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58–272 2010

MENTAL HEALTH 

AND SUBSTANCE ABUSE PARITY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

MARCH 27, 2007 

Serial No. 110–30 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

CHARLES B. RANGEL, New York, Chairman 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

RAHM EMANUEL, Illinois 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

CHRIS VAN HOLLEN, Maryland 

KENDRICK MEEK, Florida 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

JIM MCCRERY, Louisiana 

WALLY HERGER, California 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

SAM JOHNSON, Texas 

PHIL ENGLISH, Pennsylvania 

JERRY WELLER, Illinois 

KENNY HULSHOF, Missouri 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

THOMAS M. REYNOLDS, New York 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

JOHN LINDER, Georgia 

DEVIN NUNES, California 

PAT TIBERI, Ohio 

JON PORTER, Nevada 

Janice Mays, Chief Counsel and Staff Director 

Brett Loper, Minority Staff Director 

SUBCOMMITTEE ON HEALTH

FORTNEY PETE STARK, California, Chairman 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

RAHM EMANUEL, Illinois 

XAVIER BECERRA, California 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

RON KIND, Wisconsin 

DAVE CAMP, Michigan 

SAM JOHNSON, Texas 

JIM RAMSTAD, Minnesota 

PHIL ENGLISH, Pennsylvania 

KENNY HULSHOF, Missouri 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


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C O N T E N T S 

Page 

Advisory of March 20, 2007, announcing the hearing .......................................... 2 

WITNESSES 

The Honorable Jim Ramstad, a Representative in Congress from the State 

of Minnesota ......................................................................................................... 5 

The Honorable Patrick J. Kennedy, a Representative in Congress from the 

State of Rhode Island ........................................................................................... 8 

David L. Shern, Ph.D., President and CEO, Mental Health America, Alexandria, Virginia ........................................................................................................ 19 

Kathryne L. Westin, M.A., L.P., Eating Disorders Coalition for Research, 

Policy and Action .................................................................................................. 29 

Michael Quirk, Ph.D., Director, Behavioral Health Service, Group Health 

Cooperative, Seattle, Washington ....................................................................... 25 

Eric Goplerud, Ph.D., Director, Ensuring Solutions to Alcohol Problems, 

George Washington University ........................................................................... 42 

Ronald W. Manderscheid, Ph.D., Director of Mental Health and Substance 

Use Programs, Constella Group LLC, Baltimore, Maryland ............................ 50 

Henry T. Harbin, M.D., Baltimore, Maryland ....................................................... 54 

SUBMISSIONS FOR THE RECORD 

American Academy of Child and Adolescent Psychiatry, statement ................... 66 

American Association for Geriatric Psychiatry, statement .................................. 68 

American Association for Marriage and Family Therapy, statement ................. 71 

Amy Kuehn, Indianapolis, IN, statement .............................................................. 73 

Linda Hay Crawford, Therapeutic Communities of America, statement ............ 74 

Mike Fitzpatrick, statement ................................................................................... 76 

National Association of Anorexia Nervosa and Associated Disorders, statement ...................................................................................................................... 79 

National Association of Health Underwriters, Arlington, VA, statement ........... 80 

National Association of Pediatric Nurse Practitioners, statement ...................... 81 

Kathleen Grant, Portland, OR, statement ............................................................. 82 

Therapeutic Communities of America, statement ................................................ 84 


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MENTAL HEALTH 

AND SUBSTANCE ABUSE PARITY 

TUESDAY, MARCH 27, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HEALTH, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:07 a.m., in 

Room 1100, Longworth House Office Building, Hon. Fortney Pete 

Stark (Chairman of the Subcommittee), presiding. 

