Blue Cross and Blue Shield of Illinois

 

June 6, 2014

Legislative Update
Overview of Mental Health Parity and Addiction Equity Act of 2008 Final Rule

On Nov. 13, 2013, three federal agencies ― the U.S. Departments of Treasury, Labor and Health, and Human Services ― jointly published a long-awaited final rule that implements the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

We have had a number of questions related to implementation of the final rule. To address some of those questions, we are providing a high-level overview of the MHPAEA final rule. We will provide additional information when implementation details are complete.

Introduction
The MHPAEA final rule incorporates most of the provisions outlined in the interim final rule without change. However, the final rule does amplify or clarify other provisions, and does introduce some new concepts and requirements, which Blue Cross and Blue Shield of Illinois (BCBSIL) is reviewing to ensure that we are adopting and adhering to, as applicable, any changes the final rule made.

Generally, MHPAEA, its interim final rule, and now the final rule prohibit certain individual and group health plans from applying financial requirements (e.g., copays) or treatment limits (e.g., number of annual visits) on mental health or substance use disorder services that are more restrictive than those applied to the health plan’s medical and surgical benefits. They also prohibit certain individual and group health plans from imposing non-quantitative treatment limitations (NQTLs) (e.g., medical management techniques, network reimbursement and entrance requirements, etc.) on mental health and substance use disorders that are more stringently applied than those applied to the health plan’s medical and surgical benefits.

The Final Rule
Applicability and Effective Dates.Generally, the final rule applies to group health plans and health insurance issuers for plan years beginning on or after July 1, 2014. For the most part, this means that calendar year plans and policies would need to come into compliance with the final rule beginning on Jan. 1, 2015.

Large Group Coverage
The final rule applies to:

  1. Large, self-insured group health plans ― grandfathered and non-grandfathered
  2. Large, insured group health plans ― grandfathered and non-grandfathered

Note: Large group plans are not mandated to provide mental health and/or substance use disorders benefits, but if they do, these benefits must be in parity with the medical/surgical benefits of the plan.

Small Group Coverage

  1. An insured, non-grandfathered small group plan (with exception to the Transitional Policy). The Transitional Policy, established by the Obama administration, allows non-grandfathered small group 1-50 plans that do not meet Affordable Care Act (ACA) requirements, the option to extend their plans until 2016, as allowed by states and insurers. The extension for Illinois is one year.
  2. State laws: Some states may have parity laws making plans subject to MHPAEA. In Illinois, all insured small group plans (including all non-grandfathered and grandfathered coverage) must currently comply with state mental health parity law, which mirrors MHPAEA and its interim final rule.

Small Group Coverage ― Exemptions
MHPAEA and its regulations do not apply to:

  1. Self-funded, small group health plans
  2. Insured, grandfathered, small group health plans

Individual Coverage
Historically, MHPAEA and its interim final rule did not apply to individual coverage. ACA changed that by requiring individual coverage to comply with federal mental health parity beginning in 2014.

  1. Grandfathered individual market coverage. Grandfathered individual health insurance does not have to cover behavioral health services, but if it does, the coverage must comply with MHPAEA and its final rule on policy years beginning on or after July 1, 2014, which, for calendar year policies, begins Jan. 1, 2015.
  2. Non-grandfathered individual market coverage (with exception to the Transitional Policy). Non-grandfathered individual health insurance does have to cover certain behavioral health services because of the essential health benefits final rule.

Provisions
As noted earlier, the final rule incorporates most of the interim final rule without any changes. However, there are a few provisions that were clarified or expanded. The major provisions are outlined below:

  1. Expansion of benefit sub-classifications for mental health parity analysis. The interim final rule required that parity must be determined classification-by-classification in six specific classifications of benefits. The final rule allowed for additional sub-classifications:
    • Inpatient, in-network
      • Sub-classification for multiple network tiers (optional)
    • Inpatient, out-of-network
    • Outpatient, in-network
      • Sub-classification for office visits (optional)
      • Sub-classification for multiple network tiers (optional)
    • Outpatient, out-of-network
      • Sub-classification for office visits (optional)
    • Emergency care
    • Prescription drugs
  1. Intermediate levels of care. While not setting hard and fast rules, the federal government suggests that intermediate care includes:

    • Medical treatment rendered in skilled nursing facilities, rehabilitation hospitals or through home health care
    • Behavioral health treatment rendered through partial hospitalization, intensive outpatient programs (IOP), or in a residential treatment center (RTC)

In addition, the federal government suggests that the following types of medical and behavioral health-related intermediate care are comparable:

    • Skilled nursing facilities and rehabilitation hospitals are comparable to RTCs
    • Home health care is comparable to IOP and partial hospitalization
  1. Expansion of Non-Quantitative Treatment Limitations (NQTLs). The final rule includes two new examples (see bold) to the illustrative list of NQTLs that cannot be more stringently applied than those applied to the health plan’s medical and surgical benefits:
      1. Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative
      2. Formulary design for prescription drugs
      3. For plans with multiple network tiers (such as preferred providers and participating providers), network tier design
      4. Standards for provider admission to participate in a network, including reimbursement rates;
      5. Plan methods for determining usual, customary, and reasonable charges
      6. Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as fail-first policies or step therapy protocols)
      7. Exclusions based on failure to complete a course of treatment
      8. Restrictions based on geographic location, facility type, provider specialty and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage
  1. Availability of plan information. The final rule reminds group health plans and carriers of the following:
    • Criteria for medical necessity determinations made under a group health plan with respect to behavioral health benefits (or health insurance coverage offered in connection with the plan with respect to such benefits) must be made available by the plan administrator (or the health insurance issuer offering such coverage) to any current or potential participant, beneficiary, or contracting provider upon request.
    • The reason for any denial under a group health plan (or health insurance coverage offered in connection with such plan) of reimbursement or payment for services with respect to behavioral health benefits in the case of any participant or beneficiary must be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary.

Importantly, the final rule includes additional language, which makes clear that, upon request, plans must provide documents, records and other information relevant to a claimant’s claim for benefits, which “includes documents with information on medical necessity criteria for both [medical] benefits and [behavioral health] benefits, as well as the processes, strategies, evidentiary standards, and other factors used to apply an [NQTL] with respect to [medical] benefits and [behavioral health] benefits under the plan.”

Our MHPAEA Implementation Team is confident that BCBSIL is in compliance with the law and has made a reasonable, good faith effort interpreting the statutory and regulatory language. Our team is now working toward ensuring that BCBSIL is in compliance with the final rule. As implementation decisions are finalized, we will provide additional detailed information.

This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.

 
  


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