Ask psychologist Sallie E. Hildebrandt, PhD, about the impact the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 will have, and one patient springs to mind: a widow she’s treating for major depression.
By July last year, the woman had already used up the 20 outpatient visits her plan allowed. Thanks to the parity law, such arbitrary limits on outpatient mental health visits are now illegal in covered plans unless the same limitation applies to outpatient physical health visits.
"Here’s a person who can now get all the care she needs," says Hildebrandt, a private practitioner in La Jolla, Calif., and president of the California Psychological Association.
Starting this month, all 113 million Americans in plans covered by the law will begin enjoying such protections. The federal government’s Interim Final Rule (IFR), which gives insurers and employers detailed guidance about how to implement the law, put the law into effect for health plan years beginning on or after July 1, 2010.
For most plans, that means the law applies as of Jan. 1.
Strong consumer protections
The parity law is designed to end discrimination against mental health and addiction services, explains Peter Newbould, who directs congressional and political affairs in APA’s Practice Directorate.
The law requires group plans that provide mental health and addiction services as well as medical and surgical benefits to treat them the same: The treatment limits and financial requirements applied to mental health and substance use services can no longer be more restrictive than those applied to medical and surgical benefits.
The real winners here are the prospective patients who in the past have been discouraged by the high co-payments many plans required for mental health and substance use services, as well as patients who need more care each year than their policies allow, says private practitioner Patricia Farrell, PhD, APA’s federal advocacy coordinator in Illinois. With parity, co-payments must be the same for both mental and physical health services, and plans can’t limit the amount of mental health treatment if they don’t limit the amount of physical health care. The law will help psychologists as well, adds Hildebrandt. Psychologists will be able to plan treatment according to patients’ needs, rather than timetables imposed by insurers.
"Before I had to think, ‘We only get 20 visits a year; how am I going to parse out those visits?’" she says. "Do I need to see this person only every other week when they really need to be seen weekly, especially in the acute phase?"
The IFR eliminates another important hurdle for psychologists: Plans can no longer require that patients meet a separate mental health deductible or impose higher co-payments by classifying psychologists as specialists
The IFR also addresses what it calls "non-quantitative treatment limitations." Plans have to meet the spirit of the law beyond the financial requirements and treatment limitations. That means that, for example, the management of the benefit has to be comparable for mental health with that imposed on medical. Another aspect is that the methods for determining payment for out-of-network mental health services have to be comparable to those for out-of-network medical services. The IFR also ends the practice of what Newbould calls "phantom panels."
"You can’t set up a phony system where in Cleveland you’ve got five psychologists, a couple of social workers and a psychiatrist and say that’s a network adequate to serve the million enrollees if that ratio is way out of whack compared with what you’re doing on the medical and surgical side," he explains.
Still, despite all of its benefits, the law isn’t a panacea. It doesn’t require plans to cover mental health or substance use disorders, for example. And not all plans are covered by the law: There’s a small business exemption for health plans provided by employers with fewer than 51 people. The law doesn’t apply to Medicare patients, although a separate law called the Medicare Improvements for Patients and Providers Act will gradually phase in parity for beneficiaries by 2014. While uncommon, state and local government employee plans may opt out of the parity law.
Health plans may put up some resistance. The law allows them to "manage" benefits and use their own definitions of medical necessity to decide what to cover, although the law says that plan management must be comparable and applied no more stringently to mental health services than to physical health services.
Psychologists who encounter possible violations of the law may consider contacting the patient’s human resources office and insurer. Beyond speaking with a human resources office and the insurance company, you and your patient may contact the state insurance office and file a formal complaint with the federal government.
Despite these limitations, says Farrell, the law is a huge victory for consumers.
"Overall," she says, "the glass is more than half full."
Rebecca A. Clay is a writer in Washington, D.C.