Mental Health & Addiction Treatment: Moving Forward

1. Mental Health & Addiction Treatment: Moving Forward Mark Covall, President/CEO National Association of Psychiatric Health Systems Presentation to Alaska State Hospital and Nursing Home Association September 2014

2. Prevalence and Trends Mental and substance use disorders National Association of Psychiatric Health Systems - September 2014

3. Millions of Americans Affected BY MENTAL ILLNESS One in every five adults (45.9 million Americans aged 18 or older) experienced mental illness in the past year. Some 5% of the adult population (11.4 million adults) suffered from serious mental illness in past year (defined as one that resulted in serious functional impairment that substantially interfered with or limited one or more major life activities) SOURCE: SAMHSA. January 2012. See http://www.samhsa.gov/data/NSDUH/2k10MH_Findings/. National Association of Psychiatric Health Systems - September 2014

4. Yet Need Is Only Partially Met Only about 4 in 10 people (39.2%) experiencing any mental illness in the past year – and only 60.8% of those experiencing serious mental illness – received any mental health services during that period. SOURCE: SAMHSA. 2010 National Survey on Drug Use and Health. January 2012. www.samhsa.gov/data/NSDUH/2k10MH_Findings/. Some 23.1 million Americans aged 12 or older (9.1%) needed specialized treatment for a substance abuse problem, but only 2.6 million (or roughly 11.2%) received it. SOURCE: SAMHSA. 2010 National Survey on Drug Use and Health. September 8, 2011. Release at www.samhsa.gov/newsroom/advisories/1109075503.aspx. National Association of Psychiatric Health Systems - September 2014

5. Trends and Projections Mental Health and Substance Abuse National Association of Psychiatric Health Systems - September 2014

6. Total Mental Health & Substance Use Spending (2014-2020) • 2014: $210.6 billion • 2020: $280.5 billion (projected) • Includes all treatment spending for mental health and substance use disorders (including prescription drugs, hospitals, and all other treatment settings) SOURCE: Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. National Association of Psychiatric Health Systems - September 2014

7. Mental Health/Substance Use Spending Projected Growth (vs. All Health Spending) • 1998-2009: • 2.9% of mental health increase directly related to increase in prescription drug spending • 2009-2020: • major driver of mental health decrease is expiration of pharmaceutical drug patents SOURCE: Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. National Association of Psychiatric Health Systems - September 2014

8. Projected Mental Health/Substance Use Spending, to 2020(as a Proportion of Overall Health Spending) SOURCES: • Mechanic D. Health Affairs. 33(8): 1416-1424.August 2014 • Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. National Association of Psychiatric Health Systems - September 2014

9. Mental Health/Substance Use as a Proportion of Overall Health Spending (by category) National Association of Psychiatric Health Systems - September 2014

10. Reasons Behind Slower Overall Growth • 2007-2009: • Recession • 2009-2012: • State hospital closures and reductions in beds • 2011: • Medicare payment rate changes in the Affordable Care Act and Budget Control Act of 2011 • 2014-2016: • Decline in prescription drug prices due to loss of patent protection SOURCE: Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. National Association of Psychiatric Health Systems - September 2014

11. The Future of Behavioral Health Care Macro Trends Health System Trends National Association of Psychiatric Health Systems - September 2014

12. Macro Trends National Association of Psychiatric Health Systems - September 2014

13. Macro Trends More / improved coverage Different payment structures (e.g., case rates/ bundled payments) More managed Medicaid More outpatient / community-based More emphasis on quality and accountability Stigma reduced Shortage of psychiatrists / therapists National Association of Psychiatric Health Systems - September 2014

14. Health System Trends National Association of Psychiatric Health Systems - September 2014

15. Health System Trends New delivery models / ACOs Health systems expanding behavioral health services…especially those in risk-sharing contracts Increased awareness of mental health/substance use comorbidities and impact on chronic disease management Integration of mental health and primary care -continued- National Association of Psychiatric Health Systems - September 2014

16. Health System Trends (continued) • Telemedicine growing • More use of mid-levels, nurse practitioners • Specialty programs • Eating disorder • Dual diagnosis • Women’s programs • Gay/lesbian • Military National Association of Psychiatric Health Systems - September 2014

17. Key Mental Health & Substance Use Policy Issues Parity Affordable Care Act National Association of Psychiatric Health Systems - September 2014

18. Federal Parity Law “Game – changer” National Association of Psychiatric Health Systems - September 2014

19. The Parity Law The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act signed into law on October 3, 2008. Basically, became effective January 1, 2010. National Association of Psychiatric Health Systems - September 2014

