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Biden administration cracks down on payers over mental health coverage



Dive Brief:

  • The Biden administration is looking to force health insurers to come into compliance with a 2008 law that attempted to create coverage parity between mental and physical healthcare, as health plan roadblocks continue to curtail access to mental health services.
  • The HHS and Treasury and Labor departments announced a new proposed rule on Tuesday that requires health insurers to analyze patient outcomes to ensure their benefits are administered equally, including evaluating provider networks and payments to out-of-network providers. The rule would also forbid plans from using more restrictive medical management techniques like prior authorization or narrower networks for mental health and substance use providers than those for other medical providers.
  • Noncompliant plans would have to take remedial action, such as adding more therapists to their networks if patients seek out-of-network care too often. Payers could also face fines.

Dive Insight:

Insurers often make it more difficult to access mental healthcare than physical services. Plans might not have enough therapists in-network, forcing patients to turn to out-of-network providers and leaving them on the hook for high bills.

In other cases, insurers enact prior authorization, requiring patients to get permission before seeking mental health treatment, or denying claims for mental healthcare after the fact.

People with depression or anxiety have almost twice as much annual out-of-pocket spending than those without a mental health diagnosis, according to a Peterson-KFF tracker.

Meanwhile, about three in four insured adults who receive mental healthcare experience insurance problems.

The Mental Health Parity and Addiction Equity Act passed in 2008 was meant to ameliorate unequal access to mental and addiction care in the U.S.

The law mandates that financial requirements and treatment limitations, such as copayments or prior authorization requirements, for mental health or substance use disorder benefits can’t be more restrictive than those for all other medical or surgical benefits.

However, compliance with the law has been poor. A government report published last year found health insurers are still purposefully imposing treatment limitations on mental health and SUD benefits.

MHPAEA has proven difficult to enforce due to jurisdictional and resource challenges. The Department of Labor has primary enforcement jurisdiction over private group health plans, while the CMS has oversight over individual and fully insured group markets in some states, and over non-federal governmental plans in all states. Meanwhile, state insurance departments regulate the insurance plans that are purchased, whether by an insured group health plan or in the individual market.

States have had trouble enforcing MHPAEA compliance without additional federal support, according to the Georgetown University Health Policy Institute. A GUHPI report from 2022 found certain treatment limits, such as the use of prior authorization, provider reimbursement and formulary design, are especially difficult for state regulators to assess.

The new rule is meant to ensure that payers are providing adequate psychological treatment and investing in their provider networks, while closing loopholes that can compromise access.

Along with requiring plans to analyze their coverage quality and equity, the rule would require a larger number of plans, including non-federal governmental health plans, to comply with MHPAEA, according to the White House’s fact sheet on the rule.

Payers have argued that the country’s problems with mental healthcare access are not due to their coverage limitations, but because of rising mental illnesses tied with a shortage of mental healthcare providers.

More than 20% of U.S. adults have a mental health disorder, according to government data.

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