New rules from Obama administration promise better mental health coverage

From The New York Times:

WASHINGTON — The Obama administration issued new rules on Feb. 29 that promise to improve insurance coverage of mental health care for more than 140 million people insured through their jobs.

In general, under the rules, employers and group health plans cannot provide less coverage for mental health care than for the treatment of physical conditions like cancer and heart disease.

Insurers cannot set higher co-payments and deductibles or stricter limits on treatment for mental illness and addiction disorders. Nor can they establish separate deductibles for mental health care and for the treatment of physical illnesses.

Such disparities are common in the insurance industry. By sweeping away such restrictions, doctors said, the rules will make it easier for people to obtain treatment for a wide range of conditions, including depression, autism, schizophrenia, eating disorders and alcohol and drug abuse.

For decades, many health plans have had limits on hospital inpatient days and outpatient visits for mental health treatments, but not for other types of care.

Kathleen Sebelius (pictured), the secretary of health and human services, said the rules guaranteed that people with debilitating mental disorders would not suffer “needless or arbitrary limits on their care.”

The rules, which take effect on July 1, carry out a 2008 law that was adopted with bipartisan support. They significantly expand the rights of people with mental illness, much of which goes untreated because of insurance restrictions.

Under the rules, insurers can still review claims for “medical necessity,” can still require prior approval of some services and can still charge consumers more for using doctors and hospitals that are not on a list of preferred providers.

But under the rules, insurers cannot use these techniques in a more restrictive way for mental health care than for other medical services.

The administration said the new requirements could increase premiums by four-tenths of 1 percent, or $25.6 billion over 10 years. Businesses with 50 or fewer employees are exempt.

The rules apply to group health insurance plans of the kind typically offered by employers. Federal health officials said the rules did not apply to the individual insurance market, where policies are sold directly to individuals and families. However, some states have laws that apply to the individual market.

Irvin L. Muszynski, a lawyer at the American Psychiatric Association, praised the government’s decision to require a single deductible for mental health and medical-surgical coverage.

“Patients with mental illness often have general medical conditions like diabetes or high blood pressure that require treatment at the same time,” so a combined deductible makes sense, Mr. Muszynski said.

The rules were developed by the Labor Department, the Department of Health and Human Services and the Internal Revenue Service, which share responsibility for their enforcement.

The government said the rules would benefit 111 million people in 446,400 group health plans offered by private employers, and 29 million people in 20,000 plans sponsored by state and local governments.

In the new rules, the government says a health plan would be violating the law if it “imposes an annual $250 deductible on all medical-surgical benefits and a separate annual $250 deductible on all mental health and substance-use disorder benefits.”

The rules say that an insurer may require “prior approval that a course of treatment is medically necessary.” But the insurer cannot enforce this requirement in different ways for medical benefits and mental health services. For patients who receive treatment without prior approval, the penalty must be the same.

A number of companies specialize in managing mental health benefits. The Obama administration said the techniques used by these companies would hold down the cost of complying with the new rules.

But, it said, the standards and techniques used to manage mental health benefits must be comparable to those for other medical care and cannot be applied more stringently.

In a preamble to the rules, the Obama administration said that patients had typically faced higher co-payments for visiting mental health professionals than for visiting primary care physicians.

The rules are likely to reduce this disparity, so more people will be treated by mental health professionals, the administration said. This, in turn, “could lead to more appropriate care and thus better health outcomes,” it said.

The law requiring parity in the coverage of mental and physical illnesses is named for its sponsors, former Senators Paul Wellstone, Democrat of Minnesota, and Pete V. Domenici, Republican of New Mexico.