The Mental Health Parity and Addiction Equity Act of 2008 went into effect in July 2010 and for the most part, health plans are complying with the legislation and figuring out how to manage costs.
The parity act requires employers who offer mental health insurance to employees to provide the same benefits for both mental and medical/surgical health plans. Prior to the act, many mental health plans had less robust coverage.
[See also: Mental health EHBs final rule released by HHS]
Health plans are managing costs through defined benefits, like out-of-pocket limits, and benefit management, said Andrew Sperling, director of legislative advocacy for the National Alliance on Mental Illness. While defined benefits have been equalized, Sperling said insurers have been using benefit management to a greater extent than before to control spending.
"To the extent plans were relying on arbitrary limits, they are not doing that anymore," Sperling said. "Many still aggressively apply utilization management. They are using benefit management to control costs and unnecessary utilization."
A report on the parity act created by the U.S. Department of Health and Human Services in February 2012 found that ambiguousness in the law has led some insurers to use medical necessity guides and utilization management practices to reduce costs.
The report, which came from interviews with experts in the industry, found that services like applied behavioral analysis for autism and outpatient psychotherapy may meet stricter medical necessity guidelines for various reasons, like the potential for abusing the treatment.
[See also: Integrating primary and behavioral care]
Industry insiders also said that utilization management – protocols determining when to preauthorize or review services for medical necessity – could also be used as a way to deny coverage or discourage treatment because of the "hassle factor."
This kind of benefit management is what Alisa Busch, assistant professor of psychiatry and of healthcare policy at Harvard Medical School and McLean Hospital, found in a study she and her colleagues worked on that analyzed how parity affected the Federal Employees Health Benefit Program. The results of their work were released this month in the American Journal of Psychiatry.
Busch and colleagues found that after parity was implemented around 2002 for federal employees, it reduced spending for beneficiaries with adjustment disorder by $62, major depression by $100 and bipolar disorder by $148 a year. Utilization of services remained the same for beneficiaries with all three conditions, but psychotherapy decreased by 12 percent for people with adjustment disorder.
"For those with the third condition, adjustment disorder, which is the least severe of the three – it's acute and not chronic – they received less psychotherapy," Busch said.
"We are hypothesizing that along with parity, benefit management was important … they had implemented different techniques that they didn't have before parity to reduce costs."
Impending legislation will likely go even further to increase mental health parity. Sperling said final regulations for the 2008 act should soon be released that will equalize benefit management between medical and mental health plans. And legislation in the Affordable Care Act will also require parity in the small group and individual markets that are absorbed into the federal or state base exchanges. These plans were excluded from the original parity legislation.