In 2006, New York enacted a parity mandate in the form of Timothy’s Law, which requires group health plans to provide 30 inpatient days and 20 outpatient days for most mental health diagnoses and requires large plans to provide full coverage for certain biologically based illnesses. Several years later, Congress enacted the federal Mental Health Parity and Addiction Equity Act, which expands Timothy’s Law into a full parity benefit. Despite these hard-won legislative successes, full implementation and enforcement of parity requirements has yet to be achieved and challenges remain, particularly in the context of parity in reimbursement and parity in utilization review. These areas often have a significant impact on the behavioral health workforce and their ability to receive adequate reimbursement for the essential care and treatment they provide to patients in need.
This article will address some recent legislative and litigation-related successes in New York and in other jurisdictions as well as additional advocacy work that is still needed in the parity arena.
Behavioral Health Insurance Parity Reforms
One recent success involves the 2019-20 New York State Budget, which included a comprehensive overhaul of the New York Insurance Law seeking to eliminate discrimination in coverage of care and treatment for mental health conditions, substance use disorders and autism spectrum disorders. These new provisions, called Behavioral Health Insurance Parity Reforms (BHIPR), apply to all health insurance and health benefit plans offered in New York State, including individual plans, group plans and HMOs.
The following are some of the key provisions of the BHIPR:
- Coverage for all mental health conditions, substance use disorders and autism spectrum disorders, as defined in the most recent edition of DSM or ICD;
- Prohibits preauthorization and concurrent review of substance use disorder services during the initial 28 days of inpatient and outpatient treatment;
- Prohibits preauthorization and concurrent review of psychiatric inpatient services for persons under the age of 18 for the first 14 days;
- Prohibits prior authorization for formulary forms of prescribed medications for treatment of substance use disorders;
- Clinical review criteria applied by utilization review agents must be approved/designated by OMH or OASAS, where applicable;
- Medical necessity criteria must be made available to insureds, prospective insureds, or in-network providers upon request;
- Prohibits taking any adverse action in retaliation against a provider filing a complaint, making a report, or commenting to a government body regarding policies and practices that violate the law;
- Requires insurers and health plans to post additional information regarding their in-network providers of mental health and substance use disorder services, including whether the provider is accepting new patients as well as the provider’s affiliations with participating facilities certified or authorized by OMH or OASAS; and
- Provides additional funding resources for staffing at DFS and DOH to handle oversight and enforcement of parity.
Self-insured plans are not subject to these new provisions, but remain subject to the federal parity law and regulations. The BHIPR provisions take effect January 1, 2020 and apply to all policies issued, renewed, modified or altered after that date.
Landmark Mental Health Ruling in Class Action Suit
A second success in the fight for full implementation of the parity statutes took place earlier this year, when the U.S. District Court for the Northern District of California held that United Behavioral Health (UBH) illegally denied coverage of mental health and substance use disorder treatment by relying on flawed medical necessity criteria (Wit v. United Behavioral Health, Findings of Fact and Conclusions of Law, Case No. 14-cv-02346-JCS, (N.D. Cal. Mar. 5, 2019), ECF No. 418). The Court found that UBH was liable under ERISA for developing restrictive medical necessity criteria that deviated from generally accepted standards, resulting in systematic denials of outpatient, intensive outpatient and residential treatment. Although UBH has indicated publicly that it plans to appeal the decision, this is an important breakthrough because the Court acknowledged that UBH’s utilization review activities appear designed to limit coverage and therefore reduce access to necessary behavioral health care and treatment. Although the class action suit did not address parity issues, targeting the treatment of mental illness for medical necessity reviews constitutes a pattern and practice of impermissible discrimination that may also violate the federal Mental Health Parity and Addiction Equity Act.
In the 106-page decision, the Judge noted: “…in every version of the Guidelines in the class period, and at every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.” He further noted that UBH guidelines appear to be aimed at reducing costs rather than fiduciary duties owed to beneficiaries and reflected “a ‘utilization management’ model that keeps benefit expenses down by placing a heavy emphasis on crisis stabilization and an insufficient emphasis on the effective treatment of co-occurring and chronic conditions.”
Evaluation and Management Claims
On the other hand, there remain significant issues with reimbursement for behavioral health services that directly impact providers and must be addressed. Recently, two NYSPA members received disallowances of evaluation and management (E/M) codes by a commercial carrier in connection with combination psychotherapy claims. During the course of a post-payment documentation audit, the carrier took the position that “the use of E/M codes should be limited to new patients, patient re-evaluation after a series of treatments, or a significant change in a patient’s condition.”
