Parity for addiction treatment and mental health care is the law of the land - in theory - but the execution of that reality has been shaky for years. Today, we’ll examine the existing parity laws on the books today as well upcoming rule change proposals that may boost reimbursement rates and put a stop to prior authorization requirements for behavioral healthcare providers for good.
What are parity laws and what do they have to do with mental and behavioral health?
For years, insurance companies have found ways to limit or eliminate access to addiction treatment and mental health care. Parity laws refer to a collection of legislative attempts made over the course of the last 25 years to force insurance companies to cover mental health and behavioral health care in the same way they cover other medical goods and services. The goal of these laws is to create “parity” or sameness between behavioral health coverage and every other type of healthcare coverage. Despite many different attempts to make parity a reality, most experts agree that a basic inequality persists between addiction treatment coverage, mental health coverage and most other types of healthcare coverage.
What is the Mental Health Parity and Addiction Equity Act?
The Mental Health Parity Act of 1996 (MHPA) is one of the most well known and most influential pieces of legislation to attempt to enact parity for mental healthcare. Among other rules, the MHPA established that large group health plans may not place dollar limits on mental health benefits.
The Mental Health Parity and Addiction Equity Act (MHPAEA) was passed in 2008 explicitly added coverage for addiction treatment to existing MHPA laws. It also made a few other adjustments to the existing MHPA laws concerning which plans may and may not opt out of parity requirements.
Despite these gains, a 2014 poll found that only 4% of Americans are aware of parity laws. The public’s general ignorance of parity laws is likely due to the fact that insurance companies continue to use bureaucratic hoops and other clever limitations to maintain a basic inequality between physical health and behavioral health coverage.
Why do inequalities in behavioral health care access exist despite parity laws?
Inequalities persist because existing parity laws are written in such a way as to create many loopholes - which insurance payers are more than happy to exploit. Despite many attempts to create strong parity laws, under the current status quo insurance companies are still technically “allowed” to:
Require prior authorization for mental health and addiction treatment
Use “medical management techniques” to limit access to SUD and MH care
Maintain intentionally small and restrictive networks of mental health and substance use disorder providers, effectively limiting treatment opportunities
Offer very low out of network reimbursement rates for mental health and behavioral health specifically
Opt out of federal parity laws if they are non-federal government plans
Limit access to MH and SUD care using “Non-Quantitative Treatment Limitations” (NQTLs) that are unique only to behavioral health categories
What will the behavioral health parity law update do, if the rule change passes?
After some speculation, we now know exactly what changes the parity rule change suggests. Fortunately, the parity law update proposal addresses many of the existing loopholes that payers use to elude responsibility for behavioral health care costs. While experts warn that the rule change, if implemented, will not make a huge difference to behavioral healthcare access, it should nudge us further in the direction of true parity between behavioral health and physical health coverage.
Here’s a few of the most important changes proposed in the rule change:
Prohibit payers from requiring prior authorization for routine mental health and behavioral health treatments
Create standards for behavioral health provider network creation and maintenance
Ensure that reimbursement rates are standardized across coverage categories
Ensure that NQTLs are identically applied across the board
Make “opting out” of parity laws more difficult
How will these addiction treatment and mental health parity law updates affect behavioral health businesses?
The proposed rule change was published on 8/3/23 and the public comment period will close after 60 days on 10/2/23, after which a vote will determine the fate of the rule change. If the proposed rule change does pass and become law, behavioral health businesses should see some gains in insurance coverage for services rendered. Eliminating prior authorization requirements and boosting reimbursement rates, in particular, should be a boon to behavioral health providers, who are often bogged down in bureaucratic hoops and subpar reimbursement rates.
Parity laws won’t protect your addiction treatment business from RCM chaos - but Behave Health can help.
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