Update from Washington: Highlights and Implications of the Federal Parity Law

1. Update from Washington: Highlights and Implications of the Federal Parity Law Gabrielle de la Gueronniere, Legal Action Center

2. What We’ll Discuss Today • The MHPAEA interim final rule and accompanying guidance • Status and purpose of the rule • Highlights of the rule • Implications of new federal healthcare law • Next steps 2 2

3. 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 3

4. 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 became effective April 5th • Group health plans and issuers with plan years beginning on or after July 1, 2010 required to comply 4

5. 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” 5

6. Key Things to Keep in Mind • The federal parity law does not: • Apply to individual or small group plans (plans with less than 50 employees) • 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 • Certain plans can opt out • Group health plans whose costs increase more than two percent in the first year and one percent after that • Non-federal governmental employers providing self-funded group health plan coverage 6

7. Key Things to Keep in Mind • State laws providing greater consumer protections remain in effect • State laws providing greater coverage, rights, methods of access to treatment and consumer protections NOT preempted • Continuing ability of plans to manage benefits • Certain managed care organizations contesting regs—recent lawsuit filed • Compliance and enforcement—need for education and outreach 7

8. 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 8

9. Rule Defines Key Terms: Financial Requirements • Financial requirements defined as including: • Deductibles • Copayments • Coinsurance • Out-of-pocket maximums 9

10. 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 10

11. 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 11

12. 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 12

13. 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 13

14. 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 14

15. Additional Highlights from the MHPAEA Rule/Guidance • Guidance affirms that the MHPAEA does not preempt any State laws except those that would prevent the application of the MHPAEA • 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 15

16. Additional Highlights from the MHPAEA Rule/Guidance • Regulations prohibit certain plan activities aimed at avoiding compliance with parity • Separate classifications for specialists and generalists • Separate cost-sharing requirements or treatment limitations only imposed on SUD or MH benefits • Separate plans or benefit packages • Parity requirements do apply to prescription drugs • Discussion of Employee Assistance Programs (EAPs) 16

17. 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 17

18. Intersection Between New Healthcare Law and Parity • Federal healthcare bill signed into law March 23rd • Relevant key provisions: • Substance use disorder and mental health (SUD/MH) services in the basic benefit package • All plans in the healthcare exchanges must comply with Wellstone/Domenici • Requirement that individual and small group plans participating in the exchanges offer SUD/MH services and that benefits be offered at parity • Medicaid expansions • Benchmark plan offered to new expansion of childless adults includes SUD/MH services and they must be offered at parity 18

19. Next Steps on Parity • Submitting comments in response to the interim final rule • Inclusion of non-quantitative treatment limitations • Scope of services? • Additional key points • Educating ourselves and others about the MHPAEA requirements—necessary to ensure compliance • Working with providers, the recovery community, state and local policy-makers, and other stakeholder groups • Intersection with State law protections—working with relevant state offices • Enormous regulatory piece for new healthcare reform law—implications on parity? • Continuing to fight for stronger protections for people in need of addiction and/or mental health care 19

20. Questions? • Gabrielle de la Gueronniere (gdelagueronniere@lac-dc.org) 202-544-5478 www.lac.org • Federal agency hotlines (parity compliance): • 1–866–444–EBSA (3272) (DOL) • 1-877-267-2323 extension 6-5511 (CMS) 20 20