Insurance Coverage of Mental Health and Substance Use Disorder Patients Under the Mental Health Parity Law

The following information is provided by the Pennsylvania Department of Military and Veterans Affairs and the Pennsylvania Insurance Department and is designed to outline the provision of coverage under the Mental Health Parity and Addiction Equity Act (the parity law).

The law requires health plans that cover mental health and substance use disorders (MH/SUD) to cover those services “in parity” with the coverage of other medical and surgical benefits. That means many details of the plan – such as cost-sharing, limits on number of visits, and non-numerical treatment limits – may not be more restrictive than for most other medical and surgical benefits (i.e., there must be equivalence in cost-sharing and visit limits).

Non-numerical treatment limits include things such as preauthorization and medical necessity determinations. These treatment limits cannot be more stringently applied to MH/SUD conditions. TRICARE does not apply such treatment limits.

What health plans are subject to the parity law?

• Most employer health plans, including all large employer health plans (over 50 employees) and most small employer health plans (those that are sold directly by the insurance company).
• Most individual market health insurance plans (including those sold through Pennie™ – Pennsylvania’s health insurance marketplace – and most of those purchased directly from an insurer or broker).
• Medicaid (Medical Assistance or Health Choices) and CHIP (Children’s Health Insurance Program).
• While we recognize that a significant number of veterans may be privately insured, please be advised that even while TRICARE is exempt from the parity law, Department of Defense regulations require mental health and substance use disorder coverage under TRICARE to be in parity with medical/surgical coverage.

What are some of the signs that may indicate a violation of the parity law?

The state and federal agencies that oversee the parity law would need to investigate the plan to determine if there is an actual violation, but the following are red flags indicating a potential parity issue:

1. Cost-sharing or visit limits:
   • Copays, coinsurance or deductibles applied to coverage of mental health or SUD conditions are higher than those that are applied to other medical conditions.
   • The plan applies limits on the number of visits or inpatient treatment days for MH/SUD but does not have similar limits on most treatments for other medical or surgical
   • A separate deductible or maximum out-of-pocket applies to mental health and
2. Preauthorization requirements: For example, a plan authorizes only 3 days of hospitalization at a time for MH/SUD treatments but preauthorizes 7 days at a time for treatment of other medical or surgical. A plan requires preauthorization for most or all MH/SUD treatment (including prescription drugs), but seldom requires preauthorization for other medical or surgical conditions.
3. Medical necessity:
   • Claims are denied for MH or SUD treatment because the plan determines the services are not medically necessary more often than claim are denied for other medical or surgical conditions – for example, a plan routinely denies provider recommendations for inpatient care in a residential treatment facility or requests for intensive outpatient
   • The plan requires the patient to “fail first” (step therapy) at less expensive treatments for mental health or SUD conditions but does not impose the same requirement on most other medical or surgical treatments.
   • A plan’s medical necessity standard or reasons for claim denials are not available in writing to patients and providers upon request.
4. Network requirements or lack of in-patient providers:
   • Requirements for MH or SUD providers to join a plan’s network exceed those for other medical providers.
   • The available number of MH or SUD providers is not as extensive as the network of other medical providers, even though mental health providers are available in the
   • Patients don’t have access to mental health and/or SUD providers that are reasonably close to where they live or that are accepting new patients.
   • The health plan’s reimbursement of mental health/SUD providers is significantly lower than market rates when compared to how other medical or surgical providers are

How can you assist your patient if you suspect a parity law violation?

You can assist your patients by informing them of these coverage standards for their MH and SUD services. If their benefits under a plan are reduced or denied, you may assist with an appeal.

You can encourage or assist your patient to take the following actions when benefits are reduced, or a claim is denied:

Appeal

• The patient can file an appeal. An general explanation of appeal procedures for private health insurance can be found on HealthCare.gov.
• Appeal rights must also be described in a notice sent or delivered by the The provider can assist in an appeal by describing the reasons why the prescribed treatment is necessary.
• Assist the patient with reviewing their plan documents to determine the time limits for filing an appeal. Timelines for filing urgent appeals are much shorter (i.e., 72 hours) with a quick turnaround for a decision.

File a Complaint

• • If you have concerns about a health plan’s coverage of MH/SUD benefits, then you or your patient may submit a complaint with the appropriate government agency. You or your patient may request documentation from the plan to obtain the basis for a denial or for more information on the benefits.
    • The federal agencies that are charged with enforcing the parity law have issued guidance on requesting documentation from a plan with a request template.
  • If you suspect a parity law violation or if you file an appeal with the health plan, you or your patient may contact the Pennsylvania Insurance Department (PIO) and file a formal complaint, if appropriate.
    • PIO will investigate the complaint and work to resolve the complaint, if appropriate.
    • PIO can be reached at 1-877-881-6388 or online.

If for any reason review of the plan is outside of PlD’s jurisdiction, they may provide the contact information of the appropriate state or federal agency that has jurisdiction over the For example, there may be a different process to appeal a Medicaid denial.

In Summary

The isolation experienced by many during this pandemic underscore the importance of parity as we collectively aim to meet the increased demands placed on our mental health care system. A core component of suicide prevention is seeking care for any mental health concerns. Suicide Prevention efforts stand out as once such example for both the population at large but especially for veterans and their family members.

To connect with our veteran community, and or if you’re a veteran yourself, please connect with us on PAVET Connect.