Robust Final Rule for Parity Signifies Significant Advances for Residential,
by Alison Knopf; behavioral.net; November 14, 2013
Behavioral health advocates find lots to love, while insurance providers carefully seek more clarification
The final guideline implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) issued on November 8 maintains the strong provisions of the interim final rule (IFR) and adds a number of new ones, creating for the first time the possibility of a safe haven from the insurance methods that commenced in the late 1980s. These procedures intruded on the relationship between service provider and patient, restricting treatment for individuals with mental illnesses and all but decimating treatment for substance use disorders (SUDs).
The provisions maintained in the finalized implementation rule consist of:
Non-quantitative treatment limitations (NQTLs), such as concurrent evaluation, can be no more exacting for behavioral health care than they are for medical-surgical care in a plan. There had been worries that these provisions, which first made an appearance in the IFR and induced consternation among insurance providers, would be dropped. They were not.
Scope of service: A full continuum of care, which includes residential treatment, is included.
The new provisions:
Reinforce the scope of service provision, clearly contrasting treatment in a residential – non-inpatient – program to care in a nursing home or rehabilitation facility.
Eliminate an exemption that was in the IFR that authorized insurance providers to categorically refuse a treatment based on “medically appropriate standard of care.”
Enable patients to pursue out-of-network therapy in another state if they are permitted to do so for medical-surgical treatment. For example, if a health plan permits patients from Virginia go to the Mayo Clinic for health care, it has to let them go to Hazelden for substance abuse treatment.
The final regulation seems to possess only a single substantial problem: its provisions do not apply to Medicaid managed care.
‘Enormous step forward’
“I think this is a huge step forward, something that we have requested for a long time,” Mark Covall, president and CEO of the National Association of Psychiatric Health Systems (NAPHS), told Behavioral Healthcare. “This changes the paradigm and says that people will get the right treatment at the proper time at the right level.”
“Our discipline owes a debt of gratitude to all of the federal regulators from the Department of Health and Human Services, the Department of Labor, and Treasury, along with the Substance Abuse and Mental Health Services Administration and the Office of National Drug Control Policy,” stated Carol McDaid, co-chair of the Parity Implementation Coalition (PIC). All of the agencies included “fought to get a parity final rule out even while working tirelessly to get the President’s signature legislative accomplishment, the Affordable Care Act, put in place, ” she told Behavioral Healthcare. “It would have been easier to just put the rule off. Even when there were distinctions on various other concerns they took reasoned and rational postures on parity when, and only when, we had evidence documenting challenges - and it is much appreciated ”
“The polices are very good news for all who work hard in the dependancy treatment field and for all people stricken with substance abuse,” explained Jerry Rhodes, chief operating officer of CRC Health Group. “The finalized regulations, which now provide that ‘parity applies to intermediate quantities of care received in residential treatment or intensive outpatient settings, are far better than the interim rules,” he said, joining McDaid in thanking HHS for listening to the field.
Rule excludes Medicaid managed care
Patients and vendors alike profit from the robust final rule, with one exception: the final rule does not apply to Medicaid managed care. In a highly unusual regulatory scenario, the regulation itself is applicable, but not the implementing polices. This was hinted at in a January, 2013 letter from the Center for Medicare and Medicaid Services (CMS) to state Medicaid directors.
“CMS expects that states will implement the MHPAEA statutory prerequisites to these authorities and MCOs,” Mark Weber, a spokesman for the Department of Health and Human Services, told BH on November 13. “States can use existing Medicaid flexibilities to modify their Medicaid state programs or demonstrations/waiver projects to address financial restrictions, quantitative treatment limitations, non-quantitative treatment limitations, and disclosure requirements in ways that promote parity,” he stated, adding that “CMS will offer technical support to states regarding methods to implement MHPAEA.”
The preamble to the finalized rule basically says the same thing – that the law applies to Medicaid managed care – but the final rule doesn’t. While most states have had managed care for Medicaid medical-surgical benefits for many years, a lot of states are now changing their behavioral health benefits from fee-for-service to a privatized managed care organization for the very first time ever.
“We are unhappy that the final rule did not apply to Medicaid managed care,” said Covall. “But obviously we will be working in talking with CMS about further clarifications.” For inpatient psychiatric hospital members of the NAPHS, 20 to 25 percent of their reimbursement comes from Medicaid, said Covall. For residential treatment for children and adolescent for mental illness, that number is 50 to 60 percent. Most SUD providers who are affiliates do not participate in Medicaid because of the IMD exclusion, he explained.