[The advisory announcing the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HEALTH 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–3943 

March 20, 2007 

HL–7 

Health Subcommittee Chairman Stark 

Announces a Hearing on 

Mental Health and Substance Abuse Parity 

House Ways and Means Health Subcommittee Chairman Pete Stark (D–CA) announced today that the Subcommittee on Health will hold a hearing on mental 

health and substance abuse parity. The hearing will take place at 10:00 a.m. 

on Tuesday, March 27, 2007, in Room 1100, Longworth House Office Building. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND: 

Mental illness affects 24 percent of the adult population, with over 5 percent suffering from serious mental illness. In 2002, President Bush identified unfair treatment limitations placed on mental health benefits as a major barrier to mental 

health care and urged Congress to enact legislation that would provide full parity 

in the health insurance coverage of mental and physical illnesses. 

According to the National Institutes of Health, mental illness and substance 

abuse are biological diseases, and yet both private and public health insurers make 

it more difficult for patients to get treatment for these diseases. Health plans have 

imposed lower annual or lifetime dollar limits, covered fewer hospital days or outpatient office visits, or increased cost sharing by raising deductibles or copayments 

for patients with mental illness. 

In 1996, a compromise measure, the Mental Health Parity Act (MHPA) (P.L. 104– 

204), was enacted which provided partial parity for the private health insurance 

marketplace. It prohibited separate annual and lifetime dollar limits for mental 

health care, but did not stop group plans from imposing restrictive treatment limits 

or cost sharing. In addition, the MHPA was specifically not applicable to substance 

abuse treatment. As a consequence, mental health and substance abuse treatment 

are still not on parity with physical health care. A recent study of costs associated 

with adding mental health and substance abuse services to the Federal Employees 

Health Benefits Plan concluded that implementation of benefits led to a negligible 

cost increase. 

Medicare also fails to provide mental health parity. Medicare’s mental health benefit is fashioned on the treatment provided in 1965, but treatments have changed 

dramatically in the last 42 years. Inpatient coverage at psychiatric hospitals is limited to 190 days over the beneficiary’s lifetime. In addition, beneficiaries are charged 

a discriminatory 50 percent copayment for outpatient psychotherapy services, compared to 20 percent for physical health services. New mental health and substance 

abuse treatment paradigms, such as evidence-based collaborative care models, are 

also long overdue for inclusion in Medicare. 

‘‘It is long past time to address the inequities in mental health coverage 

in private plans and Medicare,’’ commented Chairman Rep. Pete Stark (D–CA), 

Chairman of the Ways and Means Health Subcommittee. ‘‘This hearing will lay 

the groundwork for future action on this important issue.’’ 


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FOCUS OF THE HEARING: 

The hearing will focus on legislation and options to provide mental health and 

substance abuse treatment parity in private health insurance and in Medicare. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘110th Congress’’ from the menu entitled, ‘‘Committee Hearings’’ (http://waysandmeans.house.gov/Hearings.asp?congress=18). 

Select the hearing for which you would like to submit, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, completing all informational forms and clicking ‘‘submit’’ on the 

final page, an email will be sent to the address which you supply confirming your 

interest in providing a submission for the record. You MUST REPLY to the email 

and ATTACH your submission as a Word or WordPerfect document, in compliance 

with the formatting requirements listed below, by close of business Tuesday, April 

10, 2007. Finally, please note that due to the change in House mail policy, the U.S. 

Capitol Police will refuse sealed-package deliveries to all House Office Buildings. 

For questions, or if you encounter technical problems, please call (202) 225–1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, and telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

Chairman STARK. If our guests would like to find seats, and we 

could begin our hearing. We are going to examine an important 

change to two important parts of our health care system, the issue 

of mental health parity in the private health insurance market and 

mental health parity in government programs. 

There have been tremendous changes in diagnosis and treatment 

of mental illness and substance abuse, but the laws governing the 


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treatment have not moved as quickly, and we typically have insurers, government and private, imposing lower treatment or higher 

dollar barriers, higher copayments, limitation of hospital periods. 

This discrimination does not apply any longer to the Federal Employees Health Benefit Plan, but Medicare continues to have it. 

One in four adults will suffer from some form of mental illness, 

and 5 percent with severe, and one in five seniors will experience 

mental disorders that are not part of the normal aging process. 

