Massachusetts expands mental health parity

Massachusetts expands mental health parity
(October 2009 Issue)

By Nan Shnitzler

Massachusetts' expanded mental health parity law that went into effect July 1 adds four disorders to the list of nine "biologically-based" disorders that were covered under the first parity law nearly a decade ago. Now residents who suffer from eating disorders, posttraumatic stress disorder (PTSD), substance abuse and autism should face fewer barriers to treatment.

"We're thrilled with this victory now that these four diagnoses left out of the 2000 law have been rightfully added back into the insurance mix," says Tobias Fisher, MBA, MSW, policy director for NAMI-Massachusetts. "It's a moral victory at a negligible cost."

While insurers and employers fear that mental health parity will add to healthcare spending, research shows that parity will add less than one percent to net healthcare costs, Fisher says. The law requires private insurance plans to cover the costs of diagnosing and treating mental disorders to the same extent they cover physical disorders, including co-pays, deductibles, periodic service limits and maximums.

The law applies to health plans that are licensed or regulated by the state. Self-funded plans, typically offered by large employers, as well as Medicare, Medicaid and Veterans Health Administration plans are not subject to state law. About 60 percent of insured individuals have plans that are governed by parity law, according to Marylou Sudders, MSW, ACSW, DHL, president of Mass. Society for the Prevention of Cruelty to Children and a former state mental health commissioner.

Joseph Spinazzola, Ph.D., executive director of the Trauma Center at Justice Resource Institute in Brookline sees expanded parity as an important step for those with PTSD, but takes a wait-and-see attitude.

"We're eager to see if it translates into tangible access to services and an adequate number of sessions," Spinazzola says. "Parity laws ostensibly enhance quality of care yet financial pressures have led to the state eliminating some programs that cater to this population."

Edward R. Shapiro, M.D., CEO and medical director of the Austen Riggs Center, a private psychiatric facility in Stockbridge, says parity applies to about one-third of the center's patients and anticipates it will be a welcome relief to them, "particularly these days."

Parity notwithstanding, he says enlightened health plans that recognize sustained, definitive treatment are more cost effective than frequent, short-term hospital stays. They've been willing to make exceptions to treatment limits, to the benefit of all involved.

Perhaps most importantly, he says, parity is part of a powerful effort to destigmatize mental illness. "The change in insurance is a social acknowledgment that psychiatric illness is a medical problem," Shapiro says.

Walden Behavioral Care in Waltham specializes in eating disorders. So far, expanded parity has not produced more business, says Stuart Koman, Ph.D., president and CEO.

"While parity does have a potential effect of opening things up, services are still subject to medical necessity, a key issue," Koman says.

Each insurance company maintains its own medical necessity criteria. For eating disorders, for example, there are stringent body weight limits that even very ill patients might not meet, Koman says. It's even more difficult to get approval for obesity.

"That's a whole idea insurance companies don't want to touch," Koman says; however, treatment does get approved on a case-by-case basis.

Koman tends to provide treatment in the patient's best interest and then appeal to the insurance carrier if a claim is denied.

"We continue to talk with them about coverage for our patients. We try to do so as collegially as possible," Koman says. "Most of the time that works, but not always."

Fisher says NAMI keeps a close eye on medical necessity so "it's not used inappropriately to screen folks who should be treated."

There are medical necessity criteria for physical health conditions, too, Sudders says. However, she does advocate appealing if a clinician feels medical necessity has been inappropriately applied. Most appeals come out in the patient's favor, she says.

"Every time there's a change or improvement in insurance coverage, patients and practitioners worry that commercial insurance will ratchet medical necessity up or micromanage utilization of the benefit," Sudders says. "That's a barrier that shouldn't exist and why I always encourage an appeal."

The new federal parity law due to go into effect Jan. 1, 2010 will also require health plans that cover mental health to provide coverage on par with that offered for physical illnesses. While Massachusetts' law is broader, the federal law will help give it some teeth, Sudders says.

"If some policy maker ever attempted to repeal mental health parity in Massachusetts, you have this federal law that would nullify such actions," Sudders says.