APA-backed federal legislation enacted in December 2020 gave the federal government powerful new authority to enforce the law that requires insurers to provide the same access to psychiatric treatment as other medical care for patients they cover. For anyone who’s struggled to find psychiatric care, or has found it too expensive to afford, this law, strengthening mental health parity, is a game-changer.
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What is Parity?
Parity is the general concept that insurance coverage for mental health and substance use disorder (SUD) treatment should be no more restrictive than insurance coverage for any other medical condition. Historically, insurance coverage for mental health and SUD was discriminatory and much more restrictive than for other medical care. The Mental Health Parity and Addiction Equity Act of 2008 made parity the standard for all insurance coverage in America, except for Medicare.
But despite the law’s passage in 2008, many insurers are still not fully in compliance with the law. Numerous state and federal investigations in recent years found many violations—through practices around prior authorization for services, inadequate provider networks, and setting unfair reimbursement rates for psychiatrists, among others.
How Will the New Law Improve the Situation?
The new law, effective now, requires all insurers and group health plans in the country to demonstrate their compliance with the federal parity law’s requirements by providing analyses to state and federal regulators. Otherwise, they risk violating federal law simply by not having the analyses available, which will subject them to fines and public identification.
Specifically, the U.S. Department of Labor must request these analyses any time it receives a complaint about a plan or insurer’s mental health and SUD managed care practices. Regardless of complaints, the Labor Department is required to request at least 20 analyses a year and can ask for them any time. If a plan is out of compliance, the company has 45 days to fix the problem, and if it doesn’t, it has to inform its enrollees within a week. The Department of Labor in turn is required to report to Congress every year on its findings and corrections to problems, including the names of each plan and insurer out of compliance.
In essence, before the new law, the federal government had no tool to ensure parity was being enforced: now, it does.
What Does This Mean for Patients?
For the one in five people who have SUD or psychiatric disorders, access to care can be a life-or-death issue. In the past, patients seeking needed mental health and SUD care often found that their insurance plan wouldn’t approve it, and even if regulators were investigating the insurance plan for violations, it took months or years to get a resolution. Now, regulators can ask for proof of compliance, get it right away, and fix problems promptly.
If patients run into problems with their coverage, they can call their regional Department of Labor offices and the Labor Department is required to request the analyses from their plan.
What Does This Mean for Psychiatrists?
Psychiatrists have long dealt with the consequences of discriminatory insurance coverage for mental health and SUD treatment. The most obvious manifestation has been reimbursement rates that are far lower than those paid to their physician peers in other specialties.
Now that the Department of Labor will perform parity compliance investigations, it will be easier and faster for regulators to spot and correct the parity violations that psychiatrists face on a daily basis. If psychiatrists spot parity violations, they can work with their patients to file a complaint, or they can work with APA staff who will reach out to the Department of Labor or the relevant state regulator.
A Brief History of the Law & APA
APA, while applauding the passage of the 2008 parity law, recognized over time that states were struggling to properly enforce parity and didn’t have the authority to enforce for people in the largest part of the insurance market (ERISA plans). In 2018, APA and the Kennedy Forum created model state legislation similar to what ultimately passed in Congress. However, passing model legislation in all 50 states can be a long and arduous process, and states didn’t have jurisdiction over every type of plan.
In late 2018, APA staff created a draft of federal legislation that would eventually require plans and issuers to demonstrate, by conducting an analysis of their plan benefits, that they were in compliance with parity. Among the highlights of that legislation’s two-year path to passage were:
- The recruitment and involvement of legislative champions like: Senator Chris Murphy (D-CT) and Senator Bill Cassidy (R-LA), Representative Katie Porter (D-CA) and Representative Gus Bilirakis (R-FL).
- Parity was the top topic of APA’s spring 2019 Federal Advocacy Conference in Washington, where more than 100 APA members impressed upon senators and representatives the need for such a law.
- In late June of 2020, APA President Dr. Jeffrey Geller testified before the House Energy and Commerce Committee in a hearing on mental health. His testimony included a clear focus on parity, opening another avenue for the bill’s passage in a year when Congress faced the pandemic.
Ultimately, at the end of 2020, APA worked to ensure that parity was included in the end-of-year funding package and it passed both chambers of Congress as part of the Consolidated Appropriations Act, 2021, and was signed into law on Dec. 27. APA’s signature legislative effort was rewarded with new federal parity requirements that apply to every health insurer and every group health plan in America.
See more on APA advocacy.