In 2008, Congress passed mental health parity laws, which prohibit health insurance companies from imposing excessive costs and undue restrictions on coverage for mental health services.^[1] In particular, the law prevents health insurance companies from limiting access to mental health care more than access to other medical treatments.^[2] During Congressional debates, lawmakers cast this proposal as a civil rights law that grants widespread access to essential care.^[3]  Yet, insurance companies are still restricting access to treatment for mental health conditions far more than they restrict other care. On average, mental health practitioners are four-times as likely to be out-of-network, and therefore not covered by insurance, than medical doctors.^[4] Facing inadequate access to insurance coverage for their mental health needs, about half of the 60 million Americans who seek mental health care cannot access treatment.^[5] This article discusses how the structure of mental health parity statutes prevent the law from fulfilling its basic promise and urges the Federal government to reform its approach and better address the nation’s mental health needs.

The mental health parity statute is flawed because it compares restrictions on mental health care to restrictions on treatments for physical conditions without accounting for the difference between the two. According to the law, health insurance cannot impose higher out of pocket costs or more restrictive conditions on treatment for mental health care than for physical health care.^[6]

This rule of comparison can be effective for improving mental health care coverage when insurance companies place quantifiable treatment limitations on medical and mental health benefits.^[7] For example, an insurance company may apply a $1200 deductible on all visits to a GP, meaning that a patient must pay $1200 towards their care before insurance will start covering such treatment.^[8] Parity laws prevent the same insurance plan from imposing a $1201 deductible on visits to a therapist’s office, because such a deductible would restrict mental health care more than medical care.^[9]  Regulators, and perhaps even insured patients, can easily make this dollar-to-dollar comparison and know when insurance restricts mental health care more than physical health care.^[10]

However, these comparisons fail to prevent excessive restrictions on mental health care when insurers employ non-quantifiable treatment limitations to restrict mental health benefits.^[11] Such limitations are not measurable using numbers but employ subjective judgments to dictate coverage decisions.^[12] For example, health plans develop medical necessity criteria that consider professional standards of practice, cost of a procedure, and patient safety, to determine whether procedures are imperative to cure an ailment.^[13] A health plan would consider heart surgery medically necessary if someone was experiencing a heart attack, and may cover a stay in a psychiatric hospital for someone experiencing psychosis.^[14]

Rather than prevent excessive limits on mental health care, the mental health parity law can unduly restrict access to care when allowing non-quantifiable treatment limitations that are equivalent to those imposed on physical health care. A judge ruling in a major class-action lawsuit found that United Behavioral health deems mental health treatment medically necessary when stabilizing crises but not when treating underlying conditions. ^[15] Other insurers have repeated this practice which may suffice for many acute medical conditions but will rarely ensure adequate mental health care. ^[16] Those suffering from anorexia nervosa or bipolar disorder will require a lifetime of care to handle chronic illnesses, even after their conditions stabilize.^[17] One insurance company denied treatment for an individual suffering from anorexia because she had gained ten pounds. ^[18] A father sued UnitedHealth for denying his son’s therapy sessions after the son’s suicidal thoughts temporarily subsided. The thoughts later returned, and the son committed suicide.^[19] These tragic circumstances demonstrate that insurance companies cannot be allowed to apply medical necessity criteria for medical conditions into mental health care determinations.

A patchwork approach to regulation further hampers enforcement of these complex parity laws.^[20] Different federal and state agencies have enforcement jurisdiction over different health plans. The Department of Labor monitors large employers,^[21] the Department of Health and Human Services has jurisdiction over Obamacare plans and those sponsored by state and local governments,^[22] yet States are responsible for other plans.^[23] This confusing regulation scheme means that many violations go undetected.^[24]

Parity laws are additionally complicated by the modern reality of health insurance companies subcontracting mental health care. By 2007, 72% of private health plans subcontract the management of their mental benefits to either subsidiaries or third parties, up from 58% in 1999.^[25] Lawmakers are concerned that complex subcontracting arrangements prevent insurance companies from monitoring and comparing the limitations that plans place on physical and mental health care.^[26]

California recently enacted parity laws^[27] that could serve as a model for revisions to Federal laws that are in dire need of reform. The California law defines “medical necessity” and sets clear guidelines for insurance companies without relying on unworkable comparisons with medical benefits.^[28] Federal laws should incorporate this definition and create better definitions of other non-quantifiable treatment limitations. Definitive standards should allow consumers, regulators, and even insurance companies to better monitor whether health plans guarantee adequate mental health care. The California law also requires health insurers to improve their disclosure and internal compliance mechanisms to ensure that medical necessity and other processes for approving coverage are compliant with parity laws.^[29] This requirement could improve oversight of health insurance companies even when complicated contractual arrangements obscure their practices. Federal lawmakers should similarly make health insurance companies more responsible for ensuring their subcontractors and subsidiaries are compliant with parity laws. These actions are important steps towards the promise of mental health care for all.

