High Stakes: The Mental Health Parity Proposed Rule For Medicaid Managed Care

The Mental Health Parity and Addiction Equity Act of 2008 is viewed as a landmark step in improving patients’ access to mental health services. The effort was bolstered in 2010 by the Affordable Care Act. The bottom line: Individual and group insurance plans that choose to offer mental health coverage now must do so at a level equal to that of medical coverage.

But the rollout has been slow. Federal officials didn’t release final rules for employer-based plans and policies offered on the health law’s marketplaces until November 2013. And how the law will affect Medicaid managed care plans that include both medical and mental health benefits is still unclear. Proposed regulations for those plans are being finalized by federal officials and expected to be released sometime this year.

There’s a lot at stake. The regulations from the Centers for Medicare and Medicaid Services will also likely determine the extent to which the law applies to Medicaid managed care “carve-out” mental health plans that are frequently paired with separate medical insurance. In addition, experts suggest the proposed rule could, like the final regs issued for marketplace plans and employer-based coverage, do away with lifetime spending caps and other limitations that aren’t equal to those applied to medical services.

Medicaid is the largest payer of mental health services, covering 27 percent of all mental health spending in the United States, and 11 percent of people with Medicaid have a mental illness, according to the Department of Health and Human Services. Nationwide, 70 percent of Medicaid recipients are enrolled in managed care plans, which are generally designed to reduce costs through improved coordination of primary care that stops unnecessary or inappropriate services. However, these plans also often have lower provider reimbursement rates that can impact physician participation.

Emily Feinstein, the director of health law and policy at the National Center on Addiction and Substance Abuse at Columbia University, has been tracking the parity law’s implementation and works with states on improving mental health and substance abuse care. If mental health and addiction services are not covered at the same level as medical, she says, there is the potential for more emergency room visits and acute care services that might not happen if people with Medicaid managed care plans had access to a weekly counseling and other mental health services.

Kaiser Health News staff writer Lisa Gillespie spoke with her about some of the issues in play and her expectations.  An edited version of the conversation follows.

Q: Why is this rule going to be so important?

A: Parity offers the promise to dramatically improve patients’ access to the full range of evidence-based mental health and addiction treatments, especially for people with more complex health problems. As chronicled by 60 Minutes in the recent segment, “Denied,” claims for intensive behavioral health care services are routinely denied. … The hope is that insurance companies will start to cover mental health and addiction services for people as comprehensively as they cover care for other complex chronic diseases, like diabetes, heart disease or cancer.

Q: What’s an example of something that might change if parity was applied to Medicaid managed care?

A: A big problem right now is Medicaid excluding medications that treat opioid addiction –methadone, buprenorphine and naltrexone. Medicaid coverage for these medications is uneven and even in states that cover them, managed care plans find ways to limit access.  For example, they say you have to fail psychotherapy first before you can get buprenorphine, or that you have to fail first on a cheaper alternative before you can get to the more expensive treatment. Or they require prior authorization, so doctors can’t prescribe the drug right there.  These policies have big consequences. If people can’t get the medication they need, they are at risk of dropping out of treatment and relapsing.  For addiction, the “fail” in fail first means relapse.  And for opioid addiction, relapse can be fatal. These kinds of policies violate the federal parity rule, unless insurance companies apply the same limitations to medical treatments, and we know they don’t.  It’s really a cost containment strategy.  If the parity rule for Medicaid addresses these issues, many more people will be able to access addiction medications, and many lives can be saved.

Q: Where – meaning in what states – might enrollees feel the most impact in terms of new regulations for Medicaid managed care plans?

A: My sense is that there is huge variability among states.  Some states have identified mental health and addiction treatment as a way to improve cost savings [in their Medicaid programs] and health care outcomes, and they’re already trying to improve access to care. Other states, which for political reasons aren’t expanding Medicaid, will have less coverage for addiction and mental health, because they’re not doing everything they can provide care in the first place.

Q: Do you anticipate there will be opposition to such an effort?

A: There is resistance of course from the insurance industry, especially from managed care companies that contract with Medicaid, who are concerned that parity requirements will increase their costs. For providers [such as doctors and hospitals], there are concerns about whether the rule will be clear enough and will provide enough protection when insurance companies deny care, either because the services aren’t covered at all, coverage is limited or because the insurance company claims the services aren’t necessary. Some parts of parity, for example — not imposing higher co-payments or number of visit limitations on behavioral health care — are very clear and easy to implement. Most insurance providers are already in compliance with these requirements. The more challenging issues are “non-quantitative treatment limitations” like the process for medical necessity review [where insurers determine whether or not a service is necessary] -this is where more clarity is needed.