Pamela Greenberg, president and CEO of the Association for Behavioral Health and Wellness (ABHW), wasn’t surprised about the language regarding Medicaid managed care. “When the IFR became available, that didn’t apply to Medicaid managed care either,” she told BH. “We always knew that the regulation applied, but the IFR didn’t. CMS has released direction about the application of MHPAEA to Medicaid managed care and supplemental advice dealing with other segments of the rule is expected ”
“I don’t think we’ve seen the last of this,” stated McDaid concerning the determination that the final rule does not apply to Medicaid managed care. “They said there would likely be further guidance on Medicaid,” said McDaid. The PIC, co-chaired by McDaid and Sam Muszynski of the American Psychiatric Association, has asked that this guidance be supplied within 6 months.
‘Intermediate’ services included
There has been great worry with regards to how “intermediate services” – residential, partial hospitalization, and intensive outpatient – fit into the six classifications of treatment set out in the IFR. Finding analogues for these in the medical-surgical system didn’t seem to be simple, and the treatment arena went through some dark times wondering whether patients would have to pay out-of pocket for their nighttime stays, or go to hotels. The final rule plainly puts these intermediate services on a par with nursing homes. From the final rule:
“For example, if a plan or issuer classifies care in skilled nursing facilities or rehabilitation hospitals as inpatient benefits, then the program or issuer must likewise treat any covered care in residential treatment facilities for psychological health or substance use issues as an inpatient benefit. In addition, if a plan or issuer treats home health care as an outpatient benefit, then any included intensive outpatient mental health or substance use disorder services and partial hospitalization must be considered outpatient benefits as well.”
This terminology makes it clear that if a patient’s medical plan pays for treatment in a skilled nursing facility or rehab facility (for instance, following a stroke), the coverage would have to be employed and paid for in the exact same way for residential services for psychological illness or SUDs.
Because the PIC is still discovering health plans that have exclusions for residential treatment, McDaid said the final rule’s language – which disallows this exclusion if the program covers intermediate levels for medical/surgical – is a “vast improvement.”
There are still details to be worked out in terms of how the scope of service rules will be “operationalized,” said Covall. “The guideline doesn’t define what criteria the plans will have to use to determine comparability for these levels of care,” he reported. For instance, the final rule claims an individual having a stroke and visiting a rehabilitation facility is comparable to someone needing residential treatment for mental health problems or addiction, he observed. But no one expects insurance firms to simply accept this without scrutiny. “There’s comparability in that type of service, but the concern is, what kind of residential treatment is likely to be covered, and to what level is it going to be covered. ”
Insurance organizations, without a doubt, are concerned with regards to the intermediate services provision. ABHW’s Greenberg is also requesting clarification on the residential question. “This is a new provision in the rule and we might need some details from the government bodies about how they intended for this provision to be implemented by plans,” she said.
Out of state, out of network benefits
The final rule additionally states that if patients are allowed to go out-of-state for medical or surgical treatment, they should also be allowed to go out-of-state for behavioral health treatment.
The provisions concerning area of services are another area of the final rule that insurance companies want to understand better. The final rule is the first time it has come up. In several cases, addiction treatment providers are located out of state – for instance, many patients travel to programs in Minnesota, Florida, or California, for example.
Preemption of state laws
ABHW also remains concerned about many states’ comprehension of the preemption provisions in the regulation and the final rule. “We see some states establishing maximums, primarily in terms of amount of hours or dollar caps, on autism therapy,” she explained. “That places us in a bind – it’s a conflict with the parity law,” she said.
Clearly, if a state Medicaid department will just pay the insurance company for a capped sum, yet the insurance company must under parity pay for more, that’s certainly not a sustainable business model.
No more secret ‘standards of care’
A significant win for patients and providers is the elimination of the “clinically appropriate standard of care” exclusion from the final rule. This was a change from the IFR, which contained an exemption to the NQTL requirements allowing insurance providers to vary from parity among behavioral and medical/surgical benefits “to the level that acknowledged clinically correct standards of care may enable a difference.”.
“We were disappointed” about the removing of the exception, said Greenberg. “We understood they would at least put some parameters around it but we didn’t anticipate the clause to be taken out,” she said. On the flip side, the removal was somewhat ambiguous, because it appeared to invert itself in another section of the final rule. “We could use a lot more clarification regarding what was intended there,” she said.
But the clinical appropriateness exception could have made it feasible for insurance companies to get around the entire rule. By eliminating it, insurance companies can’t unilaterally declare that there’s a particular medically recognized standard of care, and to deny care accordingly, said McDaid. “We had been working on this, coming across denials that simply declared there was a clinically accepted standard, but not saying what it is,” she said.
The final rule takes effect with plan years starting in July of 2014, which will mean that for most people, the new rule will be utilized in plans effective January 2015.