Written by Andrew Whitacre, NACo Health Associate.
Image from Flickr user wellstone.action.
This blog post is derived from a Q&A with Carol McDaid, Principal at Capitol Decisions and the Parity Implementation Coalition (PIC)
1) How do the Mental Health Parity and Addiction Equity Act (MHPAEA) and the Affordable Care Act (ACA) impact substance use disorders?
Enacted in 2008, the intent of the parity law is to ensure patients have access to non-discriminatory addiction and mental health benefits on par with the medical benefits offered by their health plan. Interim Final Regulations to implement the law were published in February 2010 and Final Regulations were published on November 8, 2013.
MHPAEA does not require a plan to offer mental health and/or substance use disorder (MH/SUD) benefits, but if the plan does so, it must offer the benefits on par with the other medical/surgical benefits it covers.
For example, a plan may not allow an individual to have as many appointments with a dermatologist as he or she needs but only cover 5 appointments with a psychiatrist.
However, the Affordable Care Act expanded MHPAEA’s protections to qualified health plans (individual and small group health plans offered in and outside the health insurance exchanges) and the benefits offered to the Medicaid expansion population have to offer addiction and mental health benefits and comply with the parity law.
2) Prior to the enactment of MHPAEA and the ACA, how have services for substance use disorders been covered or not covered by public and private insurers?
Together, MHPAEA and the ACA represent the biggest expansion of addiction and mental health coverage in a generation.
According to a 2013 Department of Health and Human Services report, prior to the enactment of the ACA, approximately 1/3 of individuals with health plans through the individual health insurance market had no coverage for substance use disorder services and nearly 20% had no coverage for mental health services.
In the small group market, while HHS found that 95% of individuals had MH/SUD benefits, those plans were not subject to MHPAEA and may have offered discriminatory benefits.
Additionally, 47.5 million Americans lacked health insurance entirely prior to the enactment of the ACA.
3) What populations are able to access coverage that requires parity? Are there plans that are not subject to parity requirements that will result in gaps for those needing substance use disorder services?
Today, MHPAEA applies to:
Effective January 1, 2015, the federal parity law also applies to:
Self-insured local and state government employee plans can opt out of the federal parity law. A list of plans that have applied for an exemption is available here.
Some plans may request an exemption from the law. If an employer-based plan can demonstrate that the requirements of the parity law have increased its health care costs by two percent in the first year that MHPAEA applies to the plan, or by at least one percent in subsequent years, they may ask to be exempt for the following year. Very few plans have exercised this option.
MHPAEA does not apply to:
Veteran’s Health Administration
Federal Employees Health Benefit Program (FEBHP) 4
Traditional Medicaid (fee-for-service, non-managed care)
4) What protections do MHPAEA and the ACA offer to individuals seeking coverage that have substance use disorders?
Generally speaking, if the addiction/mental health benefit is subject to stricter rules than the medical benefit covered by the plan, then there may be a parity violation.
Below are examples of common problems:
The insurer is requiring pre-authorization for outpatient visits when medical/surgical outpatient visits do not have to be pre-authorized or require preauthorization less frequently.
Provider reimbursement rates are too low compared to other medical providers, so the provider has to offer services out-of-network at discriminatory “usual and customary” rates as compared with providers of other medical services.
The insurance company says that the plan does not cover residential treatment or intensive outpatient care even though it provides these services for other medical conditions.
The provider or patient requested a copy of the reason for the claims denial from the insurance company and they will either not respond to the requests for further information, refuse to tell the provider/consumer how the plan medically manages other medical benefits, or they refer the provider/patient to an enormous website that is indecipherable.
The ACA also expands consumer protections by requiring that certain plans offer an addiction/mental health benefits.
5) How can parity violations be appealed?
If you believe a health plan is violating the parity law, the first step is to file an appeal with the health plan. Sample appeal letters and other materials to assist you are available at www.parityispersonal.org.
Appeals that are denied may be sent to a government oversight agency.
States have primary enforcement authority over health insurance issuers. As such, state insurance commissioners will be the primary means of enforcing implementation of MHPAEA. A list of state insurance commissioners is available in the toolkit for appealing denied claims at www.parityispersonal.org.
The U.S. Department of Health and Human Services (HHS), through its Centers for Medicare and Medicaid Services (CMS), has enforcement authority over state and local government employers, such as counties with self-funded health plans and issuers in a state that does not comply. The Department of Labor (DOL) has primary enforcement authority over self-insured employer plans.
6) What changes in coverage due to parity requirements are occurring across the country?
Substantial improvements have occurred related to quantitative treatment limitations that were historically placed in a more stringent way on addiction benefits. For example, more plans now have the same co-pays, co-insurance and deductibles on medical and addiction/mental health outpatient care.
When the final MHPAEA rule goes into effect for plan years on or after July 1, 2014, existing discriminatory limits on residential treatment and medications could be impacted.
7) What can county leaders do to increase access to substance use disorder services for individuals in their communities?
Ensure that relevant county staff are trained on the substance of the law
Perform readiness assessments to determine whether your county is or is not preparing to implement parity at the state and county level
Make sure plans that contract to provide health benefits to county employees are parity compliant. Audit these plans for parity compliance annually.
8) What are the continuing challenges for individuals seeking access to substance use disorders? How can county leaders address those challenges?
Consumers are reporting that discriminatory applications of cost controls are preventing them from accessing their addiction benefits at parity. Cost control techniques such as uneven application of prior authorization, “fail first” criteria, investigative or experimental standards or limited access to addiction medication continue to discriminate and preclude access to addiction treatment more than medical treatments are limited.
 While the statute applies to Medicaid Managed Care Plans, the MHPAEA Final Rule released on November 8, 2013 does not. More CMS guidance will be forthcoming
 “Non-grandfathered plans” are plans that were established after March 23, 2010
 The parity final rules apply to non-grandfathered individual plans for plan years beginning on or after July 1, 2014. As the majority of plan years begin on January 1, in practice this means the effective date will be January 1, 2015
 The MHPAEA statute does not apply to FEHBP, but plan management has the discretion to apply its protections
 Effective January 1, 2014, Medicare will reimburse outpatient mental health treatment services at parity with other Part B services; Medicare will pay 80% and the beneficiary will pay 20%. Previously, Medicare beneficiaries paid higher co-pay for outpatient mental health treatment.