Mental Health Parity

Mental Health Parity

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Federal and State laws require many insurance carriers to treat behavioral health or substance use disorder (BH/SUD) benefits at “parity” with medical/surgical benefits.  This article will describe which Federal and State parity laws apply to what types of plans and how those laws work.  The end of the article also provides helpful links.

Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA)

This Federal law applies to:

  • employer-sponsored plans (both fully-insured and self-insured);
  • individual market plans, like those sold through HealthSource RI; and
  • Medicaid managed care plans.

This law does NOT apply to:

  • Medicare or Medicare Advantage plans;
  • TRICARE;
  • Retiree-only plans;
  • Federal Employee Health Benefits (FEHB)  plans (thought they do follow parity rules voluntarily);
  • Some state and local government employer plans who have opted out;
    • The plan for State of RI employees has not opted out, so Federal parity laws do apply

MHPAEA does not actually require plans to offer BH/SUD benefits.  Instead, it says that those plans that elect to offer BH/SUD benefits must do so “at parity” with medical/surgical benefits.  That means that financial requirements (e.g. copays, coinsurance, deductibles) and treatment limits (e.g. visit caps) can be no more restrictive for BH/SUD benefits than they are for medial/surgical benefits.  It also means that a plan’s “nonquantitative treatment limitations” (NQTLs) can be no more restrictive for BH/SUD benefits than they are for medical / surgical benefits.  NQTLs are the policies and practices that impact access to care, such as medical necessity review criteria, drug formulary design, fail-first policies, and standards for the creation of a provider network.

Financial Requirements and Treatment Limitations

MHPAEA provides that no financial requirement or treatment limitation for BH/SUD benefits can be more restrictive than the predominant financial requirement or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification.

The implementing regulations provide details about the six classifications of services (inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs) and precise definitions for “predominant” (more than half) and “substantially all” (more than 2/3rds).

This rule means, for example, that a health plan cannot have per-day copays for inpatient in-network BH/SUD services unless it also has copays for inpatient in-network medical / surgical services.  It also means that, if the plan has copays for both of these types of services, that the copay for BH/SUD inpatient in-network services can be no higher the predominant level of copays applied to medical / surgical inpatient in-network services.

For more details and examples on how these rules work, please see:

MHPAEA also prohibits a plan from having separate cumulative financial requirements (e.g. deductibles, visit limits) for medical / surgical and BH/SUD benefits.

Non-Quantitative Treatment Limitations (NQTLs)

MHPAEA prohibits plans from imposing NQTLs to a classification of BH/SUD benefits that are more restrictive than it imposes on medical / surgical benefits in that classification.  That includes policies (both as written and applied), processes, strategies, evidentiary standards, and other factors.  NQTLs are “behind-the-scenes” limits that affect access, like:

  • medical necessity review methods and criteria
  • drug formulary design
  • fail-first polices
  • standards for provider network admission, including reimbursement rates

For example, it would likely be a parity violation for a plan to review in-network inpatient hospital stays on a weekly basis for all medical / surgical stays, but review on a daily basis for all BH/SUD stays.

This helpful document from the Federal Departments of Justice (DOJ) and Health and Human Services (HHS) lays out warning signs that a plan may be violating parity laws with respect to NQTLs.  The strategies listed in this document are not necessarily illegal to apply to BH/SUD benefits, but they may violate parity laws if they are applied differently to BH/SUD benefits than to medical / surgical benefits.

RI State Mental Health Parity Law

The RI State Mental Health Parity Law applies to all fully-insured commercial health plans in the individual and group markets.  It does NOT apply to self-insured plans, Medicare, or Medicare Advantage plans.

The State law is very similar to the Federal law in requiring “parity” of benefits for BH/SUD and medical / surgical.  In addition, the State law also:

  • requires plans to cover BH/SUD benefits, including medication assisted therapy (MAT);
  • prohibits annual or lifetime dollar limits for BH/SUD benefits;
  • when reviewing SUD medical necessity, requires plans to rely on criteria developed by the American Society for Addiction Medicine (ASAM); and
  • for SUD patients, requires plans to cover non-opioid pain treatments, including chiropractic services.

The State law can be found at in the RI General Laws at Title 27, Chapter 38.2.

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