Parity to Become Federal Law Despite Rule-Making Delay

Federal officials failed to meet an October deadline to issue regulations guiding the implementation of a landmark law that requires insurance parity coverage for mental illnesses. However, the law will become effective at the start of 2010 irrespective of the status of the final federal rules.

Kathleen Sebelius, secretary of Health and Human Services (HHS), wrote to congressional leaders on October 2 to inform them that regulations for the 2008 mental health parity law would be delayed until January 2010. The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (PL 110-343) required federal officials to issue regulations guiding its implementation by October 3, 2009.

Federal officials said the delay in the rules followed extensive comments from the public about the parity law. Sebelius said that HHS, the Labor Department, and the Treasury Department, which are jointly responsible for implementing the parity law, received more than 400 written comments from mental health stakeholders and the public on various aspects of the law so far this year.

The delay came as little surprise to some mental health care experts, who said that the time between the October 2008 enactment of the law and the deadline for issuance of its complex regulations—a mere 12 months—was just too short to do the job right.

“It would have been better to have regulations out earlier, but that wasn't going to happen,” said Andrew Sperling, J.D., director of legislative affairs for the National Alliance on Mental Illness.

In the meantime, federal health officials have directed insurers to make reasonable efforts to adhere to the law's intent in the absence of regulations, according to mental health advocates.

Toward that end, America's Health Insurance Plans, a trade association representing health insurers, told advocates that insurance firms already have changed policies to come into compliance with the law, although insurers are seeking further guidance from regulators on some technical questions.

Federally regulated insurers are not expected to overtly ignore requirements that they cover mental illness treatments at parity with other health conditions in plans that offer psychiatric coverage. Still, there are concerns that flawed implementation of the law by insurers—intentional or unintentional—could occur during this unregulated period to the detriment of patients.

In a May 2009 letter to the HHS, Labor, and Treasury secretaries, James H. Scully Jr., M.D., medical director of APA, wrote, “APA has concerns that, after the implementation of parity, insurers will employ less visible means of restricting access to treatment for mental illness and/or substance use disorders that will perpetuate the discriminatory coverage schemes that the [parity law] sought to eliminate.”

More recently, Sen. Al Franken (D-Minn.) and Rep. Patrick Kennedy (D-R.I.) led other members of Congress in writing Sebelius about their concerns that the lack of regulations could lead to “misinterpretations” of the law.

Even though the parity law included sufficient detail for insurers to begin to change their rules to comply with it, advocates said regulations are crucial. Clear and precise regulations could help avoid potential problems in insurance coverage decisions regarding scope of services, medical management, treatment limitations, and the use of separate deductibles for mental health care.

For instance, among the changes required by the law are equalization of cost-sharing policies, day and visit limitations, maximum out-of-pocket limits, and other deductibles.

In his letter to the HHS, Labor, and Treasury secretaries, Scully urged regulators to encourage insurance plans to offer a “combined deductible” for both mental health and medical/surgical benefits. Although the 2008 parity law allows plans to offer so-called separate but equal deductibles, federal regulators helped spur parity compliance when they asked insurers of federal employees to integrate deductibles after parity coverage was required for those workers several years ago.

Regulations also are needed to keep insurers from using “aggressive benefit management” to establish de facto treatment limitations prohibited under the law. One such approach would limit psychiatrists' reimbursements to a narrow set of services, while leaving uncovered other needed services such as coordinating care management, talking with patients' families, and discussing treatment options.

Another regulatory action that APA and other mental health advocates are urging is for federal health officials to conduct “real-time monitoring of insurance coverage and management practices,” according to Scully. That would allow regulators to identify and quickly address abuses of the parity law.

More information on congressional efforts to encourage parity regulations is posted at <www.nmha.org/download.cfm?DownloadFile=0724A4F1-1372-4D20-C83393206CDB4865>.