends to drop mental health coverage.