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Expanding Medicaid benefits for improved behavioral health care, substance abuse treatment

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Q. On April 15, 2015, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA). How has the MHPAEA developed since it was first enacted and what are the major implications of the newly proposed rule?

Q. On April 15, 2015, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA). How has the MHPAEA developed since it was first enacted and what are the major implications of the newly proposed rule?

A. In an effort to provide more comprehensive and “equal” coverage of mental health care across the U.S. patient population, in September of 1996, Congress enacted the Mental Health Parity Act (MHPA), which required that health plan coverage limits for mental health could not be lower than those stipulated for medical and surgical coverage. The law applied to larger, employer-sponsored group health plans with at least 50 employees who offered mental health care coverage.


To further expand behavioral health care access, the passage of the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) extended mental health coverage parity to treatment limitations, such as number of visits, and financial requirements, including patient co-pays and deductibles. But perhaps most importantly, the 2008 MHPAEA applied parity to the treatment of substance use disorders (SUD), a facet of behavioral health care not previously covered under the MHPA of 1996. Additionally, provisions through the 2010 Affordable Care Act extended parity requirements for qualified health plans available on the individual and small group marketplaces as well. The ACA defined coverage of mental health and SUD treatment as one of the ten essential health benefits (EHBs), and as a result, all health insurance plans in the individual and small-employer market must include coverage for the treatment of mental health and SUD.


Building on the foundation of the 1996 MHPA, 2008 MHPAEA, and updates from the ACA, the recently proposed rule seeks continued expansion of parity provisions for mental health and SUD to Medicaid plans. Specifically, the rule seeks to expand parity to Medicaid managed care organizations (MCOs), Medicaid alternative benefit plans, and the Children’s Health Insurance Program. As was the case in both 1996 and 2008, while the MHPAEA proposed rule does not require that all plans cover mental health and SUD, it does mandate that the coverage benefits — including any financial or treatment restrictions — be equal to that of medical/surgical benefits if they are offered.

Additionally, per the proposed rule, MCOs must submit contracts to the Centers for Medicare and Medicaid Services (CMS) that demonstrate compliance with parity requirements, regardless of how their beneficiaries are receiving care. In other words, states must demonstrate parity adherence even if their enrollees receive care through entities other than MCOs. This aspect of the proposed rule means states retain the flexibility to use multiple delivery systems beyond just MCOs to provide Medicaid services while ensuring all beneficiaries are protected under the parity provisions.

Q. Why are mental health and substance use disorders (SUD) parity laws so important in today’s health care landscape?

A. When looking at the costs associated with behavioral health care for the U.S. patient population — both direct and indirect — and the resulting impact on a patient’s quality of life, it is clear that our country must take action to ensure patients can afford the high quality behavioral health care they need and deserve.  

In 2013, the Substance Abuse and Mental Health Services Administration reported that approximately 10.6 million people identified as having an unmet behavioral health care need, and approximately 20 million people had unmet substance abuse treatment needs. Furthermore, a 2014 report by consulting and actuarial firm Milliman, commissioned by the American Psychiatric Association (APA), cites that health care costs are 2 to 3 times higher for those suffering from chronic or comorbid mental health and SUD conditions (versus those without). These costs are not sustainable for patients nor the health care ecosystem as a whole.

The Milliman and APA report also cites that although just 14 percent of insured Americans (either through commercial plans or Medicare and Medicaid) are receiving treatment for mental health needs or SUD, these patients actually account for more than 30 percent of total health care spending in the U.S. Now more than ever, patients need care options that are both effective and affordable, and the country is moving in the right direction to ensure that is the case.

By truly integrating behavioral health into the care continuum, providers can work together to ensure they are delivering the highest quality, most holistic care possible, treating all aspects of a patient, including those that fall under the behavioral health umbrella. In conjunction with the ACA, the MHPAEA is already providing new and expanded behavioral health benefits to approximately 62 million Americans, including the creation of community and state-based programs focused on preventative care and wellness promotion. And through legislation that aims to further establish uniformity and continuity of mental health and SUD coverage, such as that in the proposed rule, the U.S. health care system can continue to close the treatment gap and improve the lives of millions of Americans both now and in the future. 

Cynthia Telles is the director of the Spanish-speaking Psychosocial Clinic of the Neuropsychiatric Institute and Hospital at UCLA, she is also an associate clinical professor at the university. She provides training and hosts comprehensive mental-health services to the community. Cynthia Telles has also been on the board of Kaiser Foundation Hospitals and Health Plans for over 10+ years.

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