Update from Washington: Highlights of the MHPAEA Interim Final Rule

1. Update from Washington: Highlights of the MHPAEA Interim Final Rule Legal Action Center February 18, 2010

2. Legal Action Center: SAAS’s Voice in Washington, DC • Advocacy with Congress and the Administration • Expanding access to/support for alcohol and other drug prevention, treatment, recovery supports and research • Resources (annual funding process) • Policy changes (national healthcare reform, parity, Medicaid expansions) • Eliminating discriminatory policies against people with addiction histories and/or criminal records 2

3. What We’ll Discuss Today • The MHPAEA interim final rule and accompanying guidance • Status and purpose of the rule • Highlights of the rule • Next steps 3 3

4. Policy Goals of the MHPAEA • Eliminating certain forms of discrimination in insurance coverage of mental health and addiction treatment benefits • Expanding access to treatment for people with mental illness and/or addiction 4

5. Background of the MHPAEA • The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) became Public Law 110-343 in October 2008 • The MHPAEA prohibits group health plans that currently offer coverage for drug and alcohol addiction and mental illness from providing those benefits in a more restrictive way than other medical and surgical procedures covered by the plan 5

6. Status and Purpose of the MHPAEA Regulations • The MHPAEA rule and accompanying guidance was published in the Federal Register February 2nd • Issued jointly by Departments of Health and Human Services, Labor and Treasury • Seeks to provide greater clarity and guide implementation of the MHPAEA 6

7. Status and Purpose of the MHPAEA Regulations (cont’d) • Rule issued as “interim final” • Includes 90-day public comment period (closes May 3rd) • Specific areas for public comment • Rule becomes effective April 5th • Group health plans and issuers with plan years beginning on or after July 1, 2010 required to comply 7

8. Key Things to Keep in Mind • Preliminary discussion • Rule/guidance does not answer everything, lots of remaining questions/ambiguity • Scope of services/continuum of care not defined • Additional guidance expected • Departments ask for additional information in certain areas—public comment period, rule was issued as “interim final” 8

9. Key Things to Keep in Mind • Parity does not require plans to offer MH and SUD benefits • Parity requirements are only for group health plans that choose to offer MH and/or SUD benefits • State laws providing greater consumer protections remain in effect • Continuing ability of plans to manage benefits • Health care reform… • Compliance and enforcement—need for education and outreach 9

10. Central Analysis to Determine Compliance with Parity • MHPAEA prohibits group health plans/health insurers offering SUD or MH benefits from applying financial requirements or treatment limitations to SUD or MH benefits that are more restrictive than the predominant financial requirements or treatment limitations applied to substantially all medical/surgical benefits 10

11. Central Analysis to Determine Compliance with Parity (cont’d) • Rule defines “predominant” and “substantially all” • Gives guidance on how to determine whether financial requirements and treatment limitations imposed on SUD or MH benefits comply with the MHPAEA 11

12. Rule Defines Key Terms: Financial Requirements • Financial requirements defined as including: • Deductibles • Copayments • Coinsurance • Out-of-pocket maximums 12

13. Rule Defines Key Terms: Treatment Limitations • Rule distinguishes between quantitative treatment limitations and non-quantitative treatment limitations • Quantitative treatment limitations • Day or visit limits • Frequency of treatment limits 13

14. Rule Defines Key Terms: Treatment Limitations (cont’d) • Non-quantitative treatment limitations • Medical management tools • Rule includes an “illustrative” non-exhaustive list: • Medical management standards • Prescription drug formulary design • Fail-first policies/step therapy protocols • Standards for provider admission to participate in a network • Determination of usual, customary and reasonable amounts • Conditioning benefits on completion of a course of treatment 14

15. Rule Identifies Classifications of Benefits for Purposes of the Parity Analysis • Six categories of classification of benefits: • Inpatient, in-network • Inpatient, out-of-network • Outpatient, in-network • Outpatient, out-of-network • Emergency care • Prescription drugs 15

16. Comparing Medical/Surgical Benefits with SUD and MH Benefits • Rule states that group health plans offering benefits for an SU or MH condition or disorder must provide those benefits in each classification for which any medical/surgical benefits are provided • If the plan provides medical/surgical benefits in one of the classifications but does not provide SUD or MH benefits in that classification, that would constitute a treatment limitation 16

17. Parity Analysis for Financial Requirements and Treatment Limitations: Same Type in Same Classification of Benefits • Rule specifies that, when examining whether SUD or MH benefits are being offered at parity with other medical/surgical benefits, must compare financial requirement or treatment limitation only with financial requirements or treatment limitations of the same type within the same classification • Rule establishes standards to measure plan benefits 17

