Mental Health Parity Law Meets “Crafty” Insurers: Where’s the Enforcement?

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August 3, 2015; Vox (Kaiser Health News)

When the Mental Health Parity Act finally passed in 2008, most advocates were realistic about its possible impact, understanding that almost any positive effect would be dependent on enforcement. The act was meant to eliminate the higher copayments and deductibles imposed on those seeking treatment for mental rather than physical illnesses and rectify their more limited access to treatment. Indeed, as this article suggests, it’s now harder to point to outright violations of those provisions, but insurers have managed to creatively erect new types of slightly less obvious barriers.

Henry Harbin, Maryland’s former mental health director, said the lack of oversight is being exploited by insurers. “They can micromanage care down to almost nothing,” he says. “The enforcement in this area is a joke.”

One favorite dodge, according to a survey of patients by the National Alliance on Mental Illness (NAMI), is to designate treatment as “not medically necessary,” which reportedly now happens twice as often for mental health as for other medical conditions.

“‘Medical necessity’ is the insurers’ last hurrah,” said Meiram Bendat, an attorney focusing on mental health cases. “Insurers have become much more crafty at coming up with protocols that are not expressed numerically, that are more difficult to spot.”

Additionally, no one federal agency oversees the implementation of mental health parity. Those responsibilities are divided among a complex web of groups that includes the Departments of Labor, Health and Human Services, and Treasury, as well as state insurance commissioners. This leaves most not knowing where they might get help, and even when they do reach out, their attempts are often easily foiled by insurers. The Parity Implementation Coalition in Washington, D.C., says that though its hotline has received hundreds of consumer complaints, it has a hard time following up because insurers refuse to release documents that would allow comparisons to be made between mental health and other health-related claims.

Meanwhile, Clare Krusing of the insurers’ association insisted that such documents are being made available to patients and providers upon request. “Plans are committed to being transparent about their coverage decisions,” she said. Decisions to deny treatment, she said, are based on ensuring that patients receive care based on the best medical evidence.

“We are still at a point in the health system where patients face wide variation in the type of care they’re receiving,” she said. “Oftentimes we see tests and procedures done that are costly and unnecessary for the type of care that they’re seeking or even help or benefit their condition.”

By most accounts, with limited oversight and no enforcement, the law does not have teeth sharp enough or monitoring systematic enough to deter insurers who wish to avoid paying claims. In fact, to date the federal government has not taken a single public enforcement action and only a few states are monitoring insurers for compliance.

Some advocates accuse President Obama of ignoring enforcement for fear of upsetting allies. “Insurance companies were part of the coalition that helped bring the ACA to life, and the administration feels an enormous debt of gratitude,” said former congressman Patrick Kennedy, who helped pass the Parity Law. “It’s a challenge politically to then step on the toes of those that brought them to the dance.”

An estimated 43 million Americans ages 18 or older reported having a mental illness in 2013, but fewer than half successfully accessed treatment, in part due to affordability.—Ruth McCambridge