Justin C Harding, JD
NASMHPD
Senior Policy Associate
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Allotments for FY 2012 (final) and FY 2013
(preliminary) were made on July 26th. (see 78 Fed
Reg. 45217.)
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DSH and forensic patients. In January, CMS issued a
rule which substantially changes how psychiatric
facilities can calculate DSH related costs. The rule
specifically excludes from all DSH calculations:
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Individuals who are inmates in a public institution or
are otherwise involuntarily in secure custody as a
result of criminal charges are considered to have a
source of third party coverage. (See 77 Fed. Reg.
2500.)
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Final rule for DSH reductions issued by HHS
on September 13th. The rule only covers
2014 and 2015, after which the rule will be
revisited by HHS. The rule is designed on
the proposed rule discussed last month.
That rule was designed to minimize DSH cuts
and to hold states harmless as they weigh
Medicaid expansion and the ACA in general.
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New interim final DSH rule, which aligns
payments with each individual hospital’s
cost reporting periods. The rule was
effective immediately, with the comments
period extending to November 29th. The
rule would lessen administrative burden for
many hospitals.
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Eligible hospital: For the New Jersey
enforcement, OAS argued that the NJ hospitals
did not meet the MIUR calculations. MIUR
represents Medicaid inpatient utilization rate.
Conditions of participation: For the other three
states, OAS argued that the hospitals did not
meet the required standards for hospitals. While
DSH is Medicaid based, psychiatric hospitals are
required to meet basic and special Medicare
standards. Those standards are satisfied either
via participation in Medicare or via
inspections/accreditation.
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Conducted by the HHS Office of Audit
Services
Totals: in the last 12 months, 4 states, 8
hospitals, and over $90 million in DSH funds
returned. In prior years maybe 1
investigation a year.
States Affected: New Jersey (Nov. 2012);
Oklahoma (March 2013); Indiana (May
2013); Missouri (June 2013)
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Federal efforts re outpatient commitment
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Block Grant
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Privacy concerns
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Peers
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Representative Murphy bill
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New York Times article
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Joint mental health and substance abuse
application still inching towards full
implementation
Data efforts
Funding levels
Pressure from Congress and OMB
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Healthcare exchanges
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New efforts
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31 States and DC currently bill Medicaid
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Georgia – only state billing for whole health
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Pillars of Peer Support
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Nothing regarding background checks – still
state level only
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CMS Issued guidance on
implementation of state purchased
premiums. That guidance is available
here and here.
Details of the Arkansas plan.
Details of the Iowa plan.
Side-by-side comparison of key
provisions
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CMS had previously announced, in a Final Rule
released July 5th, that the honor system would
be used.
CMS clarified their position on August 5th. They
also issued a FAQ. Elements include:
The honor system only applies to state
exchanges IN SOME INSTANCES; federal
exchanges will be fully verified.
The honor system will only apply in 2014, the
first year of the state exchanges.
During both the federal and state application
processes, the interim tax credit or cost-sharing
reductions will last 90 days - by which time a
determination should be finalized.
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The federal verification process will use IRS
and Social Security Administration data; if that
is insufficient employer data and credit agency
data will be used; and the final step would be
applicant provided data.
State income verification will be identical,
except that the honor system will apply only in
certain conditions such when IRS data exists
from a prior year and the applicant explains
that at least a 10% income reduction has
occurred.
Overall, this means that real time income
verification will not exist, but that verification
will likely occur quickly within the 90 day
period (such as faxing a pay stub facilitating a
speedy determination).
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Employer mandate proposed rule. This largely effects information reported by certain
employers to the IRS. It applies even though the mandate has been delayed by a year
(until 2015). Participation is voluntary in the short term.
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Individual Mandate Final Rule. This rule covers shared responsibility payments, penalties,
and rules for when consumers must have insurance.
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Marketplace Program Integrity Final Rule. Fact Sheet also available. The rule sets
standards establishing marketplaces and insurers while preserving state role.
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IRS Proposed Rule Regarding Minimum Essential Coverage Reporting.
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Renewal of IRS comment gathering on patient protection. The comment request largely
directed at an ACA patient protection notice, but does cover the rule regarding pre-existing
conditions.
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Department of Labor guidance regarding coverage.
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Delay of final agreements with exchange plans. Not expected to delay marketplace
opening.
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Many rules delayed – including a number of
significant IRS/Treasury regulations.