Those of us over 65 have one of the highest suicide rates, account 

for 20 percent of the suicide deaths in the United States, while only 

13 percent of the population. 

I want to thank my colleagues: Mr. Ramstad, who is a Member 

of our Subcommittee; Mr. Kennedy from Rhode Island, who will 

testify along with Mr. Ramstad today. These two have been fighting for full parity and for mental health and substance abuse treatment, and they are to be congratulated. They have taken this issue 

on the road, as we say, hosting field hearings around the country, 

and today we are going to hear more about what they have 

learned. They have 256 original cosponsors. That is more than the 

218 we need to pass a bill. It is the Paul Wellstone Mental Health 

and Addiction Equity Act. It is H.R. 1424, and we will hear more 

about that from our witnesses. 

Our first two panels will discuss the need for mental health parity for those with private health insurance, and with strong support in the House and Senate, I am hopeful that we will see this 

bill move ahead. The third panel will focus on the need for mental 

health parity in Medicare, and its mental health benefit is fashioned on treatment provided in 1965, and inpatient coverage in 

psychiatric hospitals. It is limited to 190 days over a beneficiary’s 

lifetime. In addition, there is a 50 percent coinsurance for outpatient psychotherapy as compared to only a 20 percent coinsurance for physical health services, obviously a discriminatory barrier. 

Because of these limitations, Medicare spending in mental health 

is skewed toward the costly hospital services. In 2001, 56 percent 

of mental health spending in Medicare went to inpatient care, 

which was over twice the national average of 24 percent. Conversely, the percentage of Medicare spending for cost-effective outpatient care is far below the national trend. 

I have introduced legislation since 1995 that provides mental 

health and substance parity in Medicare for inpatient/outpatient 

services. It would also redesign the outpatient benefit to make it 

easier for beneficiaries to get mental health services from cost-efficient options in the community. 

Again, I want to thank Mr. Ramstad and Mr. Kennedy for helping me introduce H.R. 1663 this year. President Bush in April of 

2002 identified unfair treatment limitations in mental health as a 

major barrier to mental health care. He launched the New Freedom Commission on Mental Health to identify how mental health 

care could be improved. One of our panelists today who served on 

that Commission will discuss their suggestions. President Bush 

also urged Congress to enact legislation that would provide full 

parity in the mental health insurance coverage of mental and physVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00008 Fmt 6633 Sfmt 6602 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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ical illnesses. I agree. It is time to end this discrimination against 

mental health in both commercial insurance and in Medicare. 

[The information follows: PENDING] 

Chairman STARK. I want to thank our panelists this morning, 

and we will ask Mr. Ramstad, who is a Member of the Committee, 

to proceed. 

Mr. CAMP. I’m sorry? 

Chairman STARK. Protocol and good sense would require that 

Mr. Camp have some opening remarks. 

Mr. CAMP. Thank you, Mr. Chairman. I also want to welcome 

our colleagues Mr. Ramstad and Mr. Kennedy to the Committee. 

We all recognize the importance of health benefits for individuals 

suffering from mental conditions, and by managing the treatment 

of an individual suffering from mental illnesses, health insurers 

can provide medical care that can lead to better health and lower 

costs in the future. Given the dramatic increases in health care 

costs in recent years, many employers are already dropping or limiting health care coverage. This in turn makes it more difficult for 

their employees to obtain any health insurance, including mental 

health benefits. 

The question this Subcommittee needs to ask is whether or not 

access to mental health benefits and, more broadly, health care insurance will be unintentionally reduced because of the added cost 

to employers. I hope that we will get a chance today to discuss another mental health parity bill which is being developed in the Senate by Senators Kennedy and Enzi. Both bills include a requirement for employers and health plans to cover treatment for mental 

illnesses on the same terms and conditions as all other illnesses. 

The Senate, however, adopts a different approach to defining covered diseases and mandates about the networks and providers that 

must be covered. This approach may significantly reduce the potential cost that could be imposed upon employers. 

It is my hope that