Q: How is the newly passed national Mental Health Parity Bill likely to affect my practice?
A: While most of the country was focused on the current financial crisis, without much fanfare, landmark mental health legislation was being slipped into the bailout bill. Key members of congress, mental health advocates, and practitioner groups have tried for years to pass a mental health parity law, to no avail; but, this time, the mentally ill and their advocates won. The new federal law mandates that mental health coverage must be “on par” with physical health coverage. In other words, copayments, deductibles, visit limits, and annual or lifetime limits will be the same for physical and mental health issues.
California, Colorado, and Connecticut already have full-parity laws, so clients and practitioners won’t see much change there. Some states, including Alaska, Arizona, Iowa, Kansas, Louisiana, and Michigan, have what are called minimum-mandated laws, which mandate a minimum level of mental health coverage; however, this level isn’t required to be equal to that of other medical conditions. Other states, including Alabama, Florida, Georgia, Nebraska, and Utah, have what are called mandated offerings, which require a plan to offer the option of mental health coverage that’s equal to coverage for other medical conditions, though buyers have the option of accepting or rejecting it. Only two states, Idaho and Wyoming, don’t have any parity or mandate laws. So states with minimum-mandated laws, mandated-offering laws, or no laws at all, will benefit by increasing the number of people who have full-parity mental health coverage. For practitioners, this means that there’s potentially a larger pool of clients with full mental health coverage.
The federal law offers many advantages to both clients and therapists, but it has some possible drawbacks. For example, businesses with fewer than 51 employees have the right to opt out of behavioral health coverage altogether if they believe it’ll be too expensive. An unintended consequence may be that people who work for small businesses may actually lose mental health coverage. And there’s reason to think that many of these smaller companies will opt out because “on par” mental health insurance may be substantially more expensive than the “subpar” brand they offer now. So your client, whose old health plan provided a certain number of sessions per year, may find herself with none, if the small business she works for opts out of coverage altogether.
The new law will particularly benefit clients with severe, chronic, and serious mental health conditions, such as bipolar disorder or post-traumatic stress disorder. Under the current system, these clients often run through their benefits just when they’re deteriorating most rapidly. Let’s say your client with unstable bipolar disorder has an insurance plan with 12 mental health outpatient sessions per year. She can barely afford her copayments, much less pay out of pocket for the treatment she needs. She’s been hospitalized three times in the past two years. Now, she has only two sessions left of her benefits and is clearly getting worse.
Under the new law, she’ll have access to as many outpatient sessions as she needs to keep her stable and out of the hospital. In fact, since inpatient costs for this kind of client account for such a large portion of health plan payments, your skill at crisis management, hospital-prevention work, and maintenance therapy with chronic, high-utilization diagnoses will be very attractive to health plans trying to contain hospitalization costs. Practitioners who can work closely with health insurance utilization managers will find themselves in a good position to get a steady stream of referrals, and a much easier time getting approval for additional sessions.
Though mental health parity means that clients will have access to an unlimited number of sessions, it doesn’t mean that every client will get as many sessions as a therapist requests. Consider a 38-year-old client diagnosed with an adjustment disorder, unspecified. He’s been seen the maximum number of times that his benefits allow each year for the last three years. Under the new law, utilization reviewers will be taking a close look to insure that the length of treatment matches the severity of illness. It’s likely that adjustment disorders won’t meet criteria for extended treatment.
According to Andrew Sperling, a lobbyist for the National Alliance on Mental Illness, “Under the new law, we will probably see more aggressive management of mental health benefits because insurers can no longer impose arbitrary limits” (The New York Times, October 6, 2008). Since the federal law doesn’t limit the number of sessions, insurers will be putting a strong emphasis on defining and enforcing “medical necessity” before authorizing sessions.
Many practitioners have a hard time understanding “medical necessity” from the insurer’s viewpoint. Practitioners often believe, “If I say the client needs it, then it should be necessary, right?” Medical necessity is a complex concept, but it has three general principles:
1. Establishing the presence of a mental illness. To meet medical necessity, a client needs to be diagnosed with an AXIS I disorder. Treatment for a stressed client who doesn’t have a diagnosable disorder wouldn’t be covered.
2. Treatment methods should conform to established general practices. Methods used should be accepted as legitimate approaches and not considered experimental. The therapist would need to show that the client is benefiting from the approach, with improved functioning. It’s likely that evidence-based approaches would be preferred.
3. The level of treatment intensity should match the severity of illness. If a practitioner requested to see a client with an adjustment disorder every week for the next two years, the utilization reviewer would be likely to authorize 8 to 12 sessions, followed by another review.
Once the law is implemented, on January 1, 2010, insurance companies will need to provide the medical-necessity criteria to practitioners so they know the rules. As psychotherapists, we’ll need to make the case for the medical necessity of any care we provide under insurance coverage by clearly defining the problem and setting mutually defined and attainable goals with each client.
Another likely insurers’ strategy will be to “carve out” the mental health treatment benefit to a large behavioral health managed-care company to handle for them. The “carve-out company” charges insurers a set rate, so they’re assured of stable costs. If the carve-out company can provide treatment at less cost, it keeps the difference, so there’s an incentive to limit treatment. Many practitioners find such companies the most difficult to deal with because they often set up barriers requiring extensive paperwork every few sessions, so that practitioners get frustrated and end treatment prematurely. Individually, practitioners can combat these issues by carefully choosing the insurers they’ll work with. Collectively, they can form practice associations, such as the Northwest Behavioral Health Independent Provider Association in western Washington State, to lobby and negotiate with insurers.
A positive byproduct of this legislation is that it may force health plans and the practitioners who contract with them to work together, rather than to maintain an adversarial relationship. If this happens, both will benefit. Our experience as managers of a behavioral health network in Washington State bears this out. For 15 years, we’ve had a balanced budget by being clinically focused and developing close collaborative relationships with our contracted providers.
Since the new law removes the session limits, the focus will be on clinical issues and how practitioners and utilization reviewers can work together. This is a great opportunity for practitioners to do what we do best: focus on the clinical issues and help clients improve functioning and remove barriers so they can resume their process of growth and development.
Mark Lanci, M.S.W., and Anne Spreng, M.Ed., are clinicians who’ve had extensive experience managing a behavioral health network for a nonprofit insurance company. Mental health parity and other relevant topics are discussed in their book The Therapist’s Starter Guide: Setting Up and Building Your Practice, Working with Clients, and Managing Professional Growth.