20. Key Provisions Applies to 113 million employed Americans, including individuals in ERISA plans (self-insured companies) Requires equity in financial requirements Requires equity in treatment limits -continued- National Association of Psychiatric Health Systems - September 2014

21. Key Provisions (continued) • Does not mandate mental health benefits • Exempts certain businesses • With 50 or fewer employees • Posting an overall cost increase due to parity requirements (2%+ in first year; 1% in subsequent years) • Exemption only lasts one year; need to reapply the following year (or comply) National Association of Psychiatric Health Systems - September 2014

22. Interim Final Regulations • Published in the February 2, 2010, Federal Register at http://edocket.access.gpo.gov/2010/pdf/2010-2167.pdf • Department of Health and Human Services • Treasury Department • Labor Department • Went into effect for health plan years beginning on or after July 1, 2010. • Means that most health plans were not subject to the regulations until January 1, 2011. National Association of Psychiatric Health Systems - September 2014

23. Treatment Limitations • The regulations go further with respect to treatment limitations. • The regulations define treatment limitations as quantitative and non-quantitative. -continued- National Association of Psychiatric Health Systems - September 2014

24. Definitions • Quantitative limits: • Are numerical (e.g., 30 inpatient days). • Non-quantitative treatment limitations: • are such things as (NOTE: This list is not exhaustive): • medical management standards, including standards for admission to participate in a network; • determination of usual, customary, and reasonable charges, • requirement for using lower cost therapies before the plan will cover more expensive therapies (also known as fail-first policies or step therapy protocols), • conditioning benefits on the completion of a course of treatment. National Association of Psychiatric Health Systems - September 2014

25. Comparison of Med/Surg and Psychiatric Benefits • Plans are only permitted to compare medical/surgical and mental health benefits for purposes of applying parity requirements using six specified categories: • inpatient, in-network • inpatient, out-of-network • outpatient in-network • outpatient out of network • emergency care • prescription drugs National Association of Psychiatric Health Systems - September 2014

26. Final Rule • Issued November 8, 2013 • Includes an intermediate classification to clarify the law is intended to include coverage for a full range of services (inpatient – intermediate –outpatient). • Makes clear that insurers must have comparability in management practices • Health plan transparency • Removes exception to NQTLs National Association of Psychiatric Health Systems - September 2014

27. Mental Health Parity • Final rule applies to plan years beginning on or after July 1, 2014. • Until the rules take effect, plans must continue to comply with parity provisions of the interim final regulations. National Association of Psychiatric Health Systems - September 2014

28. Mental Health Parity • Rule applies to: • 113 million employed Americans, including individuals in self-insured companies (large employers with more than 50 employees). • Parity is also now embedded in the Affordable Care Act and extends federal parity protections to those Americans obtaining small group and individual health plan coverage under the ACA. National Association of Psychiatric Health Systems - September 2014

29. Mental Health Parity • Rule does NOT apply to: • Medicaid managed care organizations • Children’s Health Insurance Program (CHIP) • Alternative Benefit Plans (i.e., Medicaid expansion plans under the ACA) Further clarification is needed because the rule states the statute applies to these entities. National Association of Psychiatric Health Systems - September 2014

30. Key Provisions and Clarifications in Final Parity Rule • Includes anintermediate care classification to clarify the law is intended to include the full continuum of services for behavioral health care which includes (inpatient-intermediate-outpatient). This provision clarifies that the interim rule never intended to excludeoutpatient, partial hospitalization and residential care. • Makes clear that insurers must have comparability in management practice (removes loophole that allowed behavioral health benefits to be managed differently). -continued- National Association of Psychiatric Health Systems - September 2014

31. Key Provisions and Clarifications in Final Parity Rule (continued) • New disclosure requirements are included to require more transparency from health plans in the areas of medical necessity determinations and management practices. • States will have primary enforcement authority over health insurance issuers. As such, states will be the primary means of effectuating mental health parity implementation. • Government will continue to issue more guidance on final rule. National Association of Psychiatric Health Systems - September 2014

32. Next Steps Medicaid / parity rule Enforcement National Association of Psychiatric Health Systems - September 2014

33. Patient Protection and Affordable Care Act (ACA) Signed into law March 23, 2010, by President Obama National Association of Psychiatric Health Systems - September 2014

34. Key Provisions of the ACA Individual mandate requires almost everyone to obtain coverage or face a penalty Employers with 50 or more employees must provide coverage or face a penalty (delayed for 1 year until 2015) Covers people regardless of any preexisting conditions Young people up to age 26 gain insurance through their parents’ plan (3.1 million) National Association of Psychiatric Health Systems - September 2014

