The Biden Administration says that it will remove barriers to access and lower out-of-pocket costs for mental health and substance use disorder care. Last month, the Administration issued final rules which impose new requirements on health plans that it asserts will “improve and strengthen access to mental healthcare for 175 million Americans with private health insurance.”
The Mental Health Parity and Addiction Equity Act is a federal law which was passed and signed into law in 2008. The bill’s intent is to prevent health insurers that provide coverage of mental health or substance use disorder care from imposing more restrictions on these benefits than they do other medical benefits.
In practice, this is often not the case. A Milliman report published in 2019 found increasing disparities in provider payments and network adequacy between the physical and mental health realms in spite of the 2008 MHPAE law aimed at achieving parity.
And a Gallup poll released in May of this year showed that most Americans believe mental health is cared for worse than physical health due in part to higher out-of-pocket costs and other access barriers, such as narrower provider networks.
According to the Biden Administration, despite enactment of the 2008 law, too many Americans still struggle to find and afford the care they need. This particularly applies when patients must go out-of-network to obtain medically necessary care.
In studies cited by the Administration, less than 50% of adults with mental illness were able to access care in 2020, while nearly 70% of children cannot receive covered treatment.
The final rules posted by the Administration bolster the existing law with a new set of regulations, with the intention of ensuring that insurance plans make changes when it’s been determined that they’re providing “inadequate access to mental health and substance abuse disorder care.” For this purpose, plans must collect and evaluate data, report to the federal government and take reasonable action, as necessary, to address material differences in access to mental health and substance use disorder care as compared to medical or surgical benefits.
Furthermore, the rules explicitly disallow more restrictive use of utilization management tools, such as prior authorization, than would apply for other medical benefits, such as surgical procedures.
Another problem plaguing mental healthcare is that providers are being insufficiently reimbursed by insurers, which can lead to shortages of qualified therapists and higher out-of-pocket costs for patients as some providers will only accept cash payments. Given the hurdles involved, both financial and otherwise, sometimes patients give up on obtaining care.
How much the final rules will do to improve reimbursement rates is not entirely clear. The federal government is seeking clarification from insurers on out-of-network reimbursement rates for mental healthcare providers. In this context, health plans must conduct comparative analyses to evaluate standards related to who is in the provider network, which out-of-network reimbursement rates apply and what the prior authorization requirements are. But how more transparency will then yield better pay for providers is uncertain.
For many decades, health insurers have erected barriers that make it harder for insured patients to gain access to mental healthcare. Former First Lady, Rosalynn Carter, was a champion of mental health awareness and treatment. Nearly 50 years ago, she began her campaign to remove the stigma of mental health and put it on an equal footing with physical health. Carter cleared a path for reform, which included the landmark 2008 Act on mental health parity. Despite this, physical health is still generally better insured than mental health. The Biden Administration’s final rules aim to clarify and fortify the 2008 Act’s legal protections for patients with mental illness or substance use disorders.
