Parity comes to Medicaid

Last month, I wrote about the Mental Health Parity and Addiction Equity Act (MHPAEA) and its impact on how the new psychiatry CPT codes were being used (and misused) by commercial payers. On Jan. 16, the Centers for Medicare and Medicaid Services (CMS) issued a Dear State Health Officer (SHO) letter that provided guidance to state Medicaid directors regarding the applicability of MHPAEA to Medicaid.

This is also the same date that President Obama stated – and HHS Secretary Sebelius quickly confirmed – that the final regulations for MHPAEA would be completed this year. (Despite the passing of MHPAEA in 2008, payers were not required to be compliant until 2010. Yet a “final rule” has not been issued, resulting in confusion about how the law must be applied.)

The SHO letter, issued by Director Cindy Mann, explains in its six pages what is expected of Medicaid. While maybe not great for beach reading, it is exciting to read that the spirit of MHPAEA will be alive and well in Medicaid. The enumerated requirements apply to Managed Care Organizations (MCOs) that contract with states to provide Medicaid services. For example:

• “Medical management techniques used by the MCO, such as pre-authorization requirements, which are applied to mental health or substance use disorder benefits must be comparable to and applied no more stringently than the medical management techniques that are applied to medical/surgical benefits.”

•  The “criteria for medical necessity determinations made under the plan for mental health or substance use disorder benefits must be made available by the plan administrator to any current or potential participant, beneficiary, or contracting provider upon request.”

• “When out-of-network coverage is available for medical/surgical benefits, it also must be available for mental health or substance use disorder benefits.”

Finally, the letter also makes it clear that states should review their MCO contracts “to assure that plans comply with the provisions of MHPAEA.” “MCOs that are not in compliance with the parity requirements described above should take steps to come into compliance with those requirements.”

The SHO letter also addresses compliance of state Alternative Benefit Plans and CHIP (Children’s Health Insurance Programs) plans.

While there is no deadline stated as to when state Medicaid plans must become compliant nor does the letter indicate the penalties for noncompliance, this is clearly a warning shot putting state Medicaid directors on notice. I expect we will see further clarification once the Final Rule is issued later this year.

What it means in Maryland so far is that Medicaid has become one of the better payers for the new CPT codes for mental health services. This is in part because of commercial payers’ noncompliance with MHPAEA, paying combined E&M plus psychotherapy services on par with 90805 and 90807 rates from last year, rather than paying E&M codes at the same rates as for primary care physicians.

As complaints from patients and psychiatrists continue to pile up – to state insurance commissioners, MCO medical directors, state district branches, the APA, state attorneys general offices, and the Department of Labor – commercial payers also will begin to come in line across the country.

There will be challenges to riding out this national transition, but it seems clear that a new day is dawning for people who expect mental health and addiction care to be treated like any other medical service.

 —Steven Roy Daviss, M.D., DFAPA

DR. DAVISS is chair of the department of psychiatry at the University of Maryland’s Baltimore Washington Medical Center, policy wonk for the Maryland Psychiatric Society, chair of the APA Committee on Electronic Health Records, and co-author of Shrink Rap: Three Psychiatrists Explain Their Work, published by Johns Hopkins University Press. In addition to @HITshrink on Twitter, he can be found on the Shrink Rap blog and drdavissATgmailDOTcom.

Last month, I wrote about the Mental Health Parity and Addiction Equity Act (MHPAEA) and its impact on how the new psychiatry CPT codes were being used (and misused) by commercial payers. On Jan. 16, the Centers for Medicare and Medicaid Services (CMS) issued a Dear State Health Officer (SHO) letter that provided guidance to state Medicaid directors regarding the applicability of MHPAEA to Medicaid.

This is also the same date that President Obama stated – and HHS Secretary Sebelius quickly confirmed – that the final regulations for MHPAEA would be completed this year. (Despite the passing of MHPAEA in 2008, payers were not required to be compliant until 2010. Yet a “final rule” has not been issued, resulting in confusion about how the law must be applied.)

The SHO letter, issued by Director Cindy Mann, explains in its six pages what is expected of Medicaid. While maybe not great for beach reading, it is exciting to read that the spirit of MHPAEA will be alive and well in Medicaid. The enumerated requirements apply to Managed Care Organizations (MCOs) that contract with states to provide Medicaid services. For example:

• “Medical management techniques used by the MCO, such as pre-authorization requirements, which are applied to mental health or substance use disorder benefits must be comparable to and applied no more stringently than the medical management techniques that are applied to medical/surgical benefits.”

•  The “criteria for medical necessity determinations made under the plan for mental health or substance use disorder benefits must be made available by the plan administrator to any current or potential participant, beneficiary, or contracting provider upon request.”

• “When out-of-network coverage is available for medical/surgical benefits, it also must be available for mental health or substance use disorder benefits.”

