Costly Impact of CMS’ Mental Health Parity Rule on Medicaid
By - Expensive treatment for a mental health or substance use disorder often means imposed limitations in insurance coverage. Medicaid programs may soon carry the burden of alleviating such costs.
The Centers for Medicare & Medicaid Services (CMS) recently announced a proposed rule to enable low-income beneficiaries advanced access to both mental health and substance use disorder benefits through either the managed care organization or another service delivery system.
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits discriminatory practices that restrict insurance coverage for behavioral health treatment and services and requires insurance plans cover such services accordingly.
CMS’ proposed rule applies MHPAEA to Medicaid. The proposed rule’s goal directly mirrors the final MHPAEA regulation’s approach of maintaining consistency between commercial and Medicaid markets.
States currently exercise an option to provide services through a managed care delivery mechanism via means that are separate from Medicaid managed organizations. Such means include prepaid inpatient health plans or prepaid ambulatory health plans.
Under CMS’ proposed rule, this level of fluidity for states identifying different delivery systems for beneficiaries’ Medicaid services is maintained. CMS reports states mandatorily include contract provisions requiring adherence to parity requirements in applicable contracts for Medicaid managed care arrangements. Such actions will ensure those individuals enrolled in a Medicaid managed care organization receive an advantageous parity in services, says CMS.
Regarding provisions for states with Medicaid alternative benefit plans, states delivering Alternative Benefits Plan (ABP) services via a non-Medicaid managed care organization must comply with requirements similar to when services are delivered through a managed care organization.
The proposed rule also promotes mainstreamed consistency by hindering partiality between beneficiaries with mental health or substance use disorder conditions in the commercial market, Medicaid, and Children’s Health Insurance Program (CHIP).
The act allows access to mental health and substance use disorder benefits that will be less restrictive than those for medical and surgical services, confirms CMS.
The proposal applies to specific provisions of the Addiction Equity Act of 2008 to Medicaid. It wholly applies to CHIP for both fee-for-service and managed care. It is also partially applicable to the Mental Health Parity Act of 1996, implemented to mandate parity in aggregate lifetime and annual dollar limits for mental health, medical, and surgical benefits.
A primary objective of the proposed rule is to advance equity regarding how mental health and substance use disorder services are delivered, says Vikki Wachino, Acting Director, Center for Medicaid and CHIP Services.
“Improving quality and access to care impacts the health of our nation,” maintains Wachino. “Whether private insurance, Medicaid, or CHIP, all deserve access to quality mental health services and substance use disorder services.”
Providing quality value-based care as a collective industry involves making information more easily accessible and available.
Under the proposed parity rule, the criteria for conclusions deemed medically necessary in relation to mental health and substance use disorder benefits must be administered by plans as a beneficiary and/or contract provider requests. Additionally, the proposed parity rule allows an enrollee access to a state’s information regarding a reason for denial of reimbursement or payment for services for mental health and substance use disorder benefits.
CMS’ release of the aforementioned draft regulations “is an important step in an ongoing conversation about how best to integrate behavioral health treatment into the rest of the health care system,” the National Association of Medicaid Directors (NAMD) says in a responding statement.
According to NAMD, the draft regulation highlights earlier state level efforts to actively integrate care for those with behavioral health needs.
“Medicaid programs are increasingly turning to improving the delivery system, through managed care, [Accountable Care Organizations] ACOs, patient centered medical homes and a variety of other approaches to better coordinate care for people with a variety of health care needs,” confirms NAMD.
NAMD emphasizes the rule may result in supplemental costs for Medicaid programs. NAMD confirms that nearly one third of Medicaid dollars is spent on individuals with behavioral health needs. “While it is hard to know what the bottom line impact of this will ultimately be,” NAMD explains, “the regulations do assume that this will cost state governments $150 million in the near term.”
NAMD confirms CMS’ proposed rule is one of many roadblocks requiring further addressing to effectively improve access to behavioral health services in Medicaid that “can only be fixed by an act of Congress.”
