The term parity means “equal to.” 3 The federal parity law is fundamentally grounded in ensuring equal access to treatment services under both the behavioral health and medical benefits offered by a health plan. Thus, the federal parity law requires that a health plan’s policies and practices to cover behavioral health services cannot be more restrictive than policies and practices for medical or surgical services. The comparisons between behavioral and medical/surgical benefits are made according to the same classifications of benefits, such that:
A parity violation can take many forms. Some policies and practices covered under the parity law are easily measured by a dollar amount or a number; for example, financial requirements such as co-payments or deductibles, and quantitative treatment limits (QTLs) such as day and visit limits. Under the federal parity law, financial requirements and QTLs cannot be more restrictive for behavioral health services than for medical services in the same class of benefits.
Other health plan practices or policies that limit benefits are called non-quantitative treatment limitations (NQTLs) because these limitations cannot be measured by a dollar amount or number. The basic rule is that a health plan cannot impose an NQTL that is not comparable or that is applied more stringently to MH/SUD benefits than to medical/ surgical benefits. Examples of NQTLs include, but are not limited to:
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was passed in 2008 to help individuals who suffer from mental illness and/or addiction by ending discriminatory health care practices directed against those conditions.MHPAEA addresses both the financial and non-financial ways that plans limit access to addiction and mental health care services, more so than plans do for other physical conditions. Individuals with mental illness and/or addiction, their families, professionals in the field and employers all worked together to pass the law.The law does not require a plan to offer mental health and/or substance use disorder (MH/SUD) benefits; however, if the plan chooses to offer these benefits, it must offer MH/SUD benefits that are equal to the medical/surgical benefits. For example, if a plan covered as many appointments as needed with an immunologist, but only covers five appointments with a psychiatrist, this limitation would violate the parity law.
The Affordable Care Act (ACA) expanded the federal parity law’s protections. As a result, qualified health plans (individual and small group health plans offered in and outside the health insurance exchanges) must include MH/SUD benefits as an essential health benefit offered to its customers. Additionally, the benefits offered to the Medicaid expansion population must include MH/SUD benefits.The federal parity law also guarantees new rights to individuals with mental health and substance use disorders that will make coverage rules more transparent and improve the appeals process. In order to preserve these rights, plans are required to:
The answer to this question depends on a few factors, and is not always readily apparent. If your health plan offers insurance coverage in the state-licensed group and individual markets, it is likely that the state has enforcement responsibility. However, if you have insurance through your employer, you may be insured by a self-insured employer. Around half of all health plans in the country are offered through self-insured employers. The federal Department of Labor has primary enforcement authority over these plans. As such, it is important to know which regulatory agency may be responsible for enforcement of the federal parity law for your plan. If you receive your insurance coverage through your employer, ask your benefits representative or a human resources employee if your employer is self-insured. Your state’s department of insurance may also be able to help you with this question.
To be in compliance with the federal parity law, health plans must address a number of issues:
Where there is a similar state parity law or regulation, the federal parity law serves as the minimum requirement. States may enact additional consumer protections beyond the federal parity law that regulators must enforce along with federal requirements. State laws that offer more consumer protections than the federal law are NOT preempted by the federal parity law, meaning that a state law will continue to apply and be enforced.
These parity requirements apply to the following facility types and services:
An appeal is a request that you make to your health plan to reconsider its decision to deny coverage of an item, service, or medication.
A complaint is a grievance filed with entities that oversee your health plan to express dissatisfaction with the behavior or actions of your plan or its representatives.
Submit a complaint to hold insurance companies accountable and help improve oversight of health plan coverage for mental health and addiction services.
A claim is a request for coverage. You or your healthcare provider will usually file a claim to be reimbursed for the costs of treatment or services.
An appeal is a request that you make to your health plan to reconsider its decision to deny coverage of an item, service, or medication. You have the right to ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, your insurance company must speed up this process.
You also have the right to take your appeal to an independent third party for review. This is called external review. External review means that the insurance company no longer gets the final say over whether to pay a claim.
In order for plans to comply with the federal parity law, they are required to do their own parity compliance testing. In terms of NQTLs, plans must demonstrate that “any processes, strategies, evidentiary standards, or other factors used in applying the nonquantitative treatment limitation to MH/SUD benefits in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the limitation with respect to medical surgical/benefits in the classification.”
Questions about insurance coverage often arise when individuals are trying to access mental health/addiction care. Here are some tips that can help you when seeking answers to your insurance-related questions:
When coverage for behavioral health services has been denied, or when behavioral health services have not been paid for at the same level as medical services, there are two types of parity tests to help determine whether a violation has occurred:
1. Quantitative Treatment Limitation (QTL) Test: a parity violation may have occurred in relation to a QTL under one of the following scenarios for each class of benefits:
2. Non-Quantitative Treatment Limitation (NQTL) test: A parity violation may have occurred in relation to an NQTL under one of the following scenarios for each classification of benefits:
In addition, are there any separate treatment limitations applied to the behavioral health benefit that are not applied to the medical/surgical benefit?
