Many Insurers Still Trying to Skirt Mental Health Parity Law

Deborah Brauser

August 10, 2011

August 10, 2011 — Maintaining health insurance coverage can be extremely difficult for US patients with early psychosis, new research suggests. Although a cohort study of 48 mentally ill patients shows fewer than one-third had continued coverage during 12 months, investigators say the findings are indicative of a systemic problem in which many insurance companies are trying to skirt a law designed to end discrimination against mentally ill patients.

The most surprising finding was the number of participants who lost public insurance coverage. The public system itself will likely incur long-term financial costs when early treatment is disrupted.

"The most surprising finding was the number of participants who lost public insurance coverage. The public system itself will likely incur long-term financial costs when early treatment is disrupted," lead study author Tyler J. Dodds, MD, from the Harvard-Longwood Psychiatry Residency Training Program in Cambridge, Massachusetts, told Medscape Medical News.

Dr. Tyler J. Dodds

Dr. Dodds, who was affiliated with the Department of Psychiatry at Yale School of Medicine in New Haven, Connecticut, during the study, said this means clinicians should look for ways to minimize treatment disruptions — including possible partnerships between institutions in the public and private sectors.

"Will expanded federal eligibility for Medicaid in 2014 remedy these worrisome coverage gaps?" asks Marvin S. Swartz, MD, Duke University Medical Center in Durham, North Carolina, in an accompanying editorial.

"Possibly for those within 133% of the federal poverty level but under healthcare reform, newly eligible consumers are guaranteed mental health coverage equivalent to only basic health plans, not the array of optional Medicaid services that have massively raised the bar for recovery-oriented community-based care," writes Dr. Swartz.

Dr. Henry Harbin

Commenting for Medscape Medical News, Henry Harbin, MD, psychiatrist and healthcare consultant in Baltimore, Maryland. and member of the American Psychiatric Association (APA) Workgroup on Health Reform and Parity and of the Parity Implementation Coalition, said that under the Mental Health Parity and Addiction Equity Act, passed into law last year, many of the private insurers who don't usually cover the intensive programs needed for serious mental illnesses will be required to do so.

"One of the things that both the provider and the consumer can do is pursue the challenge with the insurer as to why they are not reimbursing for some of these programs that are often provided and paid for by Medicaid in the public sector on a routine basis," said Dr. Harbin, who is also former chief executive officer of Magellan Health Services.

Unfortunately, he noted that guidance from parity regulators has so far not been specific or clear enough, allowing some insurers to hide behind a level of vagueness.

"Without enforcement of the parity law, and if there's not an effective definition of what parity protections there are, it's possible that even under Medicaid insurers are free to delete some of these essential treatment services," explained Dr. Harbin.

The study is published in the August issue of Psychiatric Services.

Interrupted Coverage

The investigators evaluated data on the 82 participants in the Specialized Treatment Early in Psychosis (STEP) program at the Connecticut Mental Health Center. Insurance status (through self-reports and/or medical record and database reviews) was assessed at 3 periods: baseline, 6 months, and 12 months.

Because 34 of the subjects either did not know their health insurance status or missed follow-up assessments, this analysis concentrated on the 48 remaining STEP participants (90% male; mean age, 22.2 years; 46% black, 38% white, 16% Hispanic).

Of these, 15 had a diagnosis of schizophrenia, 11 had a schizophreniform disorder, 9 had a schizoaffective disorder, 6 had a psychotic disorder not otherwise specified, 6 had bipolar disorder, and 1 had delusional disorder.

Results showed that 18 subjects had private, 13 had public, and 16 had no insurance at baseline. However, 72% of the privately insured and 38% of the publicly insured lost coverage by the 12-month timepoint. In addition, only 14 of the 48 maintained continuous coverage.

"Although 67% of the participants for whom longitudinal data were available had insurance at baseline, just 29% at most enjoyed uninterrupted insurance coverage during the first year of follow-up," write the investigators.

They add that this number may actually be even lower as coverage gaps could have been missed in between assessment periods.

