Behavioral Healthcare

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Healthcare experts from Hewitt Associates believe that, despite the extra administrative and cost burden on U.S. employers, few companies will eliminate their existing mental health and substance abuse benefits as a result of new federal mental health parity regulations. Instead, most organizations will choose to modify their plans to comply with the new rules.

On January 29, CMS, the Department of Labor's Employee Benefits Security Administration and the IRS issued joint regulations under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The act prohibits group health plans that provide mental health or substance abuse benefits from setting higher co-payments and deductibles or imposing stricter limits for the treatment of mental illness or substance abuse. The regulations, which take effect for plan years beginning on July 1, 2010, also say that an employee assistance program (EAP) cannot be used as a gatekeeper — where members are required to use the EAP before accessing mental health/substance abuse benefits — unless a similar program is required for medical/surgical benefits.

According to Hewitt's survey of 70 Fortune 500 employers that offer mental health benefits, no companies in the survey eliminated mental health/substance abuse coverage since the Mental Parity Act was originally enacted in 2008. Instead, many took steps to comply with the initial legislation. For example, according to the survey, all companies have eliminated annual and lifetime maximums, a key component of the new regulations. One in five (20 percent) have modified mental health/substance abuse precertification requirements or adjusted the diagnoses and services covered under the plan, such as eliminating or adding coverage for specific services or adding out-of-network coverage. Additionally, almost all employers (98 percent) have maintained their current administrative arrangement with their mental health/substance abuse vendors so far. While most companies have stayed with a model where mental health/substance abuse benefits are administered by a specialty behavioral health vendor (i.e., a carve-out plan), Hewitt believes more companies will switch to a plan where benefits are administered by the medical benefits vendor (i.e., a carve-in plan) in the future.

Hewitt recommends that all employers review their mental health/substance abuse benefits programs — even those employers that already made changes to comply with the initial legislation. They should also conduct an in-depth comparison of their mental health/substance abuse and medical/surgical benefits to ensure compliance with the new regulations. This evaluation should include:

• A thorough cost analysis to ensure that mental health/substance abuse and medical benefits comply with MHPAEA regulations and to assess the financial impact of any changes.
• A review of plan documentation, medical management standards, financial requirements and treatment limitations to determine compliance.
• A detailed review of the conditions and treatment settings currently covered under the plan.
• An evaluation of the organization's overall behavioral health strategy in light of MHPAEA, including:
  • Ways to use an EAP to help offset some of the cost of design changes.
  • Methods for monitoring program utilization and vendor effectiveness after implementing plan changes.
  • Ensuring mental health benefits vendors are doing all they can to provide appropriate treatment, while also making sure employees are getting the care they need.
  • Assessing holistic strategies that focus on encouraging employees to take an active role in their own healthcare, leading to improved physical and mental health.

Source: Hewitt Associates, March 1, 2010