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Government News
Four More States See Value of Parity Laws
Psychiatric News
Volume 36 Number 16 page 8-28

Illinois became the 34th state last month to enact a parity law.

SB 1341, signed by Illinois Gov. George Ryan (R), requires group health plans to provide coverage for nine "serious mental illnesses" under the same terms and conditions provided for physical illnesses. That means that deductibles, copayments, and coinsurance amounts must be the same for mental illnesses as for other kinds of illnesses.

The nine illnesses are schizophrenia, paranoid and other psychotic disorders, bipolar disorders, major depressive disorders, schizoaffective disorders, pervasive developmental disorders, obsessive-compulsive disorder, depression in childhood and adolescence, and panic disorder.

Beginning next January, group health insurers must provide coverage for 45 days of inpatient treatment and 35 outpatient visits for mental illness annually. Lifetime limits are prohibited under the new law.

The legislation also directs the Department of Insurance to conduct a study of the costs and benefits of the parity law and report back to the legislature by March 2005, the year the law is due to sunset.

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Earlier last month, a comprehensive parity bill (S 832), was signed by Rhode Island Gov. Lincoln Almond (R), mandating coverage for mental and substance abuse disorders listed in the most recent Diagnostic and Statistical Manual (DSM) or International Classification of Diseases (ICD).

Beginning next January, all health care insurers in Rhode Island must apply the same "terms and conditions" to mental illness and substance abuse as for other illnesses and diseases.

The new law amends the state’s previous parity law, which was enacted in 1994. That law applied only to "serious mental illnesses" and restricted inpatient stays to 45 days annually.

Because there are no annual day limits on medical and surgical inpatient stays, there are no such limits for mental illness stays under the new legislation.

Other provisions of the law stipulate that outpatient visits for substance abuse treatment are covered for up to 30 hours annually, community residential treatment for up to 30 days annually, and detoxification for up to five episodes or 30 days, whichever occurs first.

Michael Silver, M.D., the legislative representative for the Rhode Island Psychiatric Society (RIPS), told Psychiatric News that a mental health coalition including RIPS, the National Alliance for the Mentally Ill (NAMI)-Rhode Island, and the local chapter of the National Association of Social Workers has been lobbying for full parity for at least two years.

"What provided the impetus this year to change the 1994 parity law was a local newspaper story that ran about six months ago about a girl with anorexia nervosa who was discharged prematurely from a local hospital. The lieutenant governor saw the article and urged the legislature to introduce a new parity bill that added anorexia nervosa to the list of serious mental illnesses. That became S 832, which was introduced in March," said Silver.

However, proponents of full parity offered a competing bill that was accepted by the bill’s sponsors as a substitute amendment to S 832 and was passed by the legislature in June, said Silver.

The new law excludes coverage for treatment of mental retardation, learning disorders, communication disorders, motor skills disorders, and disorders classified as "V" codes (defined in DSM as "relational problems" and "conditions that may be a focus of clinical attention").

"We had less of a fight this year from the insurance industry than in 1994, because its experience with health insurance premiums showed only a small increase," said Silver.

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Kansas enacted a new parity law in May that, starting next January, requires all group health plans that cover mental illness to use the same deductibles, coinsurance, and other limits that apply to physical illnesses, according to the legislation.

A major change from the state’s 1986 parity law was removing the discriminatory lifetime dollar cap ($7,500) on outpatient visits. In exchange, parity proponents—including the Kansas Psychiatric Society and NAMI-Kansas—agreed to a limit on the annual number of outpatient psychiatric treatment visits and inpatient psychiatric treatment days of 45 each, according to the July/August Health Affairs.

The new law retains the outpatient lifetime cap of $7,500 for alcohol and substance abuse treatment, but provides for 30 days of inpatient coverage, according to the legislation.

Group health plans that cover prescription drugs must also cover psychotropic drugs under the same terms and conditions as they do for other drugs.

In contrast to the Rhode Island law, mental health coverage is not mandated. As a concession to the insurance industry’s concern that removing the lifetime cap on outpatient visits would drive up premiums, parity proponents agreed to restrict parity to "biologically based" illnesses including schizophrenia, major depression, bipolar disorder, attention deficit/hyperactivity disorder, and autism, according to the July/August Health Affairs.

In other news, Delaware’s Gov. Ruth Ann Minner (D) signed legislation (HB 100) that amends the state’s 1998 parity law. Drug and alcohol dependency was added to the list of nine serious mental illnesses covered in the previous law. Although the bill’s sponsors introduced a comprehensive parity bill, only the substance abuse provision passed, according to Paula Johnson, deputy director for state affairs in APA’s Division of Government Relations.

The state parity laws are summarized in the July "State of the States" newsletter on APA’s Web site. It can be accessed by going to www.psych.org/libr_publ/state_up.cfm and clicking "July 2001."

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