Q: Could access issues increase as a result of the rule? We hear a lot about shortages of mental health providers. How does this play into that discussion?

A: Ensuring that there are enough mental health and addiction treatment providers to meet patient demand will be a big challenge. Federal rules already require Medicaid managed care plans to ensure there are an adequate number of providers in their network, but states are allowed to define what adequate means. The result is huge variation.  And there is little enforcement.  One reason there aren’t enough providers in Medicaid plans is that the reimbursement rates in Medicaid are very low, and providers say they can’t afford to take many Medicaid patients.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

GOP Chairmen Offer Alternative To Health Law

Key GOP chairmen from the Senate and House plan to unveil a blueprint Thursday for repealing the health law and replacing it with a proposal the lawmakers said would reduce health care costs, improve quality and expand coverage.

The measure retains many elements of a proposal Republican Sens. Orrin Hatch of Utah and Richard Burr of North Carolina released a year ago with former Sen. Tom Coburn, R-Okla. That proposal did not get traction, but the senators are pushing it again and now are working with House Energy and Commerce Chairman Fred Upton, R-Mich.

“Our plan allows patients to make health care decisions for themselves – without a maze of mandates, fines and taxes,” Hatch, who chairs the Finance panel, said in a press release. “This plan is achievable, and above all, fiscally sustainable.” Burr heads the Select Committee on Intelligence.

With the GOP controlling both houses of Congress this year, Republicans are continuing their fight against the health law. The House voted Tuesday to repeal it, although Republicans are not expected to garner enough votes to override the veto that President Barack Obama has promised if the bill passes Congress. At the same time, Republicans have stepped up their interest in possible alternatives to the health law. Upton is also part of a House working group that includes Ways and Means Chairman Paul Ryan of Wisconsin and Education and Workforce Chairman John Kline of Minnesota that party leaders have charged to develop an alternative to the health care law.

GOP aides said Wednesday that while there is additional urgency for Republicans to come up with an ACA alternative if the Supreme Court rules later this year to strike down subsidies in federally run health insurance exchanges, the Hatch-Burr-Upton plan could also be a starting point for discussions after Obama leaves office in 2017.

Aides said the next steps for the plan to be released Thursday  include outreach to Senate and House colleagues and to the nation’s governors.

Like last year’s document, the legislative framework would repeal the current law’s requirements on individuals and employers to purchase health care coverage and the option for states to expand Medicaid, the joint federal-state health program for low-income people. It would give states more control of Medicaid, provide tax credits to help people buy health insurance — but only to those who earn up to 300 percent of the poverty threshold, not the 400 percent in the current law — and scrap the law’s new taxes and fees. It would also eliminate the health insurance marketplaces set up under the federal health law and insurers would not be required to cover a specific set of benefits.

Insurers would still be prohibited from imposing lifetime limits on coverage. Plans would be required to offer dependent coverage up to age 26, although a state could opt out of enforcing that provision.

Insurers could charge an older person no more than five times what they charge a younger person — the health law allows insurers to charge older people up to three times more — but states could impose rating rules that were more or less restrictive.

Individuals who maintain continuous coverage for at least 18 months could not be charged more for a pre-existing medical condition, denied coverage or forced to pay a higher premium. The lawmakers envision a one-time open enrollment period in which people could buy coverage regardless of health status or pre-existing conditions, according to a summary of the measure.

As with last year’s proposal, the new framework would keep the health law’s Medicare provider payment cuts but not use the program as a “piggybank to pay for new programs,” a reference to Republican complaints about Medicare funding cuts in the health law, including payment reductions to the Medicare Advantage program, which are being used to pay for expanded coverage, among other things. Instead the money would be used for the Medicare program, aides said.

Aides said that differences from last year’s draft include changes in malpractice reforms, provisions allowing insurance to be sold across state lines and a cap on the tax exclusions for workers who get coverage through an employer-supplied plan at $12,000 for an individual plan and at $30,000 for family coverage. Any coverage over those thresholds would be taxed at the individual’s tax rate. The health law’s “Cadillac Tax”  assesses a 40 percent excise tax on plans costing more than $10,200 for an individual and $27,500 for a family.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Measles Outbreak Sparks Bid To Strengthen Calif. Vaccine Law

State lawmakers in California introduced legislation Wednesday that would require children to be fully vaccinated before going to school, a response to a measles outbreak that started in Southern California and has reached 107 cases in 14 states.