18. Special Analysis for Non-quantitative Treatment Limitations/Medical Management Tools • Rule states that processes/factors used to apply non-quantitative treatment limitations to SUD or MH benefits in a classification have to be comparable to and applied no more stringently than the processes/factors used to apply to medical/surgical benefits in the same classification • Guidance acknowledges that there may be different clinical standards used in making these determinations 18

19. Central Analysis to Determine Adherence to Parity • MHPAEA prohibits group health plans/health insurers offering SUD or MH benefits from applying financial requirements or treatment limitations to SUD or MH benefits that are more restrictive than the predominant financial requirements or treatment limitations applied to substantially all medical/surgical benefits 19

20. “Predominance” Defined by the Interim Final Rule • Financial requirement or treatment limitation is predominant if it is the most common or frequent of a type of limit or requirement • Predominant level (amount) of a type of financial requirement or quantitative treatment limitation is defined as the level that applies to more than one-half of the medical/surgical benefits subject to the financial requirement or quantitative treatment limitation in that classification 20

21. “Substantially All” Defined by the Interim Final Rule • If a financial requirement or quantitative treatment limitation on a medical/surgical benefit applies to at least two-thirds of the benefits in that classification, this is considered to be “substantially all” of those benefits • If a type of financial requirement or quantitative treatment limitation does not apply to at least two-thirds of the medical/surgical benefits in a classification, that type of requirement or limitation cannot be applied to SUD or MH benefits in that same classification 21

22. Additional Highlights from the MHPAEA Rule/Guidance • Rule affirms that, for group plans offering MH or SUD benefits, where out-of-network medical/surgical benefits are provided, must also be provided for MH and SUD benefits • Guidance affirms that the MHPAEA does not preempt any State laws except those that would prevent the application of the MHPAEA 22

23. Additional Highlights from the MHPAEA Rule/Guidance • Discussion of MHPAEA requirements applying to prescription drugs • Parity requirements do apply • Financial requirements imposed on drugs prescribed to treat SUD or MH conditions must be compared with those imposed in same tier in which drug is classified • Plans can satisfy parity requirement for prescription drugs if they: • Show they’re imposing different levels of financial requirements on different tiers of drugs based on “reasonable factors” and • Without regard to whether the drug is generally prescribed for medical/surgical conditions or SUD or MH conditions 23

24. Additional Highlights from the MHPAEA Rule/Guidance • Rule provides guidance on the two MHPAEA disclosure provisions requiring: • Criteria for medical necessity determinations for SUD or MH benefits be made available to participants and beneficiaries, and • Reasons for denial of reimbursement or payment for SUD or MH services be made available to participants and beneficiaries 24

25. Additional Highlights from the MHPAEA Regulations • Guidance makes clear that there cannot be a separate classification of generalists and specialists in determining whether certain financial requirements or treatment limitations meet the MHPAEA parity requirements 25

26. Additional Highlights from the MHPAEA Regulations • Guidance discussion of Employee Assistance Programs (EAPs): • States that, generally, an EAP providing MH or SUD counseling services in addition to MH or SUD benefits being offered that otherwise comply with parity, wouldn’t violate MHPAEA requirements • However, EAPs serving as gatekeepers (where participants are required to exhaust EAP benefits before can access MH or SUD benefits) would be considered a non-quantitative treatment limitation • If other gatekeeping processes with exhaustion requirements aren’t applied to medical/surgical benefits, would violate rule that non-quantitative treatment limitations be applied comparably/not more stringently to MH and SUD benefits 26

27. Additional Highlights from the MHPAEA Regulations • Rule prohibits separate cost-sharing requirements or treatment limitations only imposed on SUD or MH benefits • Rule prohibits insurers from setting up separate plans or benefit packages to try to avoid complying with the MHPAEA requirements; guidance states that separately administered benefit packages should be considered as a single plan 27

28. Areas Identified as Subject to Additional Regulatory Action • Medicaid managed care plans • Provision on exemption based on cost increase • Departments would specifically like comment on: • Whether additional examples on non-quantitative treatment limitations/how parity analysis applies would be helpful • Whether/how the MHPAEA addresses the scope of services/continuum of care issue • What additional information would be helpful to ensure compliance with disclosure requirements 28

29. Next Steps on Parity • Submitting comments in response to the interim final rule • Educating ourselves and others about the MHPAEA requirements—necessary to ensure compliance! • Continuing to fight for stronger protections for people in need of addiction and/or mental health care 29

30. Keeping Yourself Informed • LAC and SAAS newsletters, updates and alerts • Contact Gab (gdelagueronniere@lac-dc.org) or Dan (dbelnap@lac.org) at 202-544-5478 with any questions • Thank you! 30 30