Why Mental Health Parity Belongs in the Halls of Congress

Last month, Psych-Appeal founder Meiram Bendat testified before Congress at a hearing of the Committee on Education and Labor, Subcommittee on Health, Employment, Labor, and Pensions. This hearing focused on a hot-button issue echoing in legislative chambers across the country, from Washington, D.C., to Illinois and California. What role can – and should – government, especially Congress, be responsible for in ensuring mental health parity?

Our experience tells us there is a lot that Congress can do to increase access to mental health care and encourage parity.

Take, for example, the Employee Retirement Security Income Act of 1974 (ERISA). ERISA establishes uniform, though limited, protections for participants and beneficiaries of employer-sponsored health plans that cover approximately 136 million people.¹ Approximately 67 percent of these individuals are covered by self-funded plans, which are entirely exempt from state insurance laws and regulation, while 33 percent are covered by fully-insured plans.² Significantly, because state insurance laws do not apply to self-funded health plans, the U.S. Department of Labor is the sole source of oversight for these plans.

Despite the prevalence of mental health and substance use disorders,³ until the Affordable Care Act (ACA) amended ERISA to require fully-insured, small group health plans to provide essential health benefits, ERISA did not mandate any coverage for the treatment of mental health and substance use disorders. In fact, prior to the ACA, only a patchwork of state laws required mental health benefits to be covered by some fully-insured plans.⁴ The Paul Wellstone and Pete Domenici Mental Health and Addiction Equity Act (MHPAEA), which amended ERISA in 2008, only required group health plans with more than 50 employees to cover mental health benefits at parity with medical/surgical benefits, if they chose to cover such benefits at all.

Now that ERISA requires coverage for mental health and substance use disorders, we’re good, right? Not quite. Here’s the vexing issue:

While the ACA requires access to essential health benefits, it does not define “medical necessity,” a core term of coverage under ERISA benefit plans. And while MHPAEA requires non-quantitative treatment limitations such as medical necessity to be applied comparably to mental health and medical/surgical benefits, it does not require medical necessity determinations to comport with generally accepted standards of clinical practice. So, without ERISA expressly saying that “medical necessity” should follow generally accepted standards of clinical practice, health plans are free to create and use self-serving, overly restrictive medical necessity definitions that undermine access to essential health benefits, including mental health and substance use treatment.

And there’s more…

The lack of a uniform definition of “medical necessity” is not the only impediment to meaningful coverage of mental health and substance use treatment under ERISA plans. While the ACA established a network adequacy requirement for qualified health plans sold on ACA Exchanges, it did not amend ERISA to require non-exchange plans to establish network adequacy standards for timely and geographic access to care. Although MHPAEA identifies network adequacy as a non-quantitative treatment limitation, it too does not set timeliness or geographic access standards for mental health and substance use treatment.

In the absence of any such standards set by their plans, or any remedies for the unavailability of in-network services, ERISA plan participants must often wait protracted periods or travel extensive distances to receive mental health and substance use treatment, or to obtain authorizations for out-of-network care, which are inconsistently granted. Given the prevalence of narrow and phantom networks, it is unsurprising that mental health and substance use treatment is disproportionately rendered out-of-network or forsaken altogether.

At a minimum, ERISA plans should be required to protect plan participants from cost-sharing that exceeds their in-network financial responsibility when out-of-network services must be sought due to network inadequacy.

Further, ERISA’s remedial scheme should be updated to account for the modern reality that health plan issuers (of fully-insured group plans), who also serve as claims administrators (for self-funded group plans), are the actual fiduciaries who adjudicate benefits using self-selected, uniform utilization review criteria across their commercial lines of business, and who sell shared network access to group health plans. With annual profits in the billions, they should not be incentivized to short-change premium-paying participants by artificially limiting their coverage for medically necessary mental health and substance use treatment, or by selling access to networks that are known to lack mental health and substance use providers.

To level the managed care playing field, we need Congress to enact mental health parity legislation that links “medical necessity” to generally accepted standards of clinical practice; eliminates the deferential standard of judicial review in health benefit cases; permits damages against health insurance issuers and claims administrators that discriminate against and undermine access to mental health treatment; and protects access to open courts by exempting ERISA claims from binding arbitration.

Only then can we truly guarantee meaningful access to mental health care.

*Full testimony presented at the U.S. House of Representatives, Committee on Education and Labor, Subcommittee on Health, Employment, Labor, and Pensions hearing entitled “Meeting the Moment: Improving Access to Behavioral and Mental Health Care” can be accessed at this link.

^{1 DOL.gov. 2021. FY 2020 MHPAEA Enforcement. Available at: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement–2020.pdf [Accessed 11 April 2021].}

^{2 KFF. 2020. 2020 Employer Health Benefits Survey – Summary of Findings. Available at: https://www.kff.org/report-section/ehbs-2020-summary-of-findings/ [Accessed 11 April 2021].}

^{3 McCance-Katz, E., 2020. The National Survey on Drug Use and Health: 2019. SAMHSA.gov. Available at: https://www.samhsa.gov/data/sites/default/files/reports/rpt29392/Assistant-Secretary–nsduh2019_presentation/Assistant-Secretary-nsduh2019_presentation.pdf [Accessed 11 April 2021].}

^{4 KFF. n.d. Pre-ACA State Mandated Benefits in the Individual Health Insurance Market: Mandated Coverage in Mental Health. Available at: https://www.kff.org/other/state-indicator/pre-aca-state-mandated-benefits-in-the-individual-health-insurance-market-mandated-coverage-in-mental-health/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D [Accessed 11 April 2021].}