Having just attended the National Council for Community Behavioral Healthcare conference in Florida last week, it is clear that the behavioral health field – much like the rest of America – is struggling to make sense of sweeping reforms. While the Mental Health Parity and Addiction Equity Act (MHPAEA) and the related Interim Final Rule (IFR) are slowly being teased apart by health plans, issuers, consumer advocates, regulators and providers, the health insurance of Americans is being reformed on a scale not seen since Medicare was created. What all of this means for the behavioral health care and coverage sectors now amounts to unprecedented change management.

What Changes?

MHPAEA changes many of the business rules we have come to expect between payors and providers. AHP Healthcare Solutions has prepared a comprehensive analysis of the law and IFR (download Special Report by clicking here) that reviews all of the operational dimensions from the standpoint of payers and providers. The most significant changes where parity is concerned include:

• The specific inclusion of substance use disorders, amending the 1996 MHPA that addressed mental health parity only.
• An end to discriminatory financial limitations (co-pays, coinsurance, annual limits, etc.).
• The elimination of separate deductibles for mental health and substance use disorders (MH and SUD).
• The equalization of non-quantitative treatment limitations (NQTLs) like medical management, network application and participation, drug formulary design, and determination of usual, customary and reasonable rates of reimbursement.
• A full stop to the practice of using EAP as a gatekeeper.
• The creation of six benefit classifications, including inpatient, outpatient and emergency room services wherein benefits have to be on a par with the predominant requirements applied to substantially all medical and surgical benefits.
• The provision of out-of-network benefits for MH and USD, where the same benefit is extended to medical/surgical conditions.
• The availability of medical necessity and level of care standards/criteria/guidelines upon request, in instances of adverse determinations and claims payment appeal.

With respect to reform, the most compelling implications will take some time to unfold (between 1 and 5 years), but make no mistake — they will transform the behavioral health field. The highlights for the field include:

• An individual mandate that creates a Health Insurance Exchange where individuals can obtain subsidized coverage that includes MH and SUD parity.
• Minimum benefit requirements across all insurances that include MH and SUD.
• An employer mandate that points small employers to the Health Insurance Exchange where MHPAEA applies to small group plans.

These three facets of reform will extend parity in MH and SUD benefits to tens of millions of Americans, covering the gaps left behind by MHPAEA (where it applied to groups of over 50 employees). Other highlights include:

• The prohibition of exclusions based on pre-existing conditions. This is a particularly important aspect of reform as MH and SUD conditions have long been considered pre-existing conditions. Fear of losing one’s coverage has led many people (as many as two-thirds of those who suffer from treatable illnesses) to forgo treatment. This trend will eventually reverse itself and people will feel confident seeking early intervention and treatment before conditions become life-threatening.
• Established network adequacy standards which, when combined with MHPAEA’s non-quantitative treatment limitations, will help meet serious access gaps in the behavioral health field.
• Required coverage of dependents until age 27, which will help young people suffering from MH and SUD conditions obtain treatment earlier, thereby saving lives and restoring productivity.
• Required first-dollar coverage of preventive services (to be determined by a special task force).

The most striking aspect of these reforms is the eventual movement of more than 30 million uninsured Americans to either individual, small group or Medicaid coverage. Sadly, nearly 20 million Americans will remain uninsured, but the migration of 30 million people out of publicly-funded indigent programs will create massive new opportunities (as witnessed by the surge of managed care stocks today) and will leave many publicly-funded programs such as the Block Grants vulnerable to reallocation.

The message for providers is loud and clear: If you are not contracting with health plans and managed care today, you should make it your highest priority through 2013 to do so. If you are serving a majority indigent and uninsured population, expect major changes in that population.

There are many other implications for providers, all of which are reviewed at length in the Special Report: An Analysis of MHPAEA.