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Paul Wellstone, Pete Domenici Parity Act Prohibits Discrimination
Friday, January 29, 2010
The Departments of Health and Human Services, Labor and the
Treasury today jointly issued new rules providing parity for
consumers enrolled in group health plans who need
treatment for mental health or substance use disorders.
“The rules we are issuing today will, for the first
time, help assure that those diagnosed with these debilitating
and sometimes life-threatening disorders will not suffer needless
or arbitrary limits on their care,” said Secretary Sebelius.
“I applaud the long-standing and bipartisan effort that
made these important new protections possible.”
“Today’s rules will bring needed relief to families
faced with meeting the cost of obtaining mental health
and substance abuse services,” said U.S. Secretary
of Labor Hilda L. Solis. “The benefits will give these
Americans access to greatly needed medical treatment, which
will better allow them to participate fully in society. That’s
not just sound policy, it’s the right thing to do.”
“Workers covered by group health plans who need mental
health and substance abuse care deserve fair treatment,”
said Deputy Treasury Secretary Neal Wolin. “These rules
expand on existing protections to ensure that people don't
face unnecessary barriers to the treatment they need.”
The new rules prohibit group health insurance plans—typically
offered by employers—from restricting access to care
by limiting benefits and requiring higher patient costs than
those that apply to general medical or surgical benefits.
The rules implement the Paul Wellstone and Pete Domenici Mental
Health Parity and Addiction Equity Act of 2008 (MHPAEA).
MHPAEA greatly expands on an earlier law, the Mental Health
Parity Act of 1996 which required parity only in aggregate
lifetime and annual dollar limits between the categories of
benefits and did not extend to substance use disorder benefits.
The new law requires that any group health plan that
includes mental health and substance use disorder benefits
along with standard medical and surgical coverage must treat
them equally in terms of out-of-pocket costs, benefit limits
and practices such as prior authorization and utilization
review. These practices must be based on the same level of
scientific evidence used by the insurer for medical and surgical
benefits. For example, a plan may not apply separate deductibles
for treatment related to mental health or substance
use disorders and medical or surgical benefits—they
must be calculated as one limit. MHPAEA applies to employers
with 50 or more workers whose group health plan chooses to
offer mental health or substance use disorder benefits.
The new rules are effective for plan years beginning on or
after July 1, 2010.
The Wellstone-Domenici Act is named for two dominant figures
in the quest for equal treatment of benefits. The late Senator
Paul Wellstone (D-MN), who was a vocal advocate for parity
throughout his Senate career, sponsored the ultimately successful
full parity act. He was joined by former Senator Pete Domenici
(R-NM) who first introduced legislation to require parity
in 1992. Champions of the legislation also included the bipartisan
team of Representative Patrick Kennedy (D-RI) and former Representative
Jim Ramstad (R-MN).
The issue of parity dates back over 40 years to President
John F. Kennedy, and was also supported by President Clinton
and the late Senator Edward Kennedy.
The interim final rules released today were developed based
on the departments' review of more than 400 public comments
on how the parity rule should be written. Comments on the
interim final rules are still being solicited. Sections where
further comments are being specifically sought include so-called
“non quantitative” treatment limits such as those
that pertain to the scope and duration of covered benefits,
how covered drugs are determined (formularies), and the coverage
of step-therapies. Comments are also being specifically requested
on the regulation’s section on “scope of benefits”
or continuum of care.
Information above are courtesy of the US Department
of Health and Human Services:
http://www.hhs.gov/
Note: All HHS press releases, fact sheets and
other press materials are available at http://www.hhs.gov/news.
Last revised: October 04, 2010
More details on the Mental Health Parity and Addiction Equity
Act found below:
MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT
Introduction: The Mental Health Parity and
Addiction Equity Act of 2008 (MHPAEA) is a federal law that
provides participants who already have benefits under
mental health and substance use disorder (MH/SUD) coverage
parity with benefits limitations under their medical/surgical
coverage. MHPAEA may apply to two different types of coverage:
1) Large group self-funded group health plans
(CMS has jurisdiction over self-funded public sector (non-federal
governmental) plans, while the Department of Labor (866-444-3272)
has jurisdiction over private sector self-funded group health
plans.);
2) Large group fully insured group health plans.
MHPAEA and
Health Coverage: Contact your state's insurance department
to find out about whether additional protections apply to
your coverage if you are in a fully insured group health plan
or have individual market (non-employment based) health coverage.
Medicare and Medicaid are not issuers of health insurance.
They are public health plans through which individuals obtain
health coverage. Medicaid Managed Care plans, however, are
subject to the MHPAEA statute. Contact your specific Medicare
or Medicaid contractor to discuss your level of benefits.
Employment-related group health plans that provide benefits
through insurance are known as fully insured group health
plans. Employment-related group health plans that pay for
coverage directly, without purchasing health insurance from
an issuer, are called self-funded group health plans. Contact
your plan administrator to find out if your group coverage
is fully insured or self-funded.
MHPAEA may prevent your large group health plan from imposing
financial requirements and treatment limitations on MH/SUD
benefits that are more restrictive than financial requirements
and treatment limitations on medical/surgical benefits. MHPAEA
also may prevent your large group health plan from placing
annual or lifetime dollar limits on MH/SUD benefits that are
lower - less favorable - than annual or lifetime dollar limits
for medical/surgical benefits offered under the plan.
MHPAEA does NOT apply to small group health plans or health
insurance coverage in the individual (non-employment based)
market, but you should check to see if your state law requires
mental health parity in such other cases. (Visit www.ncsl.org,
on the right hand side of the page enter "mental health
parity" then select "State Laws Mandating or Regulating
Mental Health Benefits" in order to view State specific
information.) MHPAEA applies to most group health plans with
more than 50 workers.
