Mental Health Parity Loopholes
While the national mental health parity law takes effect on January 1, 2010, it does not trump existing state laws that mandate that mental disorder diagnoses are treated and covered equally as their physical health brethren. If you are covered by health insurance, come January 1, your mental health treatment cannot be any more limited than your physical health coverage. California is one such state that has had such a mental health parity law on the books since 2000, so we have nine years of lessons from that state.
Recently, a study was released that examined how the law affected people who sought out mental health treatment. Shari Roan with the Los Angeles Times has the coverage. The study, conducted by Mathematica Policy Research and the Substance Abuse and Mental Health Services Administration, looked at data from 2000 to 2005 and found some things in line with expectations:
- “Costs associated with parity were in line with, or even below, the projections.”
This is not surprising, given that projections are usually based upon real-world scenarios of how mental health care is delivered and paid for.
- “Most health plans responded to the parity law by lifting limits on the annual number of days allowed for inpatient treatments and the number of visits allowed for outpatient treatment.”
Indeed, since it is mandated by the law, health insurance companies had little choice but to lift these limits.
- “Consumers also complained about being referred to lists of mental-health providers only to find out that providers on the list were not taking new patients.”
This is a common, continuing problem not only with mental health providers, but general providers under health insurance plans. In fact, it’s one of the most common complaints about health insurance in the U.S.
- “Some doctors reported that they chose a parity diagnosis for a patient in order to ensure insurance coverage although it wasn’t the most accurate diagnosis. Some doctors said they had little flexibility to change a client’s diagnosis if he or she improved because they believed the health plan would then stop providing coverage for continuing care or care for a lesser diagnosis.”
This is nothing new. Mental health treatment providers have been choosing “covered” diagnoses for patients rather than “not-covered” diagnoses for decades (ever since managed care came on the scene). While certainly far from an ideal situation, this is forseeable outcome of having a list of approved versus unapproved and non-reimbursable diagnoses. This will remain a problem with the new law as well.
However, the study also found some things that policy makers may have not expected or planned for:
- “Concerns arose over the use of “medical necessity” clauses to authorize treatments and control costs. Medical necessity is typically defined as the need to supply a service for a condition that could endanger life or cause significant illness, suffering or disability and for which there is no adequate, less costly alternative available.”
This is going to be the newest loophole used by insurance companies to refuse to pay for mental health services provided. You’d think that only your therapist or doctor could determine “medical necessity,” but leave it to insurance companies to make that determination from afar.
- “Health insurance providers felt the list of diagnoses covered under the parity law was arbitrary in excluding certain diagnoses.”
I believe the new parity law covers a wider range of diagnoses, so this should be as serious a concern.
- “Nearly half of Californians polled in focus groups were unaware of the parity law.”
This is an unexpected and unfortunate problem, in that consumers don’t necessarily know what their rights are when it comes to getting treatment that is reimbursable from their health insurer. But it is a problem that is hopefully easily solved through more outreach and education.
Mental health parity is sometimes viewed as a panacea, in that it will suddenly solve a lot of problems regarding the treatment of mental health concerns. That is not likely the case, but what it will do is make it easier for treatment providers like psychologists to see patients for as long as they need to be seen. Assuming that the “medical necessity” isn’t turned into another barrier for continuing mental health treatment, as the California study found.
Read the full article: Mental-health parity laws require oversight
Grohol, J. (2009). Mental Health Parity Loopholes. Psych Central. Retrieved on July 2, 2015, from http://psychcentral.com/blog/archives/2009/12/03/mental-health-parity-loopholes/