Jim Beall: California’s Mental Health Parity Violation ‘Terminator’

Insurers must obey the California mental health parity laws or pay a hefty sum, according to the recently passed California Senate bill (SB) 1046. Senator Jim Beall (D) introduced the consumer-minded bill to address insurance companies’ violations of the parity laws and to give penalty authority to California’s Department of Insurance (DOI), the state’s regulator of self-employer and individual insurance plans, as the Department of Managed Health Care (DMHC), the state’s health plan regulator in February 2014.

A chair of the Senate Mental Health Caucus, Beall said the bill “puts health insurers on the alert that they must live up to the law or face fines’’ of up to $2,500 per day. The existing California law allows the DMHC to levy per-day penalties for on-going mental health parity violations. However, California’s codes do not give the DOI the same authority, and some private insurers are taking advantage. The new law will allow the DOI to impose the fines and close loopholes for insurance companies seeking to escape the parity laws. The DOI handles approximately 10 percent of health care consumers.

Mental health parity also was addressed in the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which requires that inpatient, outpatient, and emergency mental health services be available to underserved populations. A Final rule (78 FR 12834) issued by HHS in February 2013, implemented the ACA to require Exchanges and insurance issuers to cover mental health and substance use disorder services as one of the 10 essential health benefits (EHB) categories for the individual and small group markets. Section 1302 of the ACA implemented an EHB package that includes coverage requirements, cost-sharing limits, and actuarial value requirements for health plans. This paved the way to 2014 parity requirements, under which all health plans, including those sold through Exchanges or Marketplaces, must offer coverage of mental health services comparable to coverage of medical and surgical benefits. The ACA requirements comply with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which previously established parity requirements, but did not apply them to health plans without coverage for mental health care or to companies with less than 50 employees.

Other states, such as Washington, have been experiencing similar insurance parity violations, in which blanket exclusions on medically necessary mental-health care services are imposed and left out of policy text.

Beall strives to terminate the loopholes insurers have found and improve access to mental health care. According to Beall, there are approximately 2 million insured Californians who could not get needed mental health services. Beall has championed several health insurance efforts including his creation of the Children’s Health Initiative to provide every child in Santa Clara County with health insurance and his legislation to help foster care children, low-income families, and people with disabilities.

SB 1046 was passed by the state assembly on August 4, 2014, and is awaiting Governor Jerry Brown’s approval.

Highlight on Maine: Maine Tightens TANF Benefits with Drug Test Enforcement

By Lisa A. Weder

In a push to make Maine’s residents more self-sufficient, Governor Paul R. LePage (R-Me.) says it’s time to enforce a drug testing law on convicted drug felons who receive or apply for welfare benefits. On Wednesday, August 6, 2014, the former businessman turned governor announced that the Maine Department of Health and Human Services (Maine HHS) will carry out its plans to drug test those felons who receive Temporary Assistance for Needy Families (TANF) benefits.

TANF benefits are funded under Part A of Title IV of the Social Security Act (SSA), as amended by sec. 5507 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which awards states grant funding to provide health services and education and job training to low-income individuals. TANF benefits are designed to:

  • Assist needy families in ways that children can be cared for in their own homes;
  • Promote job preparation, work, and marriage to foster independence in needy parents;
  • Prevent and reduce out-of-wedlock pregnancies; and
  • Encourage the formation and maintenance of two-parent families.

Welfare reform was a large part of Maine’s 2012-2013 budget, which implemented a new five-year limit on welfare benefits. The governor’s reasoning for instituting the drug-testing policy revolves around spending tax dollars wisely. “Maine people expect their tax dollars to be spent supporting our most vulnerable citizens—children, the elderly and the disabled,” said LePage. “We must ensure that our tax dollars do not enable the continuation of a drug addiction.” The thought is that someone using drugs will misspend TANF assistance funding and put their family’s needs on the back burner. The governor asserts that being drug-free enables welfare beneficiaries to move away from poverty and toward financial independence.

Maine HHS has implemented its drug-testing procedures and program with best practices, privacy, fairness, and accountability in mind, according to Maine HHS Commissioner, Mary Mayhew. When a person applies for TANF benefits, the individual must indicate whether he or she has a prior drug-related felony conviction. If that is the case, the state will schedule a drug test and notify the person 24 hours prior to the actual test. A person testing positive the first time can take the test one more time. According to Maine’s state website, a first offense results in the termination of adult benefits, and a second offense may result in the family’s loss of benefits. The tests are funded by the state.

To avoid termination of welfare benefits, an afflicted individual may enroll in an HHS-approved substance abuse program. Persons failing to disclose that they are convicted drug felons violate the program rules and face immediate termination of TANF benefits.

