Insurers not providing sufficient evidence of parity act compliance

Insurers’ compliance with the Mental Health Parity and Addiction Equity Act of 2008 is largely dependent on consumers reporting potential violations to state regulators. An analysis conducted by a recently formed coalition of not-for-profit organizations in the addiction treatment field finds that consumers and regulators alike are receiving insufficient documentation from insurers to determine whether their coverage is meeting such standards.

The National Center on Addiction and Substance Abuse, the Legal Action Center, Partnership for Drug-Free Kids, and the Treatment Research Institute have formed the Addiction Solution Campaign (ASC), a collaboration designed to increase access to effective prevention, treatment and long-term recovery for substance use disorders.

“Anecdotally for many years, it has been apparent that it’s very difficult for consumers and regulators to find out what’s actually covered in plans for substance use disorders and mental health, and whether that complies with the parity act,” says Paul Samuels, director and president of the Legal Action Center and spokesperson for the ASC.

The ASC completed an analysis of publicly available documents for seven major health plans offered in 2015 and 2016 in small and large group markets in New York and Maryland. The key takeaways from the report are that, due in large part to a lack of transparency in information provided by insurers:

• Consumers are not being provided with sufficient information to determine the treatment benefits for which they are eligible and the barriers that exist to accessing such benefits. Five of seven plans reviewed have not made evident from either their insurance contract or schedule of benefits that their plans covered all critical substance use disorder treatment benefits.
• State regulators are not receiving adequate information to determine parity act compliance before approving plans to be sold to consumers. For all seven plans reviewed, insurers failed to provide state regulators with sufficient information to confirm that their policies were parity act-compliant.

 “What we were able to do in this study is to confirm through rigorous analysis that those problems are real,” Samuels says. “Neither regulators nor consumers can get the complete information they need about what substance use disorder and mental health coverage there is. The corollary of that is if neither regulators nor consumers can figure out in any kind of complete way what is covered, then it’s impossible for either the regulators or consumers to determine whether there are violations of the parity law.”

To that end, the ASC has called on insurers to submit a “Parity Transparency and Compliance Report” to state regulators documenting that they meet the parity act’s standards. Currently, reviews of plans by regulators vary by state. More specifically, the ASC recommends:

• Before health plans are approved to be sold to consumers, insurers should be required to submit to regulators internal analyses to demonstrate plans’ parity compliance.
• Regulators should evaluate the scope of plans’ prescription drug coverage for mental health and substance use disorder treatment and utilization management requirements.
• Regulators should develop model contracts that fully describe mental health and substance use benefits, align standards with Parity Act requirements, and inform consumers of their legal rights.
• Regulators should work to improve providers’ capabilities to identify potential parity act violations.

“Right now, we have a system that is mostly driven by complaints after the fact by consumers who may not even realize whether there was a violation at all,” Samuels says. “Consumers are not in a good position to understand what’s covered, nor are the regulators. We want to move the process forward so that consumers can understand right up front what’s covered and whether that is parity act-compliant and regulators can determine whether plans are compliant before they go out to the market for consumers to purchase.”