State and federal parity laws help end decades of discriminatory insurance coverage for mental health and substance abuse services by insurance companies. Historically, families with mental illness have faced terrible choices, from skipping care altogether to facing bankruptcy to pay for it. In New York, we know the O’Clair family, for whose son Timothy New York State’s parity law is named, faced an unconscionable decision: whether to turn over custody of an ill child to secure appropriate treatment.
Achieving mental health parity in New York State was a truly heroic effort, led by a coalition of effective and organized advocates. NAMI-NYC Metro was proud to be a part of that coalition and has followed through on that work with the first-ever qualitative study of Timothy’s Law since its implementation. The results of this study, which was published in Psychiatric Services this past April, suggest that while we have taken a huge step forward together, there is a lot more work to be done.
Parity in Context
The Mental Health Parity Act of 1996 prohibited health plans from imposing annual or lifetime dollar limits on mental health benefits that were less favorable than those imposed on medical-surgical benefits. However, it did not prevent plans from imposing disparate treatment limitations on the number of annual mental health visits and hospital days covered, nor did it make cost-sharing requirements equal.
The federal Mental Health Parity and Addiction Equity Act of 2008, which went into effect on January 1, 2010, prevents such disparities in coverage. The law covers health plans with more than 50 employees and mandates equality in treatment limitations for mental health and medical-surgical benefits, as well as in the cost-sharing requirements and managed care practices used to regulate the benefits.
Moving from federal to state law, 49 states have passed mental health parity laws that vary in terms of the size of companies and range of diagnoses covered by the law and the mandated level of mental health coverage stipulated in the law.
Timothy’s Law, which became effective in January 2007, mandates all fully insured companies that issue health insurance regardless of size in New York State to cover a base benefit of 20 outpatient mental health visits and 30 inpatient hospital days for all members. It requires parity between cost-sharing requirements for mental health and medical-surgical coverage.
In addition, for companies with more than 50 employees, Timothy’s Law extends full mental health parity coverage for a number of biologically based diagnoses and childhood emotional disorders by mandating equality between the treatment limitations imposed on coverage of these conditions and medical-surgical coverage.
NAMI-NYC Metro’s Benefits Project
The fight for mental health parity has been viewed by many of us as a civil rights issue. The lack of parity highlighted the artificial distinction between health and mental health and was a clear manifestation of the stigma associated with mental illness. For all of these reasons, NAMI-NYC Metro has focused on mental health parity as a key advocacy issue for over a decade.
In 2002, with the support of the van Ameringen Foundation and the New York Community Trust, we launched the Mental Health Benefits Project. At its inception, this project focused on achieving parity in mental health benefits by advocating for the passage of New York State’s parity law and for the voluntary adoption of such benefits by companies in New York City. Through the course of our work, we learned that while good mental health benefits are necessary, they are not sufficient to ensure access to quality mental health services.
We worked with large and small businesses to encourage them to manage mental health effectively in the workplace, with a primary focus on issues of access and quality.
In 2006, we formed the Small Business Workgroup to define and address the barriers and opportunities for improving mental health management and resources for this category of businesses. Following the recommendation of this workgroup and interest expressed by several health insurance companies, we developed resource guides for small businesses –one for employers and another for employees. We ultimately distributed over 22,500 guides and made them available to the public for downloading on our website.
Meanwhile, to continue our learning and to provide a forum where key stakeholders could exchange ideas about mental health and the workplace, we convened annual half-day Workplace Wellness Think Tanks for employers, benefits consultants, mental health advocates and others. This series addressed topics such as mental health parity, the role of HR in workplace mental health and best practices in workplace mental health management.
Evaluating the Law
Timothy’s Law was intended to provide employees with increased access to mental health benefits. Anticipating the need for an assessment of whether it was achieving this goal and to determine the financial impact of the law, lawmakers included in the legislation a requirement that the New York State Department of Insurance complete a study of the law’s impact, in consultation with the Office of Mental Health.
The Superintendent of Insurance would assess “the numbers” associated with the law’s implementation: costs, utilization rates, how many policyholders elected to purchase other mental health coverage pursuant to the law, and the type and number of illnesses for which coverage has been provided.
These are quantitative measures, which are effective in assessing any changes in the utilization rates of mental health services. A quantitative evaluation, however, cannot determine the reasons for the change in the utilization observed, or even if individuals are receiving appropriate care.
This omission risked leaving undiscovered barriers that may exist for a large proportion of the population. NAMI-NYC proposed to undertake a qualitative evaluation to complement the quantitative analysis, providing citizens and policymakers a more comprehensive picture of the impact of Timothy’s Law.
In April of this year, our study was published in Psychiatric Services. It finds that employees covered by Timothy’s Law are largely unaware of their new benefits and are continuing to encounter significant barriers as they attempt to access mental health services.
Mental health consumers and their families report that health plans are not providing clear communication or complete information about extended mental health benefits to employees. Written notices are said to lack descriptions of full benefits, online information proves difficult to find, and in some cases, health plan representatives appear to be unfamiliar with the law and may be providing inaccurate information.
A major obstacle for employees seeking mental health care is locating high-quality, in-network providers. Provider lists are reported to contain providers no longer accepting members’ insurance or with waiting times for appointments of weeks or months.
Beyond a lack of information and few provider options, some interviewees also perceived more aggressive use of managed care of their mental health benefits. In some cases, preauthorization requirements for mental health services were not found to be comparable to those for general medical care. Criteria for determining the medical necessity of inpatient care were hard to determine. In addition, insurance company denials of care on the grounds of medical necessity have been reported to be inconsistent with the assessments of providers.
Our study shows that comprehensive education programs and effective oversight could improve access to quality mental health treatment. Here are some key recommendations:
Education efforts by health plans are needed to ensure that Americans affected by parity laws know about their extended benefits and able to access them. Federal standards would be extremely useful, as would monitoring of these communications, which must be clear and accessible to anyone seeking care.
Mental health providers must educate clients about their extended benefits. Behavioral health agencies have a role to play, assisting this effort by making benefits information available online and in newsletters.
Human resources departments must develop education programs for their employees. This is, after all, employer-based insurance, and untreated mental illness in the workplace affects both lives and profits. These efforts would simultaneously address stigma, the most persistent barrier to care.
The provisions of the federal law that mandate parity in inclusion criteria for provider networks and managed care mechanisms need to be monitored. People seeking mental health services must be able to find providers close to their homes that accept their insurance and have appointments available in a reasonable period of time.
New York took a great step forward by extending benefits to employees and their family members with mental illness through Timothy’s Law. With a little leadership from health plans and employers, and effective government oversight, we hope that access to and availability of quality care will improve.