the PowerPoint

Parity & Equity (MHPAEA)
Compliance Checker
Disputing the Decisions that Affect Your Bottom-Line
Patrick Gauthier, Director
Parity & Equity
• Federal parity law applies only to insurers who
choose to cover mental health and substance use
disorder services, and then it only applies to certain
plan types.
• However, federal parity law does not mandate the
coverage of mental health and substance use
disorder services.
 As patient presents at point of registration,
correlating their coverage and benefits with plan
types required to comply.
Mental Health Parity and
Addiction Equity Act of 2008
• Federal mental health parity law addresses the
terms under which mental health and substance
use disorder services are covered in comparison
with medical and surgical services in those plans
that choose to offer coverage of these services.
• Federal law requires parity in
annual and aggregate lifetime limits,
treatment limitations (days, visits),
financial requirements (co-pay and deductible), and
in- and out-of-network covered benefits.
• Determining:
Annual and lifetime maximum across all medical
 Determining whether or not there is a separate behavioral
health deductible
 Identifying whether or not the plan has differential co-pay
in place for primary care vs. behavioral health
 Determining how day and visit limitations are applied in
medical conditions and discerning whether those limits in
cases of behavioral health are applied more stringently
 Determining scope and nature of out-of-network benefits
where primary care and behavioral healthcare are
MHPAEA and Non-Quantifiable
Treatment Limitations
Non-quantitative treatment limitations include medical
management, network inclusion process and standards, step
therapy (fail first), and establishment of Usual, Customary and
Reasonable rates of reimbursement.
Processes, strategies, evidentiary standards, or other factors used
in applying the non-quantitative treatment limitations to MH/SUD
benefits to MH/SUD in a classification are comparable to and
applied no more stringently than what is applied to
medical/surgical benefits except to the extent that recognized
clinically appropriate standards of care may permit a difference.
• Determining:
 Whether or not network admission requirements are more
stringent for Behavioral health providers than they are for
primary care
 Determining whether or not a fail-first policy (at a lower
level of care) is in place
 Identifying whether or not the plan uses discriminatory
methods for establishing rates of reimbursement
 Determining whether or not medical necessity guidelines
are applied more stringently
 Gaining access to standards and justification used when
UM staff reach an adverse determination
Parity & Equity
• Applies to both large fully insured and large selfinsured plans.
• In addition, it applies to Medicaid managed care
plans and to Children’s Health Insurance Program
(CHIP) plans.
• The ACA builds on federal parity law by expanding
its applicability to a number of additional plan
• Coverage:
 Large fully-insured?
 Large self-insured?
 Large self-insured though exempt by virtue of being a nonfederal public employee plan?
 Small group?
 Individual policy?
 Medicaid traditional fee-for-service?
 Medicare?
Illinois Parity Law
o The new law requires medical necessity
determinations to be made in
accordance with appropriate patient
placement criteria established by the
American Society of Addiction
Medicine (ASAM).
• DHS Providers
o The Illinois law specifically identifies, by
name, community-based providers,
licensed or certified through the Illinois
Department of Human Services in
accordance with the Illinois Alcoholism
and other Drug Abuse and
Dependency Act.
Illinois Parity Law
• Residential/Sub-Acute
Inpatient - Additionally, in a
significant victory for
Illinoisans and their
providers, the law identifies
inpatient treatment services
under the definition of
inpatient treatment,
requiring parity in
Affordable Care Act
(ACA) and Parity
• Specifically, the ACA includes provisions that require
(1) compliance with federal parity law by certain
plans and (2) the coverage of mental health and
substance use disorder services by certain plans.
ACA and Parity
• The ACA does not change the federal mental
health requirements at all. However, it extends
applicability of these requirements to three new
plan types:
o (1) Qualified Health Plans (QHPs, offered through the state
o (2) plans offered through the individual market; and
o (3) Medicaid benchmark and benchmark equivalent plans
that are not managed care plans.