35. Affordable Care Act (ACA) • Will expand coverage to 32 million Americans through either: • the health insurance exchanges or • Medicaid expansion National Association of Psychiatric Health Systems - September 2014

36. ACA extends parity to two key groups (continued) Group 1 National Association of Psychiatric Health Systems - September 2014

37. ACA extends parity to two key groups (continued) Group 2 National Association of Psychiatric Health Systems - September 2014

38. ACA extends parity to two key groups (continued) By building on the structure of the MHPAEA, the ACA will extend federal parity protections to 62.5 million Americans. National Association of Psychiatric Health Systems - September 2014

39. Affordable Care Act (ACA) • States are mandated to participate in the insurance exchanges • States can: • Run their own exchange, • Let the feds run the exchange, or • Establish a partnership with the feds National Association of Psychiatric Health Systems - September 2014

40. State Health Insurance Exchanges As of 8/6/13, Center on Budget & Policy Priorities (http://www.cbpp.org/files/CBPP-Analysis-on-the-Status-of-State-Exchange-Implementation.pdf) National Association of Psychiatric Health Systems - September 2014

41. Health Insurance Exchanges Approximately 23 million people will purchase individual or small group private health insurance through the exchanges. ACA created health insurance subsidies (in the form of premium tax credits and cost-sharing reductions) to help eligible individuals and families purchase health insurance through an exchange. National Association of Psychiatric Health Systems - September 2014

42. State Health Insurance Exchanges • October 1, 2013: • Exchanges open enrollment period started • Federal on-line health Insurance exchange marketplace is live at www.HealthCare.gov • Coverage begins January 1, 2014 • Subsidies available beginning in 2014 • Open enrollment ends March 31, 2014 National Association of Psychiatric Health Systems - September 2014

43. Essential Benefit Requirements • Mental health and addiction services are one of the 10 essential benefit requirements in the plans offered through the insurance exchanges and in the Medicaid expansion. • The federal parity law applies to the mental health/ addiction essential benefit. • Hospitalization • Mental health/addiction • Ambulatory • Emergency • Maternity • Pediatric services • Laboratory services • Prescription drugs • Rehabilitative and habilitative services • Preventive and wellness services National Association of Psychiatric Health Systems - September 2014

44. Medicaid Expansion States – at their option – can choose to expand Medicaid with the feds paying 100% of the cost in the first three years and no less than 90% going forward National Association of Psychiatric Health Systems - September 2014

45. Medicaid Expansion Expands eligibility to adults ages 19-64 with income at or below 133% of the federal poverty level No deadline for state in Medicaid expansion decision; however, coverage begins January 1, 2014 States that want to take advantage of the three-year window for 100% federal match have already made their decision to take the Medicaid expansion option National Association of Psychiatric Health Systems - September 2014

46. Status of State Medicaid Expansion As of 7/18/13, Center on Budget & Policy Priorities http://www.cbpp.org/cms/index.cfm?fa=view&id=3819 National Association of Psychiatric Health Systems - September 2014

47. Medicaid Expansion • Arkansas Model • Arkansas’ “Private Option” model uses the federal funding for Medicaid expansion to buy private health insurance coverage through the state exchange • Numerous Republican governors considering Arkansas model for Medicaid expansion • It’s a way to take Medicaid money without being branded as “Obamacare” supporters National Association of Psychiatric Health Systems - September 2014

48. Estimated Impact of ACA on Mental Health SOURCE: Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. • In 2020: • Will increase mental health spending (overall) by 1.9% ($4.4 billion) in 2020. • Will also alter mental health financing, primarily from Medicaid and private insurers. • Medicaid spending in states that did not decline to expand enrollment is expected to be 7.8% ($5.2 billion) higher (than without the ACA) • Private insurance is expected to be 3.4% ($2 billion) higher (than without the ACA) National Association of Psychiatric Health Systems - September 2014

49. Estimated Impact of ACA and Parityon Substance Use Spending • In 2020 substance use spending (overall) will increase by 7.2% ($2.8 billion) (vs. 1.9% in mental health). • Substance use disorders are prevalent among young adults, who are over-represented among those who are currently uninsured and who may gain insurance. • Many young people with severe mental illnesses are already insured by Medicaid or Medicare by virtue of disability (which lowers potential increase in spending under ACA expansions). • Prescription patent expirations are not expected to have a significant impact on substance abuse spending. SOURCE: Mark TL, et al. Health Affairs, 33(8): 1407-1415. “Spending on mental and substance use disorders…” August 2014. National Association of Psychiatric Health Systems - September 2014

50. The Helping Families in Mental Health Crisis Act H.R.3717 introduced by Rep. Tim Murphy (R-PA) National Association of Psychiatric Health Systems - September 2014