Mental health ‘carve-outs’ sue to block parity

By Paula E. Hartman-Stein, Ph.D.
May 1, 2010 - Last updated: May 31, 2011

A group of insurance interests have filed suit in the U.S. District Court for the District of Columbia seeking to block rules adopted to enforce the federal parity law.

Mental health advocates say the court action demonstrates that the struggle for parity between health and mental health insurance coverage is far from over despite the October 2008 victory in Congress with passage of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act.

The Coalition for Parity, a group of managed behavioral healthcare organizations (MBHOs) that manage behavioral health care benefits on behalf of group health plans, is attempting to block parity rules slated to go into effect in July.

On April 1, District Judge Colleen Kollar-Kotelly denied a request from the coalition for a temporary restraining order to prohibit implementation of regulations for enforcing the parity provisions of the act.

The coalition filed the action against defendants Kathleen Sebelius, secretary of Health and Human Services, and the secretaries of labor and the treasury alleging it would be “irreparably injured because the Interim Final Rules that went into effect on April 5th impose substantive regulations that will directly impact MBHOs.”

The government argued that the effective date of the interim final rules, April 5, 2010, gave the insurers a three-month period to become compliant with the new regulations.

The coalition agreed at the hearing that if the interim rules were not binding until July, there was no immediate irreparable harm to justify a restraining order. At press time the judge had not yet ruled on the coalition’s request for a temporary injunction to implementation of the final rules for the parity bill.

According to a letter circulated on the Internet from Sheree Kruckenberg, vice president for behavioral health with the California Hospital Association, if the coalition is ultimately successful in its lawsuit, the federal agencies would have to retract their final rules and instead issue a rule that includes a standard 60-day notice and comment period. The federal agencies would be required to give consideration to any comments received from the general public.

Nick Cummings, Ph.D., former president of the APA, said, “These latest maneuvers only underscore the fact that health care reform must be addressed through economic measures, as it cannot be legislated.” He pointed to the previous enactment of parity laws in 44 states and the federal government.

“In each case the insurance industry got around them either by invoking more draconian hurdles for mental health as opposed to physical health or by dropping mental health altogether.”

For effective health care solutions, Cummings said that foremost is the need for outreach to the high utilizers of medical/surgical services that translate emotional and psychological issues into baffling physical symptoms that the system spends enormous amounts of health care dollars trying to treat medically.

According to Cummings, because only a minority of these high utilizers ever follows through on mental health treatment, if behaviorally trained psychologists are co-located in the primary care setting and working side by side with primary care physicians who can make a “hallway handoff” to the trained clinician, 85 percent to 90 percent of these patients will go into treatment, thus reducing medical/surgical costs by 15 percent.

“If this were incorporated nationally into health care, a 15 percent annual savings in medical dollars exceeds the entire mental health/substance abuse budget of the U.S.,” Cummings said.

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