Short-Term Analysis to Support Mental Health and Substance Use Disorder Parity Implementation. Medical Necessity Determinations


  • Stepped care requirements can be in violation of parity if these are applied in ways that are not clinically appropriate for behavioral health conditions. Routinely requiring outpatient treatment before covering inpatient or residential treatment for behavioral health conditions (for example, for treatment of substance use disorders) would be inequitable, since such requirements are not routinely applied for general medical conditions. But stepped care requirements can be clinically appropriate for some patients (e.g., with uncomplicated and less severe substance use disorder) when stepped care is consistent with accepted clinical guidelines.

    • There is an analogue in general medical care -- treating pneumonia in a frail, elderly person who lives alone. Treatment for pneumonia can often be ambulatory, but not in every case. The question would be, is the inpatient admission clinically justified? A “blanket rule” against behavioral health inpatient admissions should not be allowed.

  • Medical necessity determinations are guided by specific clinical guidelines and/or criteria that plans adopt and update based on processes of review and evaluation of clinical evidence, and on other information such as costs, practice variation, etc. If these processes and criteria hold behavioral health services to higher clinical evidence standards than general medical services, then medical necessity determinations are not equitable and do not meet parity requirements.

    • Cost and efficiency considerations, per se, do not violate parity. For example, medical necessity criteria may result in reimbursement for the less costly but denial of the more costly of two alternative treatments that are equally effective and safe. If such cost and efficiency considerations apply to behavioral health medical necessity determinations, however, they must also apply for general medical determinations by the medical plan.

  • Routinely reimbursing for self-management and educational services for chronic general medical conditions (such as diabetes) but denying these kinds of services for severe and persistent mental illness is inequitable and does not meet parity requirements.

    • Clinical evidence supports use of certain kinds of self-management and educational services in both cases. If clinical evidence were similarly evaluated, and patient education and self-management services were differentially reimbursed based on level of evidence of clinical appropriateness, then different medical necessity determinations would be justified.

  • “Fail-first” requirements may be clinically appropriate. For example, medical necessity determinations may deny reimbursement for a brand name antidepressant medication until the patient first tries and fails a generic antidepressant medication. If fail-first requirements such as these are applied in the behavioral health benefit, however, they must also be applied in a comparable fashion in the medical benefit.

    • There are some instances in which different fail-first requirements would be clinically appropriate. For example, if there is a laboratory test that can be administered to help determine which of several alternative medications to use for a particular medical condition -- and there is no such test to help decide which antidepressant to use -- that could be a reasonable basis on which to require a “fail-first” policy for generic antidepressants but not for medications for the medical condition, because the laboratory findings would determine the choice of medication in the latter case.

    • A fail-first requirement for oral antipsychotic medication before reimbursement of injectablemedication may not be clinically appropriate for some patients, because of adherence challenges with oral antipsychotic medications. Parity requirements imply that there should not be fail-first requirements such as these on the behavioral health side (e.g., fail-first requirements that disregard preferred medication choices based on adherence considerations) unless there are also such limits on the general medical side.

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