ACA and Essential Health
Benefits (EHB)
• The ACA also requires certain plans to offer
coverage of mental health and substance use
disorder services, by requiring these plan types to
cover the Essential Health Benefits (EHB), which are
defined to include mental health and substance
use disorder services.
• The ACA does not require that specific mental
health and substance use disorder services be
included as part of the EHB.
• The specific services and items that will be a part of
the EHB will be determined through the rulemaking
process at the state level with federal guidance.
• ACA Section 1302(b) requires the essential health benefits to
include, at a minimum, services and items in the following 10
(1) Ambulatory patient services.
(2) Emergency services.
(3) Hospitalization.
(4) Maternity and newborn care.
(5) Mental health and substance use disorder services, including
behavioral health treatment.
(6) Prescription drugs.
(7) Rehabilitative and habilitative services and devices.
(8) Laboratory services.
(9) Preventive and wellness services and chronic disease
(10) Pediatric services, including oral and vision care.
Parity in Exchanges
• The ACA requires the establishment of Exchanges,
health insurance marketplaces where individuals
and employers may purchase health insurance.
• Plans offered in the Exchanges, the QHPs, must
meet a number of requirements, including
compliance with federal parity law.
Parity in Exchanges
• ACA requires all QHPs to comply with federal parity
law in the same manner, and to the same extent,
that health insurance issuers and group health plans
must comply with these requirements.
• QHPs will be provided through both the small group
and individual markets and may also be offered
outside of an Exchange.
• In addition, the ACA requires plans offered through
the individual market to comply with federal parity
• ACA doesn’t take full effect in terms of expanded
coverage (Health Insurance Exchange and
Medicaid expansion) until 2014
• Presidential election in November
Exempt from Parity?
• Fully insured and self-insured small plans appear to
be exempt from compliance with federal parity
• In addition, federal parity law does not apply to
traditional fee-for-service Medicaid or to traditional
fee-for-service Medicare
• Federal parity law contains an exemption for any
group health plan (either fully insured or self-insured)
of a small employer (employers with between 2 and
50 employees).
• In cases where states consider “groups of one” to
be small employers, the exemption extends to those
groups of one as well.
• The ACA did not amend the small employer
exemption, and therefore it appears to remain in
• However, we can expect many of those covered
individuals to procure coverage through the
Exchange in the future in which case Parity will
Parity in Coverage
Coverage/Plan Type
to Comply
Large Fully-Insured
 Yes
Large Self-Insured
 Yes
Small Fully-Insured
NEW Requirement
Established by ACA
Yes, if sold as QHP
through Exchange
Small Self-Insured
 Yes, if sold as QHP through
Individual Plans
Health Insurance Exchange Qualified Health
Plans (QHP)
 Yes
 Yes
Traditional Medicaid (fee for service (FFS))
Medicaid Managed Care (MC)
 Yes
Medicaid Expansion Benchmark Plans (FFS)
 Yes
 Yes
Medicaid Expansion Benchmark Plans (MC)
 Yes
 Yes
Medicare FFS
 Yes
• Establishing nature and scope of coverage at
Appeals Protections
• The Mental Health Parity and Addiction Equity Act
of 2008 (Parity) guarantees patients and providers
access to the medical necessity guidelines used by
managed care entities that deny coverage
• The Patient Protection and Affordable Care Act of
2010 (Reform) assures patients and providers of fair,
professional, and unbiased review of their appeals
and grievances via an external or third-party
reviewer should the appeal process necessitate
escalation. The law affects all new plans beginning
on or after September 23, 2010
Denials in Context
Denials of reimbursement can occur
for administrative and/or medical
necessity reasons at the time of
claims adjudication/processing
Denials of coverage and/or benefits can occur at
various Utilization Management or UR junctures
throughout the episode
Denials and
• Important Distinction: Insurers may refuse access to
benefits and reimbursement, but do not deny access to
treatment. Only a provider can do that. Insurers simply don’t
pay in the case of denied benefits.