This policy is in direct conflict with the conventions of CPT, which provide that psychotherapy may be billed using a combination psychotherapy code, comprised of an E/M code and a psychotherapy add-on code. Psychiatrists regularly provide E/M services in all settings – inpatient and outpatient – and there is no clinical reason why this service cannot be provided at each patient visit. This policy also conflicts with New York Insurance Law 3224-b, which requires insurers (and all health plans) to accept and initiate processing of all health care claims submitted by physicians in a manner consistent with the current version of CPT. Further, guidance issued by the New York Department of Financial Services requires insurers to accept and initiate processing of E/M codes from any physician, including a psychiatrist, for the treatment of mental, nervous, or emotional disorders or ailments.
Finally, a policy of this nature also runs afoul of the federal HIPAA statute and regulations because a failure to provide identical reimbursement rates for the same CPT code for a behavioral health claim vs. a non-behavioral health claims would be an illegal non-comparable treatment limitation.
In order to address this concerning issue, NYSPA immediately contacted the American Psychiatric Association and our two organizations worked collaboratively to draft a letter to the carrier to raise our significant concerns regarding its E/M policy. The following is an excerpt from the joint letter:
“There is nothing in the Federal Register or CPT to support [the carrier’s] position that psychiatrists are prohibited from providing an E/M service for every single outpatient/office visit, whether or not the psychiatrist also provided an add-on psychotherapy visit in addition to the E/M service. All physicians, regardless of specialty, who see a patient in their office first bill an outpatient/office E/M code for every patient visit and then include billing for any other procedures provided during that office visit. There is absolutely no basis for restricting or limiting the use of E/M codes by one specialty – psychiatry. Not only is [the carrier’s] position not supported by CMS, Medicare, or CPT, it violates federal parity laws.”
NYSPA and APA await a response from the carrier on this important issue.
Utilization Review
NYSPA continues to work to assist its members in connection with the ongoing utilization review activities of insurance carriers. Many NYSPA members report that a variety of health insurance carriers continue to conduct medical necessity reviews of behavioral health treatment similar to those detailed in the California lawsuit. Often, the medical necessity review will consist of requests for treatment records and/or a phone interview with the provider to permit the carrier to make a determination regarding the medical necessity of services under review.
Similar to the treatment of other chronic illnesses and conditions, such as diabetes, hypertension, coronary artery disease and rheumatoid arthritis, treatment of chronic mental illness focuses on disease management, not cure. The goal of treatment of chronic illnesses and conditions is symptom reduction and improvement in functioning. After addressing symptoms and dysfunction to the extent medically feasible, the goal of treatment then shifts to maintenance of gains to prevent return of symptoms and loss of function.
While health plans are legally permitted to limit covered benefits to only medically necessary care and treatment, some utilization review efforts appear to be conducted solely in connection with claims for mental health treatment or are more restrictive and more stringent than medical necessity reviews of treatment for non-behavioral health conditions. Further, as the Judge in the California class action suit found, such reviews may be performed using medical necessity criteria that are improper and do not conform to generally accepted standards of care.
A typical scenario is a covered patient being seen once or twice a week by their psychiatrist for treatment of a chronic mental illness on an out-of-network basis. A representative of the health plan will contact the treating psychiatrist and request a telephone interview to provide information justifying the need to continue the treatment at the current frequency. Despite the provider’s demonstration of medical necessity for the services in question, these reviews often result in the reduction or even termination of further reimbursement. Reviewers often make a determination that the patient can be seen at a lower frequency or that further treatment is simply not medically necessary.
Access to Care
Another troubling parity issue that impacts both providers and patients is reduced access to care resulting from inadequate reimbursement for mental health and substance use disorder services. In the out-of-network context, without adequate reimbursement, patients may be unable to pay out-of-pocket for their care and may be forced to discontinue treatment. In this way, inadequate reimbursement acts as a barrier to care because the quality of an out-of-network benefit is measured by the reimbursement that the patient will receive under the terms of their health plan. In some cases, reimbursement may be so low as to effectively constitute no benefit at all. Further, it is important to look carefully at what is paid out-of-network for behavioral health benefits compared to what is paid for non-behavioral health benefits.
On the other side of the coin, if in-network mental health fees are so low that they fail to represent reasonable compensation for the provider’s time and expertise, many providers will not want to accept the plan’s fee schedule as payment in full. As a result, providers may refuse to join networks or drop out of networks. In both the in-network and the out-of-network context, ensuring discrimination in payment is a key factor in ensuring adequate access to psychiatric care and treatment.
Despite recent gains, inequities in reimbursement and utilization review for behavioral health services persist. NYSPA is committed to working with the provider community, government regulators and other stakeholders to ensure adequate and fair reimbursement for the treatment of mental illness and substance use disorders, both for providers and patients alike.
Rachel A. Fernbach, Esq. is Deputy Director and Assistant General Counsel of the New York State Psychiatric Association and is Vice-Chair of the Mental Health News Education, Inc. Board of Directors.
