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Home » Mental Illness » What is Parity » California Parity

Questions & Answers for California Parity

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October 14 and 15, 2009

Lake Natoma Inn

702 Gold Lake Drive

Folsom, CA 95630




CMHPC Members Present:

Dale Mueller, Chair                                 Gail Nickerson, Chair-Elect

Beverly Abbott                                            Jim Alves                                    Dennis Beaty

Renee Becker                                           Jim Bellotti                                  Lin Benjamin

Shebuah Burke                                         Sophie Cabrera                         Andrew Cavagnaro

Doreen Cease                                          Adrienne Cedro-Hament          George Fry, Jr.

Luis Garcia                                                Karen Hart                                    Patrick Henning

Carmen Lee                                              Barbara Marquez                         Barbara Mitchell

Jennie Montoya                                         Joe MortzMark Refowitz              John Ryan

Daphne Shaw                                           Linne Stout                                    Stephanie Thal

Monica Wilson                                           Curtis Boewer (Friday)


Staff Present:

Linda Brophy                                             Karen Hudson

Brian Keefer                                               Andi Murphy

Narkesia Swangian                                  Tracy Thompson


Wednesday, October 14, 2009


1. Welcome and Introductions
Chair Mueller called the meeting to order at 1:03 p.m. Planning Council Members and guests in the audience introduced themselves.
Chair Mueller presented a Certificate of Appreciation to Jim Bellotti in recognition of outstanding contributions as a representative of the California Department of Education, and as a member and participant of the Children and Youth Subcommittee and Quality Improvement Committee. Mr. Bellotti thanked the Council for the great opportunity to be a part of Planning Council meetings.
2. Update on Federal Parity Statute
Sheree Kruckenberg, Vice President, Behavioral Health, California Hospital Association, provided the update. Some highlights:
The federal Mental Health Parity and Addiction Equity Act of 2008 (“the Act”) was included in the Emergency Economic Stabilization Act of 2008 and signed into law on October 3, 2008. It is part of HR 1424. It goes into effect for most plans on January 1, 2010.
The Act required three Departments -- Labor, Health and Human Services, and Treasury -- to write regulations. In April of 2009 Health and Human Services released a Request for Information to solicit comments about the regulations from stakeholders and others. Over 400 comments were submitted, from California and other states.
Because of the large number of responses, Health and Human Services realized they would not be able to assimilate all the comments and write the regulations by October 3, 2009, as prescribed by the Act. The October deadline has been extended to January 2010 to allow time to incorporate the large number of comments received.
As part of the Act, Executive Order 12866 requires solicited comments to assess the anticipated costs of rulemaking; to analyze the economic impact on small entities; and to estimate the time and costs incurred for collection of information.
All the proposed rules and comments can be found in the Federal Register; go to www.gpoaccess.gov/FR/ to sign up for daily updates.
The Act builds upon the existing 1996 Parity Act, which remains in effect through December 31, 2009, and which required plans to provide comparable annual or lifetime dollar limits for mental health and physical health services.
The Act amends the 1996 Parity Act to include substance use disorders (SUDs).
The Act also amends the Employee Retirement Income Security Act of 1974 (ERISA); the Internal Revenue Code of 1986; and the Public Health Services Act.
The word “Parity” in the new Act means equal benefits, equal limits, equal cost sharing, and equal coverage for mental health/substance abuse and physical health conditions.
Equity coverage for both mental health and addictions treatment services applies to all financial requirements, including deductibles, co-payments, co-insurance, and out-of-pocket expenses; and to all treatment limitations, including frequency of treatment, number of visits, days of coverage, or other similar limits.
If a group health plan (or coverage) provides out-of-network coverage for medical and/or surgical benefits, it must also provide out-of-network coverage, at parity, for mental health/substance use disorder benefits.
The Act modifies the original definition of mental health benefits created by the 1996 Parity Act to include a definition of substance use disorder benefits.
The Act requires that criteria for medical necessity determinations be made available upon request; however, it does not provide a definition of medical necessity.
Reasons for denials must be made available upon request, and in accordance with regulations.
The Act preserves state law and current Health Insurance Portability and Accountability Act (HIPAA) preemption standards apply.
There is a small employer exemption for employers with 50 or fewer employees.
A cost exemption is also available, but only for one year.
The Act does not apply to the individual insurance market or to Medicare.
The Act does not mandate that covered plans provide a mental health/SUD benefit or that all mental health and SUD conditions are covered.
To properly evaluate the Act, a Compliance Report will be due in 2012, and every two years after that. The Labor Secretary shall submit the report to Congress.
The General Accounting Agency (GAO) will provide a report to Congress within three years, and an additional report after five years, to ensure that parity is happening as it was described in the Act.
Covered entities include group plans that are sponsored by private-sector employers and unions; church-sponsored plans; Medicaid managed care; some State Children's Health Insurance Program (SCHIP) plans; and some state and local health plans.
It is hoped that one impact of the law will be that, for in-network providers, parity in financial requirements and treatment limitations will increase the number of potential clients seeking services. Other types of providers may see this as a
business opportunity and develop their capacity to provide MH and SUD services.
The Act does not require every diagnosis of a MH or SUD nature to be covered by a plan. It does say that if you offer mental health benefits, you must offer MH and SUD benefits on parallel with physical health benefits.


Questions/Answers/Comments with Ms. Kruckenberg

Joe Mortz: I’m assuming, with federal health reform, the Parity Act is going to process into reform, into whatever is being done at the federal level?

Answer: Well, it’s not going away. That would take an Act of Congress. This is not a part of health reform -- it happened prior to that process; nor have we received any indication that it will become a part of that process.

Joe Mortz: Does this require a change in licensing of practitioners for substance abuse? Would other non-licensed providers be recognized in California?

Answer: This doesn’t impact either of those in California at all.

Barbara Marquez: We received a memo stating that, due to the federal parity law, plans available now are being cut and the deductible levels are being raised on everything; and then, effective when your policy renews, we will not be able to get the same group plans that we have now. Have you received any information on that?

Answer: We have not heard anything about that. I’d be very interested in seeing those. Also, if you know of anyone that receives a notice that implies that a plan is going to cut benefits let me know. I think other states will be impacted more than ours, because California already has a state parity law in place.

In California we are blessed that our Medi-Cal benefit structure for mental health is superior to what most private health plans offer. I don’t see that changing. People always talk about the “community standard.” It’s nice that we are able to use our Medi-Cal program as the community standard.

Renee Becker: Will certain insurance companies be able to deny benefits; for example, Blue Shield used to say “well, we will only treat your son if he’s literally in detox” – meaning if he doesn’t get treatment he’s going to die. Are those kinds of issues brought up?

Answer: That’s the medical necessity part of it. Every plan is going to be able to have their own definition but it’s going to be dictated to them how they are going to be able to make those determinations. So it may help a little.

John Ryan: Under “covered entities” -- are state of California, county health care plans or managed care plans also covered by this parity legislation?

Answer: I would assume so, but I honestly don’t know for certain. If they are operating under a Medicaid-managed care agreement with the state the answer is yes.

John Ryan: How would parity work?

Answer: It would depend on the community standard. If a typical person would see a therapist today and typically be referred for a 30-day visit, that would be the community standard. So, if you had a plan that said “see your therapist today and come back in six months,” that would not be on parity with the community standard. However, there is no definition on what that “community” is – whether it’s city, county, state or something else.

Andrew Cavagnaro: There seems to be some confusion in the California parity act about coverage for people with autism spectrum disorders. Does this act improve on that or make that any clearer?

Answer: This act does not talk about diagnoses at all. So I would venture to say it will make it more difficult because it’s not a diagnosis-based statute. California’s is; it lists the diagnoses that must be covered.

Andrew Cavagnaro: You said that the critical factor is medical necessity. If a child had autism and a parent was seeking treatment for that child the issue would be does that child meet medical necessity for there to be coverage for applied behavior analysis or whatever other type of treatment?

Answer: Yes, and the medical necessity criteria is established by each plan. And that is supposed to be in everyone’s current plan as the EOC, the Evidence Of Coverage.

Beverly Abbott: Our understanding is that MediCare is not currently at parity but is going to phase in over three years. Is that right? One of the problems has been coverage and the other is co-pay.

Answer: The legislation states that parity will be phased in and full parity achieved in 2014.


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