Maine’s new rule was originally introduced in 2011, but becomes effective October 1, 2014. Some question why the governor is enforcing the policy now in light of the fact that Maine is ranked 47th in terms of job creation. Portland, Maine’s local news channel, WCSH6, interviewed Democratic political analyst Ethan Strimling who said that “ … in terms of getting people off welfare, it’s not going to do us much good.” The policy will be published in August 2014 and will be subject to a public hearing and final approval by the Attorney General’s office.

The question yet to be answered is whether Maine’s drug testing policy will help or hinder families receiving TANF benefits.

AHA Looks Through Congress Towards CMS, Urges Transparency

The American Hospital Association (AHA) wrote a letter encouraging members of the Senate to increase access to health care data while maintaining patient privacy and the security of patient information. The letter seeks to uncover the currently unavailable wealth of CMS data, which AHA says can be used to improve upon the quality and value of health care. Through measures that are targeted at CMS, AHA believes data sets can be made into accessible, practical, and efficient tools for research and progress.


The letter focuses on Medicare claims data that CMS, at present, makes only partially available. AHA recommends that CMS be required to make data from across the continuum of care accessible, so that opportunities for improvement in the quality of care can be identified for the whole continuum of care. To effectuate that goal, AHA says that the Part B Carrier and the Part B Durable Medical Equipment limited data set (LDS), the standard analytic files (SAF), and the Part D prescription drug data should be made accessible to interested parties and researchers. Part of the AHA recommendation is to have CMS streamline current practices. For example, AHA suggests that the access to research identifiable files (RIFs) be simplified from the current system, which requires a review board approval for each project, to a system where researchers are granted a “one-time clearance” from the review board for a specified period of time.


The AHA also expresses in the letter its support for initiatives to improve price and quality transparency among providers. For example, the letter indicates AHA’s support for the Health Care Price Transparency Promotion Act (H.R. 1326), which would impose a requirement on states to have or establish laws requiring hospitals to disclose price data for certain services.As part of its involvement in a Healthcare Financial Management Association (HFMA) report, which the AHA attached to its letter, the AHA identified that health plans are best situated to pass along pricing data to insured patients. In keeping with that understanding, the letter recommends to congress that health plans should be the primary source of pricing information for insured patients. AHA also recommends that CMS publish additional quality data while maintaining awareness about the comparative usefulness and relevance of the data it provides.


In a separate section, the AHA sets out several cautionary statements regarding the need for prudence as data access grows. The letter emphasizes that “caution must be exercised to ensure privacy and security is maintained.” The AHA letter includes a reminder to congress that de-identified data can be reconnected to individuals with relative ease. In light of the ease of extrapolating protected information from health care data, the letter urges congress to exercise a heightened level of caution when considering making information available to entities that are not considered covered entities under the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191).

Sen. Kirk Sounds Off on Medicare IDs, Demands Military-Level Smart Cards

Senator Mark Kirk (R-Ill.) is spreading the word about new technology that would protect seniors’ identities when it comes to their Medicare cards. “With their social security number prominently displayed on the front of their Medicare cards… seniors are at a high risk of becoming a victim of identity fraud,” said Kirk in a recent press release, which announced the introduction of a new bill that would transform the current Medicare card design into a smartcard that mirrors the technology utilized by servicemen and women’s identification cards.


The Medicare Common Access Card Act of 2014, which was introduced by Kirk in July of this year, would, according to Kirk, “reform the current Medicare card design utilizing smart technology to protect seniors’ personal information and prevent continued abuse of the system.” Specifically, the Act calls for the creation of a Medicare identification card that contains an electronic chip that would store the cardholder’s personal information. This is the same type of technology that is used by the Department of Defense to create military identification. In the press release Kirk described meeting with senior citizens at an Illinois Supportive Living program facility as well as officials from the Illinois branch of the AARP. At the meeting, he discussed this new bill and related technology as he stated his desire for seniors “to have the same level of identification security as our servicemen and women.”

Related Legislation

As it was previously reported by Wolters Kluwer, other similar legislation, in the form of the Protecting the Integrity of Medicare Act of 2014, was recently released in draft form by the House Ways and Means Subcommittee on Health Chairman Kevin Brady (R-TX). The bill was created to prevent abuse and fraud within the Medicare program and included a provision that would remove seniors’ social security numbers from ID cards. The bill also included a provision that “recommends that the HHS Secretary investigate the technological viability of using smartcards to identify Medicare beneficiaries.”

According to Kirk’s press release, “Medicare fraud currently costs American taxpayers upwards of $60 million per year.” He further asserted that his bill would not only aim to reduce waste and abuse but also save taxpayers money.