How does parity affect me?
The Federal Parity Law does NOT require that insurers offer mental health or substance use treatment coverage. The Parity Law also does not address diagnoses. Plans are allowed to decide which diagnoses will be covered in accordance with applicable state law. Some states require that certain diagnosis be covered. Maryland does not require that any specific mental health diagnoses be covered by insurance plans. The Parity Law requires that if an insurer offers ANY mental health or addiction benefits, the coverage must be equal to medical/surgical benefits.
To enforce this, health plans must place all benefits into six areas for comparison purposes:
- In-network, inpatient
- In-network, outpatient
- Out-of-network, inpatient
- Out-of-network, outpatient
- Emergency services
- Prescription drugs
If a health plan has mental health or addiction benefits in ANY of the six areas, it must offer benefits in ALL of the areas where medical or surgical benefits are offered.
Limits on Visits, Days, or Copayments
The parity law does not prohibit insurers from limiting or managing the mental health benefit, but in order to make sure mental health and addiction benefits are equal to medical/surgical benefits, there are specific regulations that address how plans can limit your access to treatment.
These limits include but aren’t limited to:
- Limit on the number of visits you can make in one year
- Limit on the number of days you can stay in the hospital
- Amount of your copayment each time you visit your provider
- Amount of money you pay for each service (testing, prescriptions, etc.)
The law does NOT ALLOW limits for your mental health or addiction treatment benefits that are separate from your medical or surgical treatment. It also does NOT ALLOW any limits on mental health/addiction treatment that are more restrictive than for medical/surgical treatment.
The exact regulatory language which defines the standard for determining any violations in this area is, “Any quantifiable treatment limitation must be no more restrictive than the predominant requirement or limitation that is applied to substantially all medical/surgical benefits.”
For Example: A plan cannot have a limit of five days of inpatient treatment for mental health or addiction treatment if they do not have a limit on the number of inpatient days for medical or surgical care. Many plans have removed blanket visit or day limits in order to comply with the Parity Law.
Other Limits on Treatment
Plans often have other ways they may limit access to care that aren’t as simple as limits on visits or co-payments: How a plan determines if your treatment was medically necessary; if this review is done before, during, or after treatment; the amount of money the plan pays its network providers for specific services; and the number of providers on its in-network panels are examples of these other types of limits called nonquantitative treatment limitations.
The Federal Parity Law addresses these complicated limits by requiring that they be comparable to the medical/surgical limits and no more strictly applied to mental health/addiction benefits.
The exact regulatory language is, “Any nonquantifiable treatment limitation must be comparable and no more stringently applied for mental health/addiction than for medical/surgical benefits.”
Because there are many different types of “nonquantitative treatment limitations,” and they are varied in the way they are applied, it can be difficult to determine whether your insurance plan is violating the parity law, but there are some limitations that the Department of Labor has identified a few that indicate potential red flags.
Appeal and Disclosure Rights
The Federal Parity Law also grants consumers and providers rights not related to limits on treatment. These rights require that insurers provide you with certain information when treatment is denied or coverage changes are made.
- Insurers must disclose the criteria used for medically necessary determinations to consumers and providers upon request and provide an explanation for how it is applied. This is important because many treatment denials are based on this determination.
- Insurers must provide the reason for any denial of treatment in writing and free of charge. The insurer must send this upon denial but also upon request by a provider or consumer.
- If a plan decides to no longer offer mental health or addiction benefits, it must notify members immediately.
Additional Protections for Plans Covered by the Maryland Parity Law
Individual, small group and large group, fully insured plans make up only 30% of plans sold in Maryland. These plans are regulated by Maryland law and the Maryland Insurance Administration and MUST include the following benefits:
- At least 60 days of partial hospitalization
- Outpatient, including office visits and psychological and neurological testing
- May be managed for medical necessity, but that process must comply with the federal parity act
- May not charge a co-payment for methadone treatment for opioid misuse that is more than 50% of the daily cost of this treatment
- Must provide a notice to all members that the plan is covered by the federal parity law and that they member may contact the Maryland Insurance Administration for more details.
10 Things You Should Know About the Mental Health Parity Law
1. Current regulations went into effect in January of 2010.
The Wellstone and Domenici Mental Health Parity and Addiction Equity Act was passed in 2008, but Interim Final Regulations were released in 2010. All insurance plans that are not specifically exempted from the law must now be in compliance.