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

02/08/2012

Although this report does not provide estimates of the impact of the MHPAEA on private-sector health insurance plans, it does provide information on the extent of spending on behavioral health services by plans prior to the enactment of the MHPAEA. The MarketScandata provide several insights into how behavioral health services were provided by relatively generous employer-sponsored private health insurance plans in 2008. As indicated Table 6, the average cost PMPM is $268, but there is considerable variance in PMPM cost across plans. 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.

The vast majority of the cost for behavioral health was for behavioral health prescriptions ($7.46). Behavioral health prescription drugs represent the biggest share of total PMPM spending on behavioral health, and are therefore likely to be a bigger driver of costs than intermediate services of any kind.

We found that “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 plans had claims for intensive outpatient treatment (98%), most had claims for partial hospitalization (59%), but few had claims for residential treatment (18%). These services represented a very small fraction of the average total plan cost in 2008 ($2.40 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.

This descriptive analysis shows that the majority of spending on behavioral health services by health plans is on prescription drugs (61%). Intermediate services represent a far smaller share of total behavioral health spending (20%). Even if plans have high intermediate service utilization, these costs represent a relatively small percent of the total PMPM costs because the same plans also have high utilization of prescription drugs and medical-surgical services. A critical question for future work is why this is the case.

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