It is not unusual for a prior authorization request to be denied. In cases where prior-approval (and resulting payment) is not approved by the plan to cover a test, procedure, treatment services or provider type, it is important to have a working relationship with a customer service representative or case manager at the health plan with whom the patient or authorized representative/provider can talk about the situation. A first step should be to re-submit the request for care or the claim with a copy of the denial letter. The patient may need the treating physician to explain or justify what has been done or is being requested
Sometimes the test or service will only need to be “coded” differently, or the health plan might just need additional information. If questioning or challenging the denial in these ways is not successful, then the patient may need to:
While it is frustrating to have a prior authorization denied, the following tips can help you if you choose to move forward and formally appeal the decision:
Yes, here is a sample health plan coverage checklist:
My health plan coverage is through:
My health plan:
Plan phone number to call if I have a problem: ___________________
My primary care physician is: ____________________
My physician’s phone number is: ____________________
My mental health/addiction provider’s phone number: ____________________
I need prior authorization for: ___________________
I do not need a referral from my primary care physician: Y/N
ORI need a referral from my primary care physician for:
All insured people, whether under medical or behavioral health benefits, have a guaranteed legal right to challenge a coverage denial by a health plan. All plans—including Medicaid managed care plans, private individual and group insurance policies provided in and outside of exchanges and employer sponsored health plans—must provide a process to appeal an adverse determination (denial of coverage) by a health plan. Appeal timelines and deadlines vary. Each insured individual should carefully read appeal instructions enclosed with denial letters and become familiar with their plan’s appeal processes and timelines.
Managed Care Appeals Checklist
The federal parity law and some state laws allow insured individuals or their providers to challenge a coverage determination if the plan does not cover the same level or scope of services for MH/SUDs as the plan covers for medical/surgical conditions. A parity appeal of denied or limited services may be based upon the insurer’s determination that the MH/SUD services requested are not medically necessary or are not a covered service under the benefit plan.
There are a number of types and levels of appeals that an insured individual, attending provider or advocate can utilize, some of which overlap. A good place to start is in the plan’s internal appeals process.
Knowing what the insurance policy will and will not cover prior to a doctor’s appointment, procedure or inpatient admission allows the insured individual to make more informed decisions about their health care. Often, a summary plan description (SPD) and Benefit Booklet are made available to the insured. This information should be offered through the insurance company’s website, an online Exchange or in-house through an employer’s HR department. If you misplaced or cannot find this information, ask your insurance broker, plan representative or human resources personnel who can help you find it.
Here are some common examples of policies and practices that may violate the federal parity law if they are applied more restrictively to behavioral health benefits:
Steps to take if your appeal fails:
Step #1 – Appeal again and again: Most insurance companies must offer and/or support three to four levels of appeals, and each appeal will involve new people, increasing the chance that the insurance company will agree with the proposed care plan.Step #2 – Request an appeal review by an external party: A review by somebody who is not on the insurance company’s staff will be more objective. There may or may not be a charge to you and/or your provider for such a review.
Step #3 – Enlist the help of a consumer assistance program or your employer’s Human Resources Department, if applicable: Your state may have established a Consumer Assistance Program to assist you with health insurance problems, and/or your employer’s Human Resources staff may be available to assist you with benefit problems you encounter.
Step #4 – Send your appeal to your State Insurance Commissioner, Member of Congress and relevant plan accrediting body to ask them to intervene with your insurer.
Limits on the quantity or frequency of treatment.
If a health plan places caps on the number of inpatient days or outpatient behavioral health visits allowed each year, but does not have the same caps on inpatient days or outpatient medical visits, the health plan is likely in violation of the federal parity law. Similarly, if a health plan limits outpatient behavioral health visits to once a week or every other week, but does not limit the frequency of medical outpatient visits, there is likely a parity violation.
More restrictive prior authorization policies for behavioral health.
Many health plans require prior authorization for non-emergency inpatient facility or hospital services, both medical and behavioral health. However, if in practice a health plan’s prior authorization routinely approves up to seven inpatient days for medical services but just three inpatient days for behavioral health inpatient services, the plan is likely in violation of the federal parity law. The parity violation is the result of the health plan applying the prior authorization process more stringently to behavioral health services.
Excessive concurrent review policies.
When a patient is admitted to an inpatient or residential treatment facility or to day treatment, or is in need of long-term outpatient counseling, health plans may periodically review the medical necessity of the treatment in a process known as concurrent review. If health plans require concurrent review too frequently or impose overly burdensome requests on behavioral health care providers as compared with medical care providers to justify continued treatment, the plan may be in violation of the federal parity law.
Step therapy or fail-first protocols:
Sometimes health plans require patients to try and fail at a lower level of care before they will approve a greater benefit. For example, a plan may require patients to try intensive outpatient services or partial hospitalization for behavioral health treatment before they will approve inpatient treatment. The plan is in violation of the federal parity law if it does not have a fail-first requirement in place for obtaining inpatient medical treatment.
In addition, under federal and state laws, health plans must make meaningful disclosures of plan documents and clinical guidelines to enable a parity appeal.
The federal parity law requires that plans use QTLs and NQTLs on behavioral health conditions as imposed on other medical conditions. As a result, to better prepare the appeal, the patient should request the following from the plan:
In most cases, an individual or their authorized representative/provider will initiate the parity appeal through the clinical or administrative appeals system. Adding a parity law compliance challenge to the appeal will require a health plan to provide more disclosure of information, documents and the plan’s parity compliance review and testing.
Expect to provide the following information in your written appeal:
More than 20% of appeals of denials of coverage or reimbursement by health insurers are successful in favor of the covered individual and an even higher number at the external review level. Just because this process can be long and complicated does not mean it is not worth it. Individuals should keep all of the plan’s coverage information and correspondence in a notebook or an online file to help ease the process and organize your appeals materials. Individuals often do not win at the first level of appeal. Success is more likely with ongoing and persistent appeals until all options are exhausted.