• Common Types of Denials:
o Administrative - patient or provider failed to follow plan
rules and broke with required processes. Can include
o Policy: plan has pre-determined exclusions and
limitations on reimbursable procedures and providers
o Clinical - plan deems recommended treatment is
inconsistent with generally-agreed upon standards and
Administrative Denials
• The majority of claims denied reimbursement are
denied based on administrative reasons
o Missing information
o Inaccurate information
o Time span issues (dates of services,
o Ineligible patient, service or provider
o Coding errors with diagnosis, patient identifier
#, NPI (provider identifier), procedure code
Policy-Based Denials
• Plans’ policies – ideally aligned with State and
Federal laws – are found in their documentation,
on their web site, and in the Provider Manual.
• Policies will describe requirements for utilization
review, financial and service limitations, billing
procedures, and other aspects of the benefits
such as drug formularies.
• Policies will also define those services and
providers that are specifically excluded from
• Your Best Defense: READ plan policies, manuals
and newsletters. Develop summaries of key points
for clinical and relevant administrative staff
Clinical Denials
When a plan doesn’t concur with admission or
treatment based on its understanding,
interpretation of, and application of medical
necessity standards and guidelines, it’s quite
possible that one or more things are going on:
The denial is justified and will be upheld
The provider’s request for coverage is flawed
The reviewer’s judgment or interpretation is flawed
The plan rules are out of step with the law
The guidelines are out of step with reasonable,
community, and professional standards for the practice of
mental health and substance use disorder treatment
First Things First
• Establish the following before proceeding:
 The request for treatment coverage is/isn’t sound and
consistent with plan rules and generally-accepted
professional standards for medical necessity
 The plan reviewer’s clinical and/or procedural judgment
is/isn’t inconsistent with the law and/or generallyaccepted professional standards for medical necessity
 Plan’s rules and policies are/are not consistent with
Federal and State laws, rules and regulations
 Plan’s medical necessity and level of care guidelines
are/are not consistent with generally-accepted standards
Part 2: The Appeals Process
Appeals can and should be made by patients
and providers but not by both at the same time.
Your patients will need your guidance and tools
when making appeals. You may want to
dedicate resources and develop patient tools
such as template letters.
Important Stakeholders Include:
1. The plan’s Customer Service department,
Utilization Reviewers’ supervisors, the Medical
Director and Director of Appeals and Grievances
2. Insurance Agents and Brokers representing the
patient’s employer
3. The Department of Insurance (Commissioner) in
your state
Appealing Decisions
Three Levels
1. Level One (internal)
2. Level Two (internal, escalated to medical director)
3. Level Three (external review)
Expediting Appeals: Appeals can move more quickly (1) if
the patient is in the hospital or (2) if the service has not yet
been provided.
Emergent/Urgent Appeals (concerning the life and wellbeing
of the patient will be “fast-tracked” by the plan in order
to respond within 1-3 days depending upon
circumstances. If the need is emergent or urgent, use this
mechanism and be sure to let the plan know.
Appealing Decisions
• Plans must provide written appeals instructions.
• Third-level appeals may be heard by a panel
consisting of other providers and professionals
requiring you to appear before them to make your
• Third-level appeals may be reviewed by a qualified
medical professional assigned by the state.
• Some plans in some states may require arbitration
to settle disputed appeals
External Review
• Under the new Federal law, plans will have
o Allow claimants the opportunity to request an
external review within four months of adverse
o Complete a preliminary review within 5 days
• That claimant is/was covered by the plan
• That claimant exhausted internal processes
• That claimant provided all necessary information
Then, within 1 day, the plan must indicate to the claimant
whether the appeal meets criteria for external review. If
information is missing, the plan must enable the
claimant by providing instructions and time to re-submit
the appeal correctly.
Once the claim is deemed appropriate for external
review, the plan will forward it within 5 days to an
Independent Review Organization (IRO) for their review.
The IRO has 45 days.
External Review
• External Review (3rd level appeals) almost always
require that the dispute concern the medical
necessity of services
• Also, External Review cases almost always require
that services have been provided
Fast Facts
• Experts agree that claims denials represent 15%20% of your revenue
• More than 50% of appeals are won by patients
and providers
• Residential, Partial, IOP and services that exceed
15-20 visits are among the most often denied for
Appeals Processes
 Coordinate with patient. Only one of you should
 Note the kind of insurance coverage the patient
is covered by (fully-insured, self-insured plan,
individual policy, etc.) as some of these are
exempt from parity, for instance.
