Is Parity Possible?
The Mental Health Parity Act was signed into law in September 1996. It states that services treating mental and substance abuse disorders and medical-surgical conditions must be the same, including coinsurance, co-payments and limits on days and visits.
New Questions Arise
There is quite a bit of controversy about whether parity is possible and how it can even be measured. Its implementation and interpretation have been less than consistent. Forty-nine states and the District of Columbia have mental health parity laws, but they are wide-ranging. Some states require insurers to provide coverage for mental illnesses and substance abuse in the same manner as for physician diseases in disorders, while others merely require plans to offer policyholders an option to purchase additional mental health coverage.
Recently, a U.S. appeals court ruled that an anorexic woman’s insurance company must pay for her treatment at a residential facility. The ruling may have important implications for how insurance companies pay for treatment for patients with mental illnesses in states with strong mental health parity laws.
Blue Shield of California told her that residential treatment wasn’t covered under her plan, but that hospitalization would be covered if it was medically necessary. Her doctors determined that an inpatient treatment facility would provide the most effective treatment.
Some doctors who treat eating disorders say that hospitalization, which is typically covered, might stabilize a patient and restore weight but does not generally treat the underlying psychological issues. Outpatient treatment, which might also be covered, does provide counseling but does not provide the 24/7 benefit of residential treatment.
Residential treatment can cost from hundreds of dollars to well over $1,000 a day, and patients often stay much longer in these centers than in hospitals. Some insurers say that there is no treatment for physical illnesses that is comparable to residential treatment for mental illnesses; hence residential treatment should not have to be paid for under parity laws.
However, the Ninth Circuit Appeals judges, based in San Francisco, ruled that residential treatment was medically necessary for eating disorders and had to be covered under the California’s parity law, even if no exact equivalent existed on the physical disease side.
Research shows that parity need not result in significantly higher costs when care is managed. Parity also applies to the management of care. Nevertheless, national policy recognizes that mental and addictive disorders are not a single disease that can be treated homogenously. National regulations require that care management procedures be based on the same processes, standards and expert opinion for all conditions. This allows health plans to recognize meaningful differences between illnesses and act on those by applying the same decision processes across the board.
Clinical guidelines on eating disorders shows that most cases can be successfully managed on an outpatient basis but some people require care in an inpatient or residential setting. The most appropriate setting depends on the specifics of each case.
Health insurance covers a large number of treatments for many illnesses and conditions. The Mental Health Parity Act strives for a fair approach to assigning treatment resources, so that a patient is not at a disadvantage because he or she was stricken with a mental illness, like an eating disorder. But the debate will surely continue as the Affordable Health Act continues to be rolled out and healthcare reform manifests in more and more states, as the question of higher premiums and whether these mental health treatments are affecting them, and as the ambiguous nature of mental health treatment plans come more and more to the forefront.