Defining what is "medically necessary" is a judgment call, and patients may lack access to the criteria insurers use to make coverage decisions.
In recent days, advocates for the mentally ill have cast light on what they call the unfulfilled promise of the federal parity law, the 2008 legislation that was designed to equalize coverage for mental and medical health conditions.
Passed amid much fanfare and then folded into the 2010 Patient Protection and Affordable Care Act (ACA), the law brought much hope that those with mental illness would no longer be denied care.
But reports in recent days of lawsuits by patient families highlight its mixed success: while things like separate deductibles, higher copayments and annual limits on visits have largely faded, managed care finds ways to curtail treatment when there’s a judgment call involved, typically when the insurers must decide what is “medically necessary.”
The lack of transparency over how insurers decide what is “medically necessary” came to light in May, when a report released by the National Alliance on Mental Illness found persons seeking treatment for mental illness were denied coverage at twice the rate of those seeking medical services. While regulators can easily tell if insurers are charging the same copayments or are trying to set a uniform number of annual visits, enforcement becomes harder when state regulators lack access to information on the criteria that guide coverage decisions.
State regulators only have full access to information on the plans under their jurisdiction, as self-funded plans are regulated by the federal government. And one problem with the federal parity law is that enforcement is split among multiple departments: HHS, Labor, and Treasury.
The migration of managed care into Medicaid, and the enrollment surge of persons with mental health issues that has come with the ACA, has brought with it complaints about denials of access. CMS’ massive proposed rule for Medicaid managed care calls for greater transparency, which would presumably include mental health claims.
The challenge, advocates say, is that the mentally ill are those least able to fight with insurers over denials of care, especially when they lack information. That job often falls to families, who become frustrated with the “fail first” phenomenon that is common in mental health coverage—inpatient stays are denied unless outpatient visits don’t work.
Or, when intensive treatment succeeds, it is pulled back just when a patient is getting better. That situation sowed the lawsuit in New York from Michael Kamins: Kaiser Health News reported this week how his 20-year-old son had previously been hospitalized twice for bipolar disorder but was improving under a psychiatrist’s care. Then, the insurer cut the visits back from twice weekly to twice monthly, and the young man became suicidal and violent.
That Kamins filed suit in New York is ironic, since New York and California (where his son lives) are 2 of the few states that advocates say do a relatively good job of trying to enforce parity with the tools they have. New York’s Attorney General, Eric Schneiderman, has reached settlements involving 5 insurers on behalf of more than 4 million residents.
In a report in May to Stateline, former Congressman Patrick Kennedy, who has been treated for mental health and substance abuse disorders and was a sponsor of the 2008 law, said that if New York has uncovered such abuses, “it’s only logical that there are similar practices in other states in the country.”
In interviews, Kennedy ascribed the lack of enforcement to multiple factors. Implementation of parity took a back seat to the huge task of getting the ACA up and running, and there has been some reluctance on the part of federal officials to take on the insurers who were partners in its launch.
While the new Medicaid managed care rule may provide an opening to shed more light into why mental health services are denied, other forces may propel change. The growing problem of opioid prescription drug and heroin abuse is drawing the attention of the nation’s governors, and HHS Secretary Sylvia Mathews Burwell just allocated $100 million in new funds for prevention and treatment.
In addition, the ACA’s call for better care coordination may promote the movement toward collaborative care, a treatment model that puts mental health services within the primary care practice. Because accountable care organizations will have to demonstrate how they are meeting behavioral health needs, interest in this model is increasing.