 Request and review plan policies and other
documentation (be prepared!)
 Request and review the medical necessity
criteria used by the plan to arrive at their
 Request and review the specific justification for
the denial. Does it align with the plan’s criteria?
Appeals Processes
 Document the name and telephone number of
the individual you spoke with and note date and
time. Ask if they are recording the call and make
a note of the answer.
 Keep all correspondence including email
 Verify that pre-authorization is clearly required for
your services.
 Verify your services are not clearly excluded
from coverage.
Appeals Processes
 Request and review the timetable for submitting
an appeal and that of the entire process. Some
plans require that appeals be made within 180
days of the adverse determination.
 Plans are required to respond within a certain
timeframe depending upon circumstances. If
you don’t get a timely response, follow-up!
Appeals Processes
 Precisely follow the process, instructions and use
any forms required by the plan.
 Identify the appropriate person for your appeal.
 Prepare to write a letter with specific
consideration for the clinical needs of the patient
as well as the clinical justification for the service
you want covered.
 Include references to standardized screening
and assessment results as well as the
individualized treatment plan.
Appeals Processes
 Include any appropriate references to the parity
law or health care reform. Make sure you
understand what you’re positing.
 Verify that comparable medical services require
comparable utilization review and are subject to
comparable guidelines. It’s the health plan’s
responsibility to demonstrate to you that MH/SUD
services are managed “no more restrictively
than” medical and surgical services.
 Verify that financial and frequency of treatment
limitations are not more stringent for MH/SUD
conditions and services than they are for
Appeals Processes
 Request and review the plan’s policies
concerning “scope of service”
 the list of covered conditions
 the list of covered services
 verify that you are a covered provider
 Your appeal will document that you (provider), the service
you’re requesting (level of care) and the condition
(patient’s diagnosis and severity of illness among other
factors) are all covered per the law and the plan’s
Evidence of Coverage or Summary Plan Description.
Request for Medical Necessity Criteria
• Your name, credentials, business (facility) name,
National Provider Identifier (NPI), physical address,
phone number, email address
• The appeal liaison’s name, address, phone
number, etc.
• The patient’s name, subscriber number (insurance
policy #)
• Date of request for coverage
• Name of UR staff who denied coverage
• Level of Care Requested/Denied
Request for Medical Necessity Criteria
• Statement that a licensed clinician has determined—using
standardized screening, assessment and diagnostic tools
and evidence-based treatment protocols—that a particular
level of care and course of treatment was medically
• Statement of need (what would happen if patient did not
receive the treatment services requested).
• Formal request for the medical necessity criteria relied upon
by plan’s utilization review staff in order to reach a decision
resulting in denial of coverage for requested treatment
• Request that plan explain clearly how the managed care
processes (including pre-authorization), strategies (including
concurrent review), and evidentiary standards used in
making the adverse determination are/were applied no
more stringently for the MH/SUD services you requested than
they are for medical and surgical coverage requests.
Appeal Letter
• Tailor your wording to use terminology used by
plan in the Explanation of Benefits, Provider
Manual, and Medical Necessity Criteria
• Include references to scientific and professional
evidence supporting the level of care requested.
Sources include ASAM and CSAT.
• Include clinical/medical details supporting your
patient’s condition, diagnosis and need for the
service you are requesting
• Refer to your analysis of the plan’s policies, the law
and the plan’s evidentiary standards in contrast to
your request. Point to what you believe to be the
fundamental problem with the denial and support
your conclusion using the plan’s terms.
• Remember there are three levels of appeal and
external review is increasingly available
• Appeal a second, third and fourth time
• Your state may have an Ombudsman
• Every state has an Insurance Commissioner
Thank You! Questions?
Patrick Gauthier
888-898-3280 ext. 802
[email protected]

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