Summary of MHPAEA Protections: The Mental
Health Parity Act of 1996 (MHPA) states that a group health
plan may not impose annual or lifetime dollar limits on mental
health benefits that are less favorable than any such limits
imposed on medical surgical benefits.
MHPAEA preserves the MHPA protections, and adds significant
new protections. Although the law requires "parity",
or equivalence, with regard to annual and lifetime dollar
limits, financial requirements and treatment limitations,
MHPAEA does NOT require large group health plans and their
health insurance issuers to include MH/SUD benefits in their
benefits package. The law's requirements apply only to large
group health plans and their health insurance issuers that
already include MH/SUD benefits in their benefit packages.
Key changes made by MHPAEA, which is generally effective
for plan years beginning after October 3, 2009, include the
following:
• If a group health plan includes medical/surgical
benefits and mental health benefits, the financial requirements
(e.g., deductibles and co-payments) and treatment limitations
(e.g., number of visits or days of coverage) that apply to
mental health benefits must be no more restrictive than the
predominant financial requirements or treatment limitations
that apply to substantially all medical/surgical benefits;
• If a group health plan includes medical/surgical
benefits and substance use disorder benefits, the financial
requirements and treatment limitations that apply to substance
use disorder benefits must be no more restrictive than the
predominant financial requirements or treatment limitations
that apply to substantially all medical/surgical benefits;
• MH/SUD benefits may not be subject to any separate
cost sharing requirements or treatment limitations that only
apply to such benefits;
• If a group health plan includes medical/surgical
benefits and mental health benefits, and the plan provides
for out of network medical/surgical benefits, it must provide
for out of network mental health benefits;
• If a group health plan includes medical/surgical
benefits and substance use disorder benefits,
and the plan provides for out of network medical/surgical
benefits, it must provide for out of network substance use
disorder benefits;
• Standards for medical necessity determinations and
reasons for any denial of benefits relating to MH/SUD must
be disclosed upon request;
• The MHPA parity requirements under existing law (regarding
annual and lifetime dollar limits) continue and are extended
to substance use disorder benefits.
Exceptions: There are three exceptions to
the MHPAEA requirements:
• MHPAEA requirements do not apply to small employers
who have between 2 and 50 employees;
• Large group health plan sponsors that meet the requirements
stated in the MHPAEA download below (Section 512(a)(2) Cost
Exemption) and demonstrate that compliance with MHPAEA increases
their claims by at least two percent in the first year (one
percent in subsequent years) may request exemption from the
MHPAEA based on their cost exemption. Subsequently, the plan
sponsors may notify the plan beneficiaries that MHPAEA does
not apply to their coverage; and
• A nonfederal governmental employer that provides
self-funded group health plan coverage to its employees (coverage
that is not provided through an insurer) may elect to exempt
its plan (opt-out) from the requirements of MHPAEA by following
the Procedures & Requirements posted on the Self-Funded
Nonfederal Governmental Plans webpage (see Related Links Inside
CMS), then issuing a notice of opt-out to enrollees at the
time of enrollment and on an annual basis. Thereafter, the
employer must also file the opt-out notification with CMS.
A regulation implementing MHPAEA was published in the Federal
Register on February 2, 2010. The regulation, which is an
interim final rule, is effective April 5, 2010 and applies
to plan years beginning on or after July 1, 2010. There is
a comment period which closes on May 3, 2010. A link to the
full text of the regulation is below.
The regulation applies to group health plans of employers
with more than 50 employees. It does not apply to group health
plans of smaller employers nor does it apply to individual
health insurance plans. It, like the statute, does not require
group health plans to provide mental health or substance use
disorder benefits. But if they do, the financial requirements
and treatment limitations that apply to MH/SUD benefits cannot
be more restrictive than the predominant restrictions and
requirements that apply to substantially all the medical/surgical
benefits.
The provisions of the regulation include the following:
1. The parity requirements must be applied
separately to six classifications of benefits: inpatient in-network;
outpatient in-network; inpatient out-of-network; outpatient
out-of-network; emergency; and prescription drug. In other
words, the substantially all/predominant test must be applied
separately to restrictions and requirements in each classification.
The regulation includes examples that explain how the substantially
all/predominant test is applied in each classification. Additionally,
although the regulation does not require plans to cover MH/SUD
benefits, if they do, they must provide MH/SUD benefits in
all classifications in which medical/surgical benefits are
provided.
2. The regulation requires that all cumulative
financial requirements, including deductibles and out-of-pocket
limits, must integrate both medical/surgical and MH/SUD benefits.
3. The regulation distinguishes between
quantitative treatment limitations and non-quantitative treatment
limitations. Quantitative treatment limitations are numerical
such as visit limits and day limits. Nonquantitative treatment
limitations include medical management, step therapy and pre-authorization.
There is an illustrative list of nonquantitative treatment
limitations in the regulation. A group health plan cannot
impose a nonquantitative treatment limitation with respect
to MH/SUD benefits in any classification unless, under the
terms of the plan as written or in operation, any processes,
strategies, evidentiary standard, or other factors used in
applying the nonquantitative treatment limitations to MH/SUD
benefits to MH/SUD in a classification are comparable to and
applied no more stringently than what is applied to medical/surgical
benefits except to the extent that recognized clinically appropriate
standards of care may permit a difference.
Information above are courtesy of the US Department
of Health and Human Services:
http://www.hhs.gov/
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