California is one of 19 states that allows parents to enroll their children in school unvaccinated through a “personal belief exemption” to public health laws. The outbreak of measles that began in December in Anaheim’s Disneyland amusement park has spread more quickly in communities where many parents claim the exemption.

State Sens. Dr. Richard Pan and Ben Allen have proposed eliminating the personal belief exemption altogether in California.

“Every year that goes by we are adding to the number of unvaccinated people and so that’s putting everyone at greater risk,” said Pan, who is also a pediatrician. “We shouldn’t have to wait until someone sickens and dies to act.”

The exemption isn’t new — it’s been around since the 1960s. But the number of parents taking the exemption went way up in the past decade. In some schools in California, more than half of children have an exemption.

If their law, all of those children would be required to get fully vaccinated in order to go to school. Pan says the most parents in the state would support that.

“People are speaking out, and they are calling my office and saying, ‘Please help us by getting children immunized, so my children can be safe,’” he said.

Dorit Reiss, a law professor at the University of California-Hastings in San Francisco,  supports adding further restrictions to personal belief exemptions, but she worries that the bill may go too far. She says a small minority of parents, who remain anti-vaccine despite the scientific evidence that inoculations are safe and life-preserving, may just try to skirt the new law.

“They’ll fake vaccination by finding a doctor willing to sign something saying the child is vaccinated when he isn’t,” said Reiss.

If a school doesn’t know who isn’t vaccinated, they don’t know who to send home in case there’s an outbreak.

Reiss also worries that some particularly fearful parents might try to “detox” their children after vaccination with methods such as chelation, which has been linked to the deaths of children. Others might choose to homeschool their children.

The legislation will almost certainly face opposition from families who do not want to vaccinate their children. It is not yet clear how likely it is that the bill will pass, but both houses of the California legislature are Democratic, as is Gov. Jerry Brown.

In addition, California’s U.S. Senators Barbara Boxer and Dianne Feinstein, sent a letter Wednesday to California Health and Human Services Secretary Diana Dooley asking that the personal belief exemption be reconsidered.

“While a small number of children cannot be vaccinated due to an underlying medical condition, we believe there should be no such thing as a philosophical or personal belief exemption, since everyone uses public spaces,” Senators Boxer and Feinstein wrote.  “As we have learned in the past month, parents who refuse to vaccinate their children not only put their own family at risk, but they also endanger other families who choose to vaccinate.”

California has already shown a willingness to restrict the personal belief exemption: a law passed in 2013 required parents who want an exemption to first talk with a licensed health care provider about the potential risks.  In 2014, the number of children who enrolled in school with a personal belief exemption to remain unvaccinated dropped by 20 percent.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Medical Debt Still a Problem Under Health Law — Despite Protections

Elizabeth and Britt Harmon struggled for years to have a child, and were thrilled when their son Orin was born in February 2013. But they were unprepared for the medical problems that then upended the Brooksville, Maine couple’s lives.

Orin was born with pulmonary stenosis, a heart condition, and severe asthma.  He required constant care, including frequent trips to the hospital and medications that cost hundreds of dollars. The Harmons had insurance through Britt’s job at a plumbing company, but it covered “maybe half” of their child’s medical expenses, Elizabeth said.

Then, Britt’s employer dropped insurance as a benefit at the end of 2013; he lost his job in June. The family scrambled to find coverage but went three months without any before qualifying in July for MaineCare, Maine’s Medicaid program for low-income people. By then, the Harmons had accumulated thousands of dollars in medical debt, Elizabeth said. They’re still working — with the help of a local non-profit organization — to pay it off.

“I’ve sold furniture out of my own house to try to pay off some of the bills,” she said. “There were so many bills, it was impossible to keep track of everything.”

The federal health law was intended to keep a surprise illness or injury from bankrupting Americans. It authorized states to expand eligibility for Medicaid and created online insurance markets where others without employer coverage can buy plans, with federal subsidies available. When calling for the law’s passage, President Barack Obama declared people shouldn’t “go broke because they get sick.”

In 2013, medical debt was the largest cause of personal bankruptcy – 1.7 million people lived in households experiencing bankruptcy because of health costs. But the law hasn’t eliminated the problem. Many states haven’t expanded Medicaid and even those with insurance can rack up big bills, a problem exacerbated by the growing number of plans with high deductibles.