"I think the message for healthcare providers is to pay attention and try to provide some support to the families of patients who have access to either the private or public insurance system, to be a kind of advocate for them," commented Dr. Harbin.

As the State of Connecticut has begun to implement some changes in its public insurance system and we anticipate further changes as part of the Affordable Care Act, it will be important to see if this vulnerable population of early psychosis patients experiences improvements in insurance coverage.

Dr. Dodds said that the researchers are planning to continue following the insurance coverage of these participants.

"It will be important to see how much of an effect healthcare reform has. Hopefully investigators in other states will also study insurance continuity because each state has its own unique financial and regulatory environment."

"As the State of Connecticut has begun to implement some changes in its public insurance system and we anticipate further changes as part of the Affordable Care Act, it will be important to see if this vulnerable population of early psychosis patients experiences improvements in insurance coverage," added the study's principal investigator and director of STEP, Vinod Srihari, MD.

Looking for Loopholes?

Dr. Harbin noted that the APA, along with other national groups, are currently "very active" in trying to monitor the implementation and enforcement of parity.

"The APA has even set up a special task force to try and track this issue on behalf of their members and they work closely with the Parity Implementation Coalition."

He explained that a big concern is that the federal agencies responsible for the regulation of the parity law are still finalizing several issues, including a clear definition of "scope of services" parity.

"Another important area is how to help patients and providers who are struggling with trying to figure out what their coverage is and if the insurers are compliant. It's a short bill, but it's a complicated one to understand."

The APA has a section on its Web site devoted to the Parity Act, including educational resources and sample letters from the appeals process.

"Because there is still confusion at the federal level about what areas will be enforced or not, additional support people are needed to say 'this issue in your health plan is clearly out of compliance' but another issue might not be, depending on how the regulators call it. It's all very complicated."

Dr. Harbin said that some companies may be taking advantage of the current confusion by trying to circumvent the legislation.

I think some of the insurers are trying to be responsible to the law as they understand it. They spend a lot of time communicating with providers and meeting with consumer groups. But there are some others that seem to be minimally compliant and fairly inattentive, and are pretty grossly violating the law.

"I think some of the insurers are trying to be responsible to the law as they understand it. They spend a lot of time communicating with providers and meeting with consumer groups. But there are some others that seem to be minimally compliant and fairly inattentive and are pretty grossly violating the law."

One example he shared is when providers and patients write letters to their insurers asking about a lack of coverage.

"They have a right to get a copy of the medical assessing criteria, both for how the behavioral subsidy benefit is being limited but also for how the benefit on the medical side is being limited. So in order to know if there's a compliance problem, and if they have a right to appeal, the law requires disclosure. And the majority of even the large companies are not disclosing medical criteria. They're saying, 'We don't read the law as saying that we have to disclose this,'" explained Dr. Harbin.

"Still, other insurers are stepping up and saying, 'We understand there's some vagueness but we're going to comply and provide this information because you really can't make a decision without it.' That gives an idea of the different levels of responsiveness we're finding right now."

He noted that the parity law and its regulation "really form the core benefit" for the Affordable Care Act, which means that clear definitions are critical.

<"There's currently a big debate going on about how clear the statute is. All the advocacy groups believe the law is very clear, but in the regulations, it states that they aren't yet addressing this 'scope of services' issue. So if it isn't clearly defined that there is the same level and range of services covered for mental health disorders as you have for medical disorders, you can see that that is a pretty big loophole.

"Everybody knows what the intent of the law was. And many of the insurers are offering a full range of services. But others can legitimately say, 'You state in your interim regulations that you haven't addressed this yet. So we're free to offer and delete this stuff as we want to.' And they're right. If you don't clearly have this protection, you don't have much at all," concluded Dr. Harbin.

The study was funded by the Connecticut State Department of Mental Health and Addiction Services and by grants from the Danaghne Foundation and the National Institute of Mental Health. The study authors and Dr. Harbin have disclosed no relevant financial relationships.

Psychiatr Serv. 2011;62:878-881. Abstract

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