Short-Term Analysis to Support Mental Health and Substance Use Disorder Parity Implementation. Executive Summary


This paper describes analyses commissioned by the U.S. Department of Health and Human Services (HHS) to inform the implementation of the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. This law generally requires that mental health and substance use disorder (MH/SUD) insurance benefits be comparable to the benefits for medical and surgical care. Coverage of MH/SUD services has often been more limited than most other health services with, for example, more restrictions on the number of outpatient visits or inpatient days covered and higher co-pay requirements.

The MHPAEA requires group health plans and group health insurance issuers to ensure that financial requirements (e.g., co-payments, deductibles) and treatment limitations (e.g., visit limits) applicable to MH/SUD benefits are no more restrictive than the predominant financial requirements or treatment limitations applied to substantially all medical-surgical benefits. The Interim Final Rules (IFR) implementing the MHPAEA clarified that there are other types of treatment limits, beyond those listed as examples in the statute, to which the principles of parity should apply. These other types of treatment limits are referred to in the IFR as “non-quantitative treatment limitations” (NQTLs) and are defined as limits that are not expressed numerically but otherwise limit the scope or duration of benefits. NQTLs are further described as including the broad array of health care management policies and practices designed to contain costs of health care, including: medical necessity definitions and criteria (claims not covered unless care is deemed medically necessary); utilization management (UM) practices (preauthorization, concurrent review, retrospective review to determine medical necessity); formulary design in the pharmacy benefit (tiers of medications with differing co-pays/maximum days filled); and provider network management (credentialing and inclusion/exclusion of providers from networks, establishing fees for in-network providers, setting “usual, customary and reasonable” fees for out-of-network providers).

To better understand how health plans and issuers use these NQTLs to manage access to care, HHS commissioned a study to gather information from health plans and practitioners. This paper summarizes interviews with managed behavioral health industry experts and the discussion by a panel comprised of well-known researchers and practitioners with clinical expertise in MH/SUD treatment as well as general medical treatment, experience in developing evidence-based practice guidelines, and knowledge of how plans use NQTLs.

The information provided by managed behavioral health industry experts and the deliberations of the Technical Expert Panel were focused on how NQTLs are used by plans and insurers to manage MH/SUD benefits and any clinical justifications for variations in how NQTLs apply to MH/SUD benefits compared to medical benefits. The Expert Panel discussed three main categories of NQTLs: medical necessity definitions and criteria, UM practices, and provider network management. The panel discussed a number of processes, strategies, and evidentiary standards that they considered justifiable considerations for plans and insurers to use in establishing NQTLs for MH/SUD and medical-surgical benefits. The justifiable considerations identified by the panel included evidence of clinical efficacy, diagnostic uncertainties, unexplained rising costs, availability of alternative treatments with different costs, variation in provider qualifications and credentialing standards, high utilization relative to benchmarks, high practice variation, inconsistent adherence to practice guidelines, whether care is experimental or investigational, and geographic variation in availability of providers. The panel also discussed how the standard in the IFR requires that these considerations be applied in a comparable way to MH/SUD benefits and medical-surgical benefits in determining how a plan or insurer will apply an NQTL. Furthermore, the panel discussed situations in which the outcome of applying these considerations in a comparable way may justifiably result in a different application of an NQTL to MH/SUD benefits compared to medical-surgical benefits.

Another issue identified by HHS as meriting additional research was the implications of the MHPAEA for the scope of services that health plans must offer. The IFR requested public comment on this question. To inform policy-making on this topic, HHS commissioned research into current coverage of intermediate level services for MH/SUD by health plans. In behavioral health care, as in general medical care, there is a continuum of services that lie between inpatient and outpatient care that have been shown to effectively treat some MH/SUD, and in some cases do so more cost-effectively than inpatient care. Examples of such intermediate forms of behavioral health care include non-hospital residential services, partial hospitalization services, and intensive outpatient services including case management and some forms of psychosocial rehabilitation. Although such services are provided in employer plans, there has been little quantitative information available on the extent to which these services are covered and utilized.

This paper includes an analysis of the Thomson Reuters MarketScan data that offers several insights into the extent to which employer plans included coverage for these services prior to the implementation of the MHPAEA and at what cost. Descriptive analyses showed that the average cost per member per month (PMPM) for all plan-provided health care was found to be $268. Almost all of these costs are for medical-surgical services and related prescription drugs. Behavioral health services accounted for $12, or 4.6% of total PMPM costs. Furthermore, the vast majority of the cost for behavioral health was for behavioral health prescriptions ($7.46).

Intermediate behavioral health services -- those that lie between inpatient and outpatient care -- were provided by employer plans in 2008, although the results differed greatly for each service. Examples of such intermediate services are non-hospital residential treatment, partial hospitalization, and intensive outpatient treatment. Almost all of the employer-based plans had claims for intensive outpatient treatment (98%), most had claims for partial hospitalization (59%), but few had claims for non-hospital residential treatment (18%). Together the additional cost of providing these three services represented a very small fraction of the average total plan cost in 2008 ($2.40 PMPM or 0.9%).

These findings on current levels of coverage of these intermediate services are helpful in considering the effect of applying a parity requirement to the scope of services that plans cover. They indicate that these types of services are already covered to some degree. However, in order to estimate the effect of imposing a parity requirement further research is needed to estimate the degree to which these current coverage levels of intermediate services may change to meet a parity standard.

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