Finally, the letter also makes it clear that states should review their MCO contracts “to assure that plans comply with the provisions of MHPAEA.” “MCOs that are not in compliance with the parity requirements described above should take steps to come into compliance with those requirements.”

The SHO letter also addresses compliance of state Alternative Benefit Plans and CHIP (Children’s Health Insurance Programs) plans.

While there is no deadline stated as to when state Medicaid plans must become compliant nor does the letter indicate the penalties for noncompliance, this is clearly a warning shot putting state Medicaid directors on notice. I expect we will see further clarification once the Final Rule is issued later this year.

What it means in Maryland so far is that Medicaid has become one of the better payers for the new CPT codes for mental health services. This is in part because of commercial payers’ noncompliance with MHPAEA, paying combined E&M plus psychotherapy services on par with 90805 and 90807 rates from last year, rather than paying E&M codes at the same rates as for primary care physicians.

As complaints from patients and psychiatrists continue to pile up – to state insurance commissioners, MCO medical directors, state district branches, the APA, state attorneys general offices, and the Department of Labor – commercial payers also will begin to come in line across the country.

There will be challenges to riding out this national transition, but it seems clear that a new day is dawning for people who expect mental health and addiction care to be treated like any other medical service.

 —Steven Roy Daviss, M.D., DFAPA

DR. DAVISS is chair of the department of psychiatry at the University of Maryland’s Baltimore Washington Medical Center, policy wonk for the Maryland Psychiatric Society, chair of the APA Committee on Electronic Health Records, and co-author of Shrink Rap: Three Psychiatrists Explain Their Work, published by Johns Hopkins University Press. In addition to @HITshrink on Twitter, he can be found on the Shrink Rap blog and drdavissATgmailDOTcom.

Last month, I wrote about the Mental Health Parity and Addiction Equity Act (MHPAEA) and its impact on how the new psychiatry CPT codes were being used (and misused) by commercial payers. On Jan. 16, the Centers for Medicare and Medicaid Services (CMS) issued a Dear State Health Officer (SHO) letter that provided guidance to state Medicaid directors regarding the applicability of MHPAEA to Medicaid.

This is also the same date that President Obama stated – and HHS Secretary Sebelius quickly confirmed – that the final regulations for MHPAEA would be completed this year. (Despite the passing of MHPAEA in 2008, payers were not required to be compliant until 2010. Yet a “final rule” has not been issued, resulting in confusion about how the law must be applied.)

The SHO letter, issued by Director Cindy Mann, explains in its six pages what is expected of Medicaid. While maybe not great for beach reading, it is exciting to read that the spirit of MHPAEA will be alive and well in Medicaid. The enumerated requirements apply to Managed Care Organizations (MCOs) that contract with states to provide Medicaid services. For example:

• “Medical management techniques used by the MCO, such as pre-authorization requirements, which are applied to mental health or substance use disorder benefits must be comparable to and applied no more stringently than the medical management techniques that are applied to medical/surgical benefits.”

•  The “criteria for medical necessity determinations made under the plan for mental health or substance use disorder benefits must be made available by the plan administrator to any current or potential participant, beneficiary, or contracting provider upon request.”

• “When out-of-network coverage is available for medical/surgical benefits, it also must be available for mental health or substance use disorder benefits.”

Finally, the letter also makes it clear that states should review their MCO contracts “to assure that plans comply with the provisions of MHPAEA.” “MCOs that are not in compliance with the parity requirements described above should take steps to come into compliance with those requirements.”

The SHO letter also addresses compliance of state Alternative Benefit Plans and CHIP (Children’s Health Insurance Programs) plans.

While there is no deadline stated as to when state Medicaid plans must become compliant nor does the letter indicate the penalties for noncompliance, this is clearly a warning shot putting state Medicaid directors on notice. I expect we will see further clarification once the Final Rule is issued later this year.

What it means in Maryland so far is that Medicaid has become one of the better payers for the new CPT codes for mental health services. This is in part because of commercial payers’ noncompliance with MHPAEA, paying combined E&M plus psychotherapy services on par with 90805 and 90807 rates from last year, rather than paying E&M codes at the same rates as for primary care physicians.

As complaints from patients and psychiatrists continue to pile up – to state insurance commissioners, MCO medical directors, state district branches, the APA, state attorneys general offices, and the Department of Labor – commercial payers also will begin to come in line across the country.

There will be challenges to riding out this national transition, but it seems clear that a new day is dawning for people who expect mental health and addiction care to be treated like any other medical service.

 —Steven Roy Daviss, M.D., DFAPA

DR. DAVISS is chair of the department of psychiatry at the University of Maryland’s Baltimore Washington Medical Center, policy wonk for the Maryland Psychiatric Society, chair of the APA Committee on Electronic Health Records, and co-author of Shrink Rap: Three Psychiatrists Explain Their Work, published by Johns Hopkins University Press. In addition to @HITshrink on Twitter, he can be found on the Shrink Rap blog and drdavissATgmailDOTcom.