Colorado Psychiatrists Succeed In Getting Parity Loophole Closed

The Colorado Psychiatric Society’s effort to convince lawmakers to improve the state’s parity law paid off last month when Colorado Governor Bill Owens (R) signed a bill that ends one form of insurance bias against mental health care in the state’s 1997 mental health parity law.

The new legislation prohibits managed care companies from using utilization review procedures to restrict payment for mental illness treatment more than they do for treatment of physical illnesses, according to the bill. It closes a loophole in Colorado’s 1997 parity law.

State Representative Kathleen Matthews, M.D., told Psychiatric News that managed care companies were circumventing the parity law by imposing “unfair” utilization review practices on psychiatrists.

The parity law mandated equal coverage for schizophrenia, schizoaffective disorder, bipolar disorder, major depression, obsessive-compulsive disorder, and panic disorder, according to Matthews.

“Psychiatrists have been required to fill out lengthy managed care forms to get approval for treatment every three or four sessions. Among the questions asked are does the patient have a history of sexual abuse or substance abuse,” said Matthews.

She complained that when psychiatrists answered yes to one of these questions, the managed care companies used that information to deny treatment, stating that the problem wasn’t psychiatric. “These questions are intrusive and are not on managed care forms filled out by other medical specialties.”

Although the bill sailed through the Colorado House of Representatives in March, it bogged down in the Senate when lobbyists for the HMO industry had the language changed to “more burdensome” utilization review practices rather than “more restrictive.”

The Colorado Psychiatric Society thought that was too vague and negotiated successfully with lawmakers to have the original language reinstated. The legislature passed the bill last month.

Colorado was not the only state where parity implementation raised issues about fairness. Minnesota enacted legislation in May to close a loophole in its 1995 parity law. An amendment requires managed care companies to use a psychiatrist certified by the American Board of Psychiatry and Neurology and licensed by the state to make the final decision on payment for treating mental illnesses, according to Paula Johnson, deputy director for state relations in APA’s Division of Government Relations.

There are now 32 states with parity laws on the books. With the exception of Rhode Island, none of them addresses the discriminatory utilization review problem, said Johnson. “However, as more states have experience with parity laws, I expect to see more bills like Minnesota’s and Colorado’s.” ▪