The health law brought regulations to limit for the first time the cost-sharing in plans. An individual plan sold on an exchange can’t include out-of-pocket costs greater than $6,600. In practice, the average deductible, or portion a consumer must pay before insurance kicks in, varies based on how expensive a plan is. But the regulation still only applies to providers and specialists specified by the plan as “in-network.” The narrower the network, the more vulnerable consumers are to incurring medical debt by visiting unapproved doctors or hospitals.

The health law wasn’t supposed to eliminate health care cost-sharing; on the contrary, people are expected to have “skin in the game.” So there will always be a risk of incurring costs greater than people can afford to pay, said Melissa Jacoby, a professor at the University of North Carolina-Chapel Hill and an expert on debt and credit.

“Some of the forces that were in play prior to the passage of the Affordable Care Act are still in play,” said Mark Rukavina, who founded Community Health Advisors, a group that advises providers on how to comply with federal regulations. Inflation and rising health care costs – especially compared to wages – make care more expensive and weren’t necessarily addressed through the health law.

Still, some numbers suggest a decline in people facing medical debt. About 64 million Americans struggled to pay medical bills in 2014, according to a survey by the Commonwealth Fund – that’s a drop of about 10 million since 2012. Experts have celebrated the decline but cautioned that high-deductible insurance plans could put a damper on those changes.

Of the 64 million the authors said were struggling to pay for care, 38 million – or 59 percent – were insured the whole year.

There’s been some improvement: The same report found 29 percent of the insured had medical debt or difficulty with medical bills, a drop from 33 percent in 2012 – while the pool of insured adults grows larger. But analysts cautioned that, absent a significant change in industry or policy, even this group will likely continue to face the prospect of medical debt.

Deductibles keep growing. Last year, work-sponsored insurance plans had an average deductible of about $1,200 – in 2009, the average deductible was $826. And this year, the silver plans sold through the federal marketplace require people to pay on average more than $2,500 or about $3,500 before they get coverage. Whether it is the higher or lower amount is determined by whether the plan groups medical visits and drug costs in a single deductible or two separate deductibles. Bronze plans, known for being cheaper but less generous, have average deductibles of about $5,300.

“There’s wide acknowledgement in the health care community that high-deductible health plans in general are part of the problem,” said Jessica Curtis, who directs the Hospital Accountability Project at Community Catalyst, a nonprofit group that advocates on behalf of health care consumers.

But there’s no incentive to curb cost-sharing. And insurers have no reason to widen the so-called narrow networks that posed problems for the Harmons, who often needed to travel to Boston for asthma treatments unavailable in rural Maine. They paid for those trips out of pocket until Medicaid relieved them of some bills, Elizabeth Harmon said.

But other bills remained. And if the couple had moved elsewhere to find work, which they considered, they feared the hospital would seize the money made on the sale of their home, Elizabeth said.

“I have a stomach ulcer from stress and not being able to eat,” she said. “I was unable to sleep at night because I was afraid they would put a lien on our house.”

To make ends meet, Britt found work as a lobsterman, and then started an independent plumbing business. Meanwhile, Orin’s health has improved and Elizabeth says doctors say his treatment regimen could soon be scaled back.

Still, their financial worries highlight another continuing concern. Even with the health law in place, efforts to regulate how providers can collect on patient debt remain limited. For instance, hospitals and doctors, Curtis said, can still obtain judgments, garnish paychecks and go after people’s assets, including their homes.

The federal government in December rolled out a rule intended to curb these tactics, requiring that, by 2016, nonprofit hospitals actively publicize financial assistance policies. But since hospitals determine who qualifies for aid, the rule is “like Swiss cheese,” Curtis said.

For-profit hospitals won’t have to comply, and unaffiliated outpatient facilities could remain essentially unregulated in terms of how they collect on debt.

Meanwhile, the federal Consumer Finance Protection Bureau has taken preliminary steps to craft rules on medical debt collection. But those would take time to write, and probably wouldn’t go into effect for more than a year, Wu said.

Meanwhile, families like the Harmons get by – partly in thanks, Elizabeth Harmon said, to the doctors and advocates who helped Orin get the care he needed. His health has improved enough that for the first time, doctors are considering taking him off some medications. Yet the couple continues to seek local aid and charity care to keep their bills in check. “We’re not ahead of the game,’’ Elizabeth said, “but we’re keeping our heads above water.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.