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Strong final rule for parity means big strides for residential, out-of-state treatment

November 14, 2013
by Alison Knopf, Contributing Writer
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The final rule implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) issued on November 8 retains the strong provisions of the interim final rule (IFR) and adds some new ones, creating for the first time the possibility of a safe haven from the insurance practices that began in the late 1980s. These practices intruded on the relationship between provider and patient, restricting treatment for people with mental illnesses and all but decimating treatment for substance use disorders (SUDs).

The provisions retained in the final implementation rule include:

Non-quantitative treatment limitations (NQTLs), such as concurrent review, can be no more stringent for behavioral health care than they are for medical-surgical care in a plan. There had been concerns that these provisions, which first appeared in the IFR and caused consternation among insurance companies, would be dropped. They were not.

Scope of service: A full continuum of care, including residential treatment, is included.

The new provisions:

  • Strengthen the scope of service provision, clearly comparing treatment in a residential – non-inpatient – program to care in a nursing home or rehabilitation facility.
  • Eliminate an exception that was in the IFR that allowed insurance companies to categorically deny a treatment based on “clinically appropriate standard of care.”
  • Enable patients to pursue out-of-network treatment in another state if they are allowed to do so for medical-surgical care. For example, if a health plan lets patients from Virginia go to the Mayo Clinic for medical care, it has to let them go to Hazelden for substance abuse treatment.

The final regulation appears to have only one significant downside: its provisions do not apply to Medicaid managed care.

‘Huge step forward’

“I think this is a huge step forward, something that we have asked for for a long time,” Mark Covall, president and CEO of the National Association of Psychiatric Health Systems (NAPHS), told Addiction Professional. “This changes the paradigm and says that people will get the right care at the right time at the right level.”

“Our field 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,” said Carol McDaid, co-chair of the Parity Implementation Coalition (PIC). All of the agencies involved “fought to get a parity final rule out even while working tirelessly to get the President’s signature legislative accomplishment, the Affordable Care Act, implemented,” she told Behavioral Healthcare. “It would have been easier to just put the rule off. Even when there were differences on other issues they took reasoned and rational positions on parity when, and only when, we had evidence documenting problems - and it is much appreciated.”

“The regulations are very good news for all who work hard in the addiction treatment field and for everyone afflicted with substance abuse,” said Jerry Rhodes, chief operating officer of CRC Health Group. “The final regulations, which now provide that ‘parity applies to intermediate levels of care received in residential treatment or intensive outpatient settings,’ are far better than the interim regulations,” he said, joining McDaid in thanking HHS for listening to the field.

Medicaid managed care

Patients and providers alike benefit from the strong final rule, with one exception: the final rule does not apply to Medicaid managed care. In a highly unusual regulatory scenario, the law itself applies, but not the implementing regulations. 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 apply the MHPAEA statutory requirements 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 current Medicaid flexibilities to amend their Medicaid state plans or demonstrations/waiver projects to address financial limitations, quantitative treatment limitations, non-quantitative treatment limitations, and disclosure requirements in ways that promote parity,” he said, adding that “CMS will offer technical assistance to states regarding strategies to implement MHPAEA.”

The preamble to the final 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, many states are now switching their behavioral health benefits from fee-for-service to a privatized managed care company for the first time ever.

“We are disappointed 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 figure is 50 to 60 percent. Most SUD providers who are members do not participate in Medicaid because of the IMD exclusion, he said.

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