Evaluation of Parity in the Federal Employees Health Benefits (FEHB) Program: Final Report. Research Questions and Findings in Brief

12/31/2004

Implementation of the Parity Policy

Key Implementation Research Questions

  • Did all FEHB plans comply with the parity policy?
  • How did the FEHB parity policy affect MH/SA benefit design and management?
  • How did the FEHB parity policy affect the benefit design and management for general medical care?
  • Did FEHB plans incur additional expenses in implementing the parity policy?
  • How did providers experience the FEHB parity policy?

Implementation Findings

All FEHB plans complied with the parity policy. No plan left the FEHB Program to avoid implementing the parity policy, and plans enhanced their MH/SA nominal benefits as required by the policy change. According to most (two-thirds) of the FEHB plans, they incurred no added administrative cost in implementing the parity policy. Effective benefits changed most dramatically in regards to the increased likelihood that, post-parity, FEHB plans would enter into managed care carve-out arrangements with specialty behavioral health care organizations (in comparison to non-FEHB plans without a parity policy). Most other hypothesized post-parity changes occurred less frequently than had been anticipated (e.g., increased gatekeeping at the primary care physician level, reduced provider networks, and increased financial risk sharing). FEHB plan providers had little awareness of the parity policy implementation and very limited understanding of the parity benefit for Federal employees.

Impact of the Parity Policy

Key Impact Research Questions

  • How did the parity policy affect access to and utilization of MH/SA care?
  • How did the parity policy affect cost of MH/SA care to the beneficiary and OPM?
  • How did any changes in these areas compare to secular trends?
  • Was quality of care affected by the parity policy?

Impact Findings

Overall, the impact of the parity policy on MH/SA service access and utilization, spending, and quality was modest. The probability of MH/SA use and expenditures increased for FEHB plans in the post-parity period, but at about the same rate as in a matched set of non-FEHB comparison plans. Thus, the FEHB plan increases generally reflected secular trends in utilization and spending. However, access to SA services did increase slightly but significantly in all of the nine FEHB plans studied, after accounting for secular trends. Utilization and spending results for MH services alone were not substantially different from those results for MH/SA services, nor were utilization and spending results for adults and children significantly different from one another.

The FEHB parity policy appears to have afforded beneficiaries some improvement in insurance protection in that beneficiaries in some of the nine plans experienced significant post-parity decreases in out-of-pocket spending, while no plan’s beneficiaries’ experienced an increase when compared to beneficiaries in matched non-FEHB plans. Quality of MH/SA care for two tracer conditions--major depressive disorder and substance use disorders--was slightly improved or unaffected by the parity policy.

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