CMS Offers States, CHIP and Medicaid MCOs Limited Direction with Respect to Parity

On November 4^th Cindy Mann of the Centers for Medicare and Medicaid Services (CMS) offered a rare glimpse into the guidance and direction plans and providers around the country are anticipating in January. Specifically, her letter was directed to “State Health Officials” responsible for Medicaid and CHIP. Her purpose was to provide some “general guidance” with respect to implementation of section 502 of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), Public Law 111-3, “which imposes mental health and substance use disorder parity requirements” on all CHIP  plans. Essentially section 502 was designed to amend section 2103-c of the Act to include provisions of the Wellstone-Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Impact of MHPAEA on Medicaid – MCOs and PIHPs Only

Parity impacts Medicaid “only insofar as a State’s Medicaid agency contracts with one or more managed care organizations (MCO) or Prepaid Inpatient Health Plan (PIHP). It’s the MCOs and PIHPs that must comply with the law. To be crystal clear: Parity does not apply to Medicaid if and when a State does not use an MCO or PIHP to provide and manage those benefits.

Impact on CHIP – All CHIPs

Parity applies more broadly to the entirety of the State CHIP program whether it’s managed by an MCO or not. However, section 502 of CHIPRA also “specifies that State CHIP plans are deemed to satisfy (Parity) if they provide coverage of Early and Periodic Screening Diagnostic and Treatment (EPSDT) benefits.” That’s a significant clause.

Next Steps for States

States wondering where and how they might begin to address the impact of Parity can start off in some effective and efficient directions despite the lack of guidance and regulations:

1. Talk to states that are further ahead on the learning curve in the spirit of a collaborative learning environment
2. Evaluate MCO and PIHP agreements for risks, incentives and performance guarantees
3. Review plans in a side-by-side comparison and conduct a gap analysis to determine if Medicaid carve-out and/or CHIP plans are more or less restrictive
4. Specifically review impact of Serious Emotional Disturbance (SED) and Substance Use Disorder (SUD) provisions on plan design and MCO/PIHP agreements
5. Evaluate provider network
6. Establish and/or confirm coverage rules for diagnoses, services and provider types
7. Configure reimbursement/fee schedules accordingly
8. Reconsider the treatment of co-morbid conditions and chronic illnesses involving mental health and substance use disorders. Leveraging and integrating primary care is low-hanging fruit and totally consistent with Patient-Centered Medical Home models

States and their MCOs will need to evaluate just how the Out-of-Network (OON) provision will affect their plans as well. Some people believe that rich OON coverage will create a reverse incentive and drive some providers out of preferred provider networks where they can more than likely make more money.

Reform – the Tsunami

Notably, should one version of reform or another extend Medicaid coverage to millions more people by pushing the envelope on Poverty Level, the sheer numbers of people to come through the doors of CHIP and Medicaid providers (under MCO and/or PIHP contract) may burst the dam in terms of workforce shortages and access issues.