News & Updates
On February 2, 2010, the federal government issued regulations that interpret the changes to the federal Mental Health Parity Act, which requires "parity" between the financial requirements and treatment limitations applied to medical or surgical benefits, and mental health and substance-use disorder benefits. This law impacts group health plans, both fully insured and self-funded, with more than 50 total employees.
These rules were to be issued by October 1, 2009, but the federal government did not make this deadline. Since the rules were not issued on time, Anthem Blue Cross worked with an external law firm and other industry resources to apply reasonable interpretations to the law. Despite Anthem's good-faith efforts, the new rules differ from the interpretation they and many other insurers applied to the law.
Although they are still reviewing the law and will provide periodic updates in the future, the following will provide you with some answers to questions your clients may be asking.
When do the new regulations apply?
The new regulations apply to group plan years beginning on or after July 1, 2010. As you may remember from Anthem's implementation of the statute, Anthem does not track a group's plan year. Accordingly, Anthem will use the group's renewal date as the effective date for a group unless instructed otherwise.
What do the new regulations require?
Among other things, the Mental Health Parity Act specifically requires the following to be in parity: deductibles, copayments, coinsurance, out-of-pocket expenses, and limits on frequency of treatment, number of visits and number of days of coverage.
Will Anthem need to make changes to their health plan benefits to comply with this rule?
It depends on the plan design. Anthem expects their HSA/HRA plans to comply with the rules. This is because the only benefits that aren't subject to coinsurance and deductible are the preventive care benefits. Those benefits are not significant enough to require changes to how they pay for mental health and substance abuse benefits. This will be true for other deductible/coinsurance plans as well (those that do not have copays except for prescription drugs).
Why will plans that use a mix of copays and coinsurance/deductibles require a closer review?
The rules essentially require a three-part test. First, Anthem has to split all of their medical benefits into the following six categories: inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency room and prescription drug.
Then, after the medical benefits have been categorized, Anthem must determine the percentage of benefits within each category that apply the cost-share feature they are looking at.
Finally, to determine the amount of the cost-share feature that can apply to mental health and substance abuse benefits (for example, should the $10 or $20 copay amount apply), Anthem must determine which cost-share or combination of cost-share amounts apply to more than half of the benefits within the category.
Considering the variety of plan designs offered by Anthem, this review will take some time. Anthem is working with their actuarial department to develop a tool to be used by Underwriting and others to evaluate plans that differ from their standard products.
How do the rules impact groups that use third parties to administer mental health and substance abuse benefits?
Many in the industry expected that the federal government would allow one deductible for medical benefits and another for mental health and substance abuse benefits. Although the rules indicated that this was a reasonable interpretation of the statute, it was decided that this should not be continued going forward. Instead, the same deductible must apply to both medical benefits and mental health and substance abuse benefits.
Considering the administrative complexity of integrating deductibles, Anthem is determining the processes and any additional costs that will be applied if carve-out benefits are allowed.
How do the rules impact utilization management?
The rules generally provide that utilization review criteria cannot be more stringent for mental health and substance abuse than for medical benefits. However, the rules do recognize that there may be clinically appropriate reasons for some differences to exist. Group health plans cannot use EAP programs as a first level of care before medical benefits can be used. Anthem is looking at their utilization management processes to ensure they continue to comply with the rules.
As you can see, these rules are very complicated. Anthem recognizes that groups are asking questions now, but Anthem wants to give the right answer; not just the fastest answer. Anthem is working to ensure that their interpretation of the rules is as accurate as possible. They are also preparing comments to the rules to ensure that the federal government is aware of the issues raised by its interpretation of the rules and to respond to the questions the government asked (for example, should plans be required to allow benefits for residential treatment centers).
Watch for future updates as Anthem works through these issues.