Lawsuit seeks delay or revision of parity regulations

By Catherine Robertson Souter
July 1st, 2010

The fight for full parity between mental health and physical health care coverage could soon be drawing to a close…or not.

In February, several federal agencies, including the Department of Health and Human Services, released a series of regulations governing how the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) will be implemented. The Interim Final Rules (IFR) would become law for group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010.

However, shortly after the release of those rules, a lawsuit was filed by the Coalition for Parity, which represents several managed behavioral healthcare organizations (MBHOs), hoping to delay and, possibly, revise the regulations before they could be legally enforced.

A petition for a temporary restraining order was denied by the U.S. District Court overseeing the case because the rules do not go into effect until July 1, not April 5 as the plaintiffs argued. The court’s ruling also called for an “expedited briefing schedule” for both parties to take a closer look at the remainder of the coalition’s claims, which include a complaint that the government did not allow for the proper comment time for all parties to express their views on the new rules, as provided for in the Administrative Procedures Act of 1946. That act governs the way federal agencies can implement new laws.

“The coalition and its members advocated for and fully support the parity statute. This lawsuit is about due process,” says Jeff Poston, Esq., an attorney representing the coalition. “The coalition only seeks to participate in the rule making process and provide input to help fashion the best possible regulations and safeguard patient access to quality behavioral health care.”

The coalition has supplied several briefs outlining their concerns about the IFR. Members are waiting for a response from the court as to whether the rules can be revised or delayed in order for all parties to take a closer look.

The Interim Final Rule includes several important regulations, according to Doug Walter, counsel for legislative and regulatory affairs for the American Psychological Association.

“We are very supportive of the IFR as published,” Walter says. “It is good for psychologists because it is good for patients. When you even out the benefits for mental health so that there are not more restrictions than with physical health benefits that means that patients can access mental health care more.”

The rule would ban the use of separate deductibles for mental and physical health, for example.

“If you have a family with someone who needs mental health care,” he adds, “it does pose a barrier to have two deductibles. We hear that from patients quite a bit.”

In the lawsuit, the coalition argues that the single deductible requirement was not a part of the 2008 law and that “this requirement marks a dramatic departure from existing practice in the industry.”

According to the lawsuit, implementing these rules will be a “task of monumental proportion that the departments did not appreciate precisely because they ignored the mandatory notice and comment period prior to issuance of a final rule.”

The rules also restrict insurers from setting higher co-pays for mental health care or stricter limits on hospital stays or outpatient visits. Psychologists and other mental health providers could no longer be listed as “specialists,” explains Walter, but would have the same deductible as primary care doctors.

The most debated part of the rules falls under “nonquantitative treatment limits.” These would regulate those parts of the plan that cannot be quantitatively assessed (like number of visits) and include standards for provider admission to a network, requirements for using lower-cost therapies first, medical management standards and prescription drug formulary design. The coalition alleges that these limits are “ill defined” and “boundless” and will impact their ability to operate cost-effectively.

When asked if these nonquantitative limits were too difficult to define and if they would open the door to lawsuits against the insurers, Walter notes,” The standards are broad and vague on purpose because there is a wide range of possibilities and all plans differ. But the clear message is that if you do something that is more stringent with mental health care than with physical health care, you need to look at it closely. Some insurers will re-evaluate their management and even it up. But of course there will be litigation as patients stand up and say, ‘This is not right. I am not getting the benefits.’

“And that is the way it should be. Now patients will have a law that they can point to.”

At New England Psychologist’s deadline, the final decision of the court had not been handed down.

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