Basic Health program rule. The proposed rule
describes eligibility and enrollments standards
for people with incomes between 133 and
200% of poverty and who do not qualify for
Medicaid or CHIP. These individuals would
purchase plans in the exchanges with 95%
federal (via premium tax credits or cost-sharing
reductions) payments. Benefits would include
the 10 essential health benefits.
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Delay of SHOP exchanges for one month.
Family glitch. Applies to employer provided plans. The
ACA defines affordable as 9.5% or less of an employee’s
income, but this calculation omits family plans – which
frequently cost much more - $5,600 to $15,700
according to Kaiser. As a result up to 500,000 kids could
be without insurance if employers choose to only provide
insurance to the employee. This is a drafting error
which will likely need a Congressional fix.
Bipartisan group of 100 House members asked CMS for
6 month delay in regulatory provision defining when a
Medicare beneficiary is classified as inpatient or
outpatient. Potential for higher out of pocket costs for
consumers. Rule does affect some psychiatric services.
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Catastrophic plan purchasers – catastrophic plans
must soon be upgraded to standard plans
Cadillac plan insurance purchasers – Employer
paid Cadillac plans will be increasingly taxed
Family plans paid for by small businesses
Delay until 2015 in limits on consumer
deductibles.
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Hospital mergers have doubled since introduction of
ACA.
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ACO’s are increasingly being formed.
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Slowest rate of inflation of health benefit plan costs
in 14 years
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Federal Marketplaces will offer an average of 53
plans, with lower premiums than projected.
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Physicians unhappy with current electronic health
records.
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Some large insurers – including AETNA, Cigna
and Unitedhealthcare, are limiting their
participation or pulling out of exchanges
Some employers – Kroger, UPS and the
University of Virginia for example – are ending
some types of spousal participation in their
health plans. Current projections have the
percentage of such employers rising from 4%
to 12%.
Some business (IBM and Time Warner for
example) are shifting retirees and part-timers
to the exchanges.
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Unions still concerned about the effects of the ACA
on so called “Cadillac Plans”.
Many unions have expressed a significant amount
of misgivings about the effects of the ACA on multiemployer plans.
While a small number of unions have urged ACA
repeal, most unions (such as the AFL-CIO) are
urging the Obama Administration to extend
subsidies to union members.
Unions are concerned that absent those subsidies
smaller employers within the multi-employer plans
will leave those union negotiated plans and force
union members (potentially millions of members)
to seek insurance on the exchanges.
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Immigrants. A significant number of legal
immigrants will face difficult decisions
regarding the ACA. For example, some will be
required to purchase insurance on the
exchanges but, despite their poverty, be
ineligible for subsidies or Medicaid.
Native-Americans. Native-Americans are
particularly hard hit by sequester and other
budget cuts, but ACA provides opportunity to
provide care to 579,000 uninsured NativeAmericans. Fact Sheet for more information.
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House Small Business Committee panel hearing on October 9th.
US Chamber of Commerce Survey – 74% of small businesses intend
to take some type of action to avoid the employer mandate
Raymond Keating, chief economist at the Small Business and
Entrepreneurship Council in said that two-third of the nation’s job
gains between January and August were part time jobs, a dramatic
change from the norm.
Dean Baker, co-director for the Center for Economic and Policy
Research, testified it was unclear what effect the ACA has had, if any.
Arguing that the penalty per employer is $2,000, and that the penalty
does not include anything for the first 30 workers of a business. He
also cited to Hawaii, which has had a similar employer mandate since
the early 1980s, where there have been miniscule changes in
employment rates.
GAO Report on CMS Oversight role in Limited Benefit Plans.
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NASMHPD’s is available on the NASMHPD
website.
Also of note is the National Association of
Medicaid Directors letter.
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Program started last year, punishing 2,217 hospitals and
over 280 million in Medicare Funds
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Last week, an additional 2,225 hospitals were cited for
over $227 million
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While hospitals dedicated to psychiatry, rehabilitation,
long –term care and veterans are omitted, poverty and
conditions such as obesity are frequently key factors that
many affected hospitals have noted are the underlying
cause for readmissions. Commentators have also noted
that safety net hospitals are those being hit the hardest by
these penalties. For more information, please visit this
CMS webpage.
In positive news, Medicare announced August 1st that
payments to inpatient psychiatric facilities would increase
2.3% - $115 million total (see 78 Fed. Reg. 46,733).
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Recent Speech by FTC Commissioner Julie
Brill.
Future oversight and Commissioner Brill
warning both based on traditional antitrust
laws, such as the Sherman Antitrust Act,
as well as recent rulemaking.
