Medicaid MCOs ABPs, CHIP join the mental health parity party

CMS finalized proposals to strengthen access to mental health and substance abuse services for beneficiaries of certain Medicaid plans and Children’s Health Insurance Plans (CHIP), an initiative that was originally born out of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (P.L. 110-343). The Final rule, published in the Federal Register on March 30, 2016, was announced in connection with President Obama’s attendance at the National Rx Drug Abuse and Heroin Summit. At the same time, CMS released a summary of its “latest efforts to increase access to improve mental health and care for low income individuals, especially in light of the opioid abuse epidemic, which constitute significant health risk and cost drivers in the Medicaid program.”

Legislative and regulatory history

The MHPAEA, which generally requires that health insurance plans treat mental health and substance abuse treatment as they would surgical or medical benefits, amended the Public Health Service Act (PHSA) (42 U.S.C. §6a et seq.) to apply mental health parity requirements to certain Medicaid and CHIP coverage. That is, the MHPAEA requires plans within its scope to offer the same benefits that private health insurance plans offer. Parity requirements under the MHPAEA were expanded through the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which mandated that parity requirements be applied to qualified health plans (QHPs) and Medicaid non-managed care benchmarks and benchmark equivalent plans.

The new requirements issued as a part of the Final rule, which were first introduced in the Proposed rule, are meant to ensure that Medicaid and CHIP beneficiaries retain parity in regard to this type of treatment regardless of whether the coverage is delivered through a managed care organization (MCO) or alternative plan models. The Final rule made only minor changes to the regulations set forth in the Proposed rule (see CMS Proposed rule would extend mental health parity to Medicaid MCOs, Health Law Daily, April 7, 2010; Proposed rule, 80 FR 19418, April 10, 2015).

Targeted coverage and new requirements

Specifically, the Proposed and Final rules focused on the application of parity requirements under the MHPAEA to the following coverage: (1) Medicaid MCOs; (2) Medicaid benchmark and benchmark-equivalent plans, which are referred to as Medicaid alternative benefit plans (ABPs) in the Final rule; and (3) CHIP. CMS explained that states currently have flexibility in terms of care delivery mechanisms under Medicaid and that states are free to use entities other than MCOs, including prepaid inpatient health plans or prepaid ambulatory health plans, to provide services to beneficiaries. According to CMS, the Final rule, “maintains state flexibility in this area while guaranteeing that Medicaid enrollees are able to access these important mental health and substance abuse services in the same manner as medical benefits.” According to CMS, the Final rule will positively affect over 23 million people who are enrolled in Medicaid MCOs, ABPs, and CHIP.

Pursuant to the Final rule, affected plans will be required to disclose both the information on mental health and substance use disorder benefits as well as determinations of medical necessity for these services whenever the information is requested. Further, the reasons for denial of reimbursement or payment for these types of services must be disclosed by the state.

Other mental health parity initiatives

Besides announcing the release of the Final rule for Medicaid and CHIP mental health and substance abuse treatment parity, the agency also summarized other initiatives that it has promoted to transform the behavioral health system and, specifically, to target the opioid abuse epidemic. These initiatives include:

  • the CMS Innovation Accelerator Program of 2014, which was a new strategic and technical support platform that aimed to improve delivery of substance use disorder treatment to high need and high cost individuals;
  • guidance that explained a new Social Security Act 1115 demonstration opportunity that encouraged the development of full coverage through a continuum of care for beneficiaries with substance abuse issues;
  • information on effective safeguards and options to prevent over-prescribing of opioid pain medication; and
  • information regarding screening and intervention services for children and youth with mental illness and/substance abuse issues.