[1] See The Mental Health Parity and Addiction Equity Act (MHPAEA), Ctrs. for Medicare & Medicaid Serv., https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-Insurance-Protections/mhpaea_factsheet (last visited Apr. 12, 2021).

[2] See Comm. Catalyst & Health L. Advocates, Mental Health Parity: The Basics (2015), https://www.communitycatalyst.org/resources/publications/document/Parity-Basics-FINAL.pdf?1431528928.

[3] Colleeen Barry et al., A Political History of Federal Mental Health and Addiction Insurance Parity, 88 Milbank Q. 404, 415 (2010), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2950754/.

[4] See The Doctor is Out, Nat’l All. on Mental Illness, https://www.nami.org/Support-Education/Publications-Reports/Public-Policy-Reports (Click “The Doctor is Out” in the left drop down under “Public Policy Reports”) (last visited Apr. 12, 2021).

[5] Id.

[6] Comm. Catalyst & Health L. Advocates, Mental Health Parity: The Basics (2015), https://www.communitycatalyst.org/resources/publications/document/Parity-Basics-FINAL.pdf?1431528928.

[7] See Sarah Goodell, Mental Health Parity, Health Affairs (Apr. 3, 2014), https://www.healthaffairs.org/do/10.1377/hpb20140403.871424/full/.

[8] Deductible, HealthCare.Gov, https://www.healthcare.gov/glossary/deductible/ (last visited Apr. 27, 2021).

[9] MaryBeth Musumeci, Behavioral Health Parity and Medicaid, Kaiser Fam. Found. (Jun. 2, 2015), https://www.kff.org/report-section/behavioral-health-parity-and-medicaid-issue-brief/.

[10] See Sarah Goodell, Mental Health Parity, Health Affairs (Apr. 3, 2014), https://www.healthaffairs.org/do/10.1377/hpb20140403.871424/full/.

[11] See Goodell, supra note 12.

[12] U.S. Dep’t of Health & Human Serv., Warning Signs- Plan or Policy Non-Quantitative treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance, https://www.cms.gov/cciio/resources/regulations-and-guidance/downloads/mhapeachecklistwarningsigns.pdf (last visited Apr. 12, 2021).

[13] See U.S. Dep’t of Health & Human Serv., (SMA) 03-3790, Medical Necessity in Private Health Plans: Implications for Behavioral Health Care 3 (2003), https://publichealth.gwu.edu/departments/healthpolicy/DHP_Publications/pub_uploads/dhpPublication_3A45C497-5056-9D20-3DAA24F165B5678A.pdf.

[14] See Id.

[15] Joseph E. Laska, Level-of-Care Criteria Ruled Inconsistent with Accepted Medical Standards, Manatt (Apr. 17, 2019), https://www.manatt.com/insights/newsletters/health-update/level-of-care-criteria-ruled-inconsistent.

[16] Graison Dangor, Legal Promise of Equal Mental Health Treatment Often Falls Short, Kaiser Health News (Jun. 7, 2019), https://khn.org/news/legal-promise-of-equal-mental-health-treatment-often-falls-short/; Gold, supra note 7.

[17] Dangor, supra note 19.

[18] Dangor, supra note 19.

[19] Gold, supra note 7.

[20] Ali Shana, Mental Health Parity in the US: Have We Made Any Real Progress?, Psychiatric Times (June 17, 2020), https://www.psychiatrictimes.com/view/mental-health-parity-in-the-us-have-we-made-any-real-progress.

[21] Id.

[22] April Banerjee & Steven Bruce, Ten Years Later, Abysmal Enforcement of Mental Health Parity Laws, People with Disabilities Found. (2018), http://www.pwdf.org/mental-health-parity-enforcement/.

[23] Shana, supra note 23.

[24] Shana, supra note 23.

[25] See Richard G. Frank & Rachel L. Garfield, Managed Behavioral Health Care Carve-Outs: Past Performance and Future Prospects, 28 Ann. Rev. of Pub. Health 303, 304 (2007).

[26] Press Release, S. Comm. on Fin., Wyden Asks Federal Watchdog to Investigate Mental Health Services Contracts Among Insurance Companies (May 28, 2020), https://www.finance.senate.gov/ranking-members-news/wyden-asks-federal-watchdog-to-investigate-mental-health-services-contracts-among-insurance-companies.

[27] Yuki Noguchi, California Poised to Strengthen Mental Health Insurance Laws, Nat’l Pub. Radio (NPR) (Sept. 1, 2020, 3:13 PM), https://www.npr.org/sections/health-shots/2020/09/01/908017806/california-poised-to-strengthen-mental-health-insurance-laws.

[28] See Nathaniel Cohen et al., CA  Approves New Parity Law Expanding Coverage Obligations for Mental Health SUD Treatment, JD Supra (Sept. 29, 2020), https://www.jdsupra.com/legalnews/ca-approves-new-parity-law-expanding-98916/.

[29] See Id.