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State Action Doctrine. Parker v Brown. 317 US 341
(1943)
1. “The state has clearly articulated a policy to
displace competition. This requires that the policy
both justifies the anticompetitive behavior and
sufficiently expresses that such behavior is both
expected and endorsed.”
2. The state has committed to active supervision of
activities by health care payers; simple authorization
or regulation of proceedings is not sufficient. The
state must be able to review potential anticompetitive
acts such as setting prices and rates among payers.
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OMB - $450 million in deficit savings missed
due to lack of enforcement.
State decision-making regarding
termination of contracts with providers
accused of Medicaid fraud.
Managed care plans increasingly facing
litigation.
San Francisco sues Nevada regarding
patient “dumping”.
Program Integrity Update
Recent meeting with various federal
partners
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Where are they? 5 years of waiting finally
over.
Recent Senate Judiciary Oversight
Subcommittee on Oversight, Federal Rights,
and Agency Action regarding impact of
delays
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Were formally published today, November
13th. http://www.gpo.gov/fdsys/pkg/FR2013-11-13/html/2013-27086.htm.
Regulations were previously viewable on
SAMHSA website or public inspection desk
of Federal Register.
Promulgated under the Paul Wellstone and
Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008 (MHPAEA).
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Rules retain the six categories originally announced in the interim
rule: inpatient, in-network; inpatient, out-of-network; outpatient, innetwork; outpatient, out-of-network; emergency care; and
prescription drugs.
Most other parts of the interim rule also remain – the new final rule
adds wrinkles based on comments, FAQs, and the implementation of
the Affordable Care. While the final rule applies to benefit plan years
beginning on or after July 1, 2014, MHPAEA began affecting health
plans in 2010. The interim rules took effect in July 2010.
The ACA, in some areas, significantly extends the reach of MHPAEA,
but parity also affects numerous other Acts such as the Public Health
Service Act, ERISA and the Internal Revenue Code.
The regulations were issued jointly by the Department of Labor, the
Department of the Treasury, and the Department of Health and
Human Services.
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While MHPAEA deals with employer insurance
when the employer has 50+ employees, parity
has been functionally extended very broadly
through the ACA, particularly through essential
health benefits rules (see 78 FR 12834; Feb 25,
2013).
Cannot have separate cumulative financial
requirements and cumulative quantitative
treatment limits. Example – annual of lifetime
deductibles. The Departments rejected the
idea that separate deductibles was
burdensome, and noted that many plans,
including prior state efforts, noted no ill effects.
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General Parity Analysis
A group health plan (or health insurance coverage offered by an issuer in connection with a group health plan)
that provides both medical/surgical benefits and mental health or substance use disorder benefits may not apply
any financial requirement or treatment limitation to mental health or substance use disorder benefits in any
classification that is more restrictive than the predominant financial requirement or treatment limitation of that
type applied to substantially all medical/surgical benefits in the same classification. Whether a financial
requirement or treatment limitation is a predominant financial requirement or treatment limitation that applies to
substantially all medical/surgical benefits in a classification is determined separately for each type of financial
requirement or treatment limitation.
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Substantially all - two-thirds
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Predominant – more than half
NQTLs – or nonquantitative treatment limitations. Within the 6 categories, is the NQTL comparable to, and are
analysis factors applied no more stringently than, the processes, strategies, evidentiary standards, or other
factors used in applying the limitation with respect to medical/surgical benefits in the same classification…
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Examples of NQTLs include medical management techniques, such as prior authorization, formulary design
for prescription drugs, standards for provider admission, and provider reimbursement rates
Finally, If a plan provides MH or SA disorder benefits in any classification of benefits, MH or SA benefits must be
provided in every classification in which med/surg benefits are provided.
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Example 5. (i) Facts. A plan generally covers medically appropriate treatments.
In
determining whether prescription drugs are medically appropriate, the plan
automatically excludes coverage for antidepressant drugs that are given a
black box warning label by the Food and Drug Administration (indicating the
drug carries a significant risk of serious adverse effects). For other drugs with a
black box warning (including those prescribed for other mental health
conditions and substance use disorders, as well as for medical/surgical
conditions), the plan will provide coverage if the prescribing physician obtains
authorization from the plan that the drug is medically appropriate for the
individual, based on clinically appropriate standards of care.
(ii) Conclusion. In this Example 5, the plan violates the rules of this paragraph
(c)(4).
Although the standard for applying a nonquantitative treatment limitation is the
same for both mental health and substance use disorder benefits and
medical/surgical benefits – whether a drug has a black box warning – it is not
applied in a comparable manner. The plan’s unconditional exclusion of
antidepressant drugs given a black box warning is not comparable to the
conditional exclusion for other drugs with a black box warning.
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Example 6. (i) Facts. An employer maintains both a major medical
plan and an employee assistance program (EAP). The EAP provides,
among other benefits, a limited number of mental health or substance
use disorder counseling sessions. Participants are eligible for mental
health or substance use disorder benefits under the major medical
plan only after exhausting the counseling sessions provided by the
EAP. No similar exhaustion requirement applies with respect to
medical/surgical benefits provided under the major medical plan.
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(ii) Conclusion. In this Example 6, limiting eligibility for mental health
and substance use disorder benefits only after EAP benefits are
exhausted is a nonquantitative treatment limitation subject to the
parity requirements of this paragraph (c). Because no comparable
requirement applies to medical/surgical benefits, the requirement
may not be applied to mental health or substance use disorder
benefits.
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Example 9. (i) Facts. A plan generally covers medically appropriate
treatments. The plan automatically excludes coverage for inpatient
substance use disorder treatment in any setting outside of a hospital
(such as a freestanding or residential treatment center). For inpatient
treatment outside of a hospital for other conditions (including
freestanding or residential treatment centers prescribed for mental
health conditions, as well as for medical/surgical conditions), the plan
will provide coverage if the prescribing physician obtains authorization
from the plan that the inpatient treatment is medically appropriate for
the individual, based on clinically appropriate standards of care.
(ii) Conclusion. In this Example 9, the plan violates the rules of this
paragraph (c)(4). Although the same nonquantitative treatment
limitation – medical appropriateness – is applied to both mental
health and substance use disorder benefits and medical/surgical
benefits, the plan’s unconditional exclusion of substance use disorder
treatment in any setting outside of a hospital is not comparable to the
conditional exclusion of inpatient treatment outside of a hospital for
other conditions.
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The Departments rejected a request to base the definitions of MH and SA on solely state
law – a combination of state and federal will be used.
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Plans which have copays for office visits and coinsurance for all other outpatient services
are acceptable.
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Plans still may not split between generalists and specialists for parity purposes.
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Newer health plan structures which have tiers (such as preferred in-network) are
permissible so long as the tiering is based on reasonable factors without regard to
med/surg, MH or SA.
Departments rejected pairing specific pairings for parity – e.g. physical rehab with SA
disorder rehab.
Parity analysis need not be done annually unless there has been a change within the plan
regarding benefit design, cost-sharing structure, or utilization affecting financial
requirements or treatment limitations.
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Clinically recognized standard of care exception for NQTLs from the interim rule was
deleted – too confusing.
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The criteria for medically necessary determinations must be made available by the plan to
any current or potential participant, beneficiary or contracting provider upon request.
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The Departments declined to specifically address specific NQTLs (such as prior authorization), instead
stating that all NQTLs should follow the same rules.
The specific scope of services is not defined. The Departments did not intend to mandate, or exclude,
certain levels of care. The Departments prefer to defer to States to define the package of benefits for
essential health benefits. For example, intermediate benefits would be examined within the six categories
just as all other benefits.
Traditionally the rule has used 50+ employees to determine applicability, but the preamble has a long
discussion about different laws using 50 or 100.
In February 2013 HHS published a final essential health benefit regulation that requires all nongrandfathered plans in the individual and group markets to cover all EHBs, including MA and SA. No more
end-runs to avoid? Moreover, this EHB requirement applies to employers smaller than 50 employees.
Cost exemption still exists, but no employer has used it in the three years of the MHPAEA. When
determining costs, a plan or issuer must rely on actual claims or encounter data. There are provisions
detailing administrative costs for these calculations.
Plans cannot put MH/SA in one plan, and med/surg in a different plan. The plans will be combined for
analysis for parity compliance. And combining is necessary to prevent evasion. Coverage as a whole must
be compliant.
Coverage for specific conditions is not mandated - the provision of benefits for one mental health condition
does not require the provision for other conditions or disorders.
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The same NQTLs do not need to be used for MH/SA vs med/surg, only
that the processes, strategies, evidentiary standards and other
factors to determine whether a benefit is subject to an NQTL are
comparable and applied no more stringently. Disparate results alone
do not mean that the NQTL in use is inappropriate.
Example 2. (i) Facts. A plan applies concurrent review to inpatient
care where there are high levels of variation in length of stay (as
measured by a coefficient of variation exceeding 0.8). In practice, the
application of this standard affects 60 percent of mental health
conditions and substance use disorders, but only 30 percent of
medical/surgical conditions.
(ii) Conclusion. In this Example 2, the plan complies with the rules of
this paragraph (c)(4) because the evidentiary standard used by the
plan is applied no more stringently for mental health and substance
use disorder benefits than for medical/surgical benefits, even though
it results in an overall difference in the application of concurrent
review for mental health conditions or substance use disorders than
for medical/surgical conditions.
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Self-funded plans are not specifically covered by MHPAEA.
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Retiree only plans (2 active employees max) are also still exempted.
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Employee assistance programs ARE covered, and are subject to NQTL analysis.
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Medicaid and CHIP are not covered, and are still governed by the January 2013 CMS letter (See
http://www.medicaid.gov/Federal-Policy-Guidance/downloads/SHO-13-001.pdf. These ARE still covered by
MHPAEA, just not by this final rule. CMS claims that it will be providing additional guidance.
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The prior understanding about federal law superseding state law remains unchanged. Narrowest preemption
is intended.
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States have primary enforcement authority over health insurance issuers. CMS currently believes that most
states have authority to enforce MHPAEA. It is not clear who the lead state agency is.
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Multiple studies have shown that plans and states have been implementing all portions of MHPAEA and that
there have been little to no demonstrated negatives in terms of costs or employers dropping MH/SA
benefits. For example, nearly all plans had eliminated separate deductibles by 2011.
MHPAEA has caused coverage changes for approximately 103 million people in 420,700 ERISA plans, and
29.5 million people in 23,000 public, non-federal plans. The ACA extends MHPAEA to 11 million people in
the individual market. Other secondary benefits may be decreased bankruptcies (10% of medical
bankruptcies are for MH costs, with another 2-3% from SA), a possible decrease in SSDI entrants, increased
workplace productivity (from decreasing the workplace effects of depression, estimated to cause $31-$51
billion annually).
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When does state have primary enforcement?
When do these parity regulations apply, and
when do other regulations apply (Medicaid, CHIP,
Medicare, EHBs, etc….)?
Need more clarity regarding the January 2013
CMS letter regarding Medicaid and CHIP.
How do state definitions and federal definitions
co-exist?
What is role of SMHA? Subject matter expert?
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Numerous FAQs, which are added on a continuous basis. These include:
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FAQ About Mental Health Parity and Addiction Equity Act, available at http://www.dol.gov/ebsa/faqs/faq-mhpaea.html
See FAQs about Affordable Care Act Implementation (Part V)and Mental Health Parity Implementation, available at
http://www.dol.gov/ebsa/faqs/faq-aca5.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs5.html
FAQs about Affordable Care Act Implementation (Part VII) and Mental Health Parity Implementation, available at
http://www.dol.gov/ebsa/faqs/faq-aca7.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs7.html#Mental Health Parity and Addiction Equity Act of 2008
FAQs about Affordable Care Act Implementation (Part V) and Mental Health Parity Implementation, questions 8-11, available at
http://www.dol.gov/ebsa/faqs/faq-aca5.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs5.html
FAQs about Affordable Care Act Implementation (Part VII) and Mental Health Parity Implementation, questions 2-6, available at
http://www.dol.gov/ebsa/faqs/faq-aca7.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs7.html#Mental Health Parity and Addiction Equity Act of 2008
FAQs about Affordable Care Act Implementation (Part VII) and Mental Health Parity Implementation, question 7, available at
http://www.dol.gov/ebsa/faqs/faq-aca7.html and http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/aca_implementation_faqs7.html#Mental Health Parity and Addiction Equity Act of 2008
FAQ issued concurrently with final rule: http://www.dol.gov/ebsa/healthreform/ and http://www.cms.gov/cciio/Resources/FactSheets-and-FAQs/index.html.
ASPE Study. “Analyses presented in this report show that employers and health plans have made substantial changes to their plan designs
in order to meet the standards set out by MHPAEA and the IFR. By 2011, ERISA-governed group health plans and health insurance offered
in connection with group health plans seem to have removed most financial requirements that did not meet MHPAEA standards. Nearly all
had eliminated the use of separate deductibles for MH/SUD treatment and medical/surgical treatment, although few were in use prior to
the MHPAEA IFR. The number of plans that apply unequal inpatient day limits, outpatient visit limits or other QTLs for MH/SUD has
dropped substantially, though a minority persist with limited, unequal MH/SUD benefits.”
http://aspe.hhs.gov/daltcp/reports/2013/mhpaeAct.shtml.
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Justin C Harding
Senior Policy Associate
NASMHPD
703-682-5182
Justin.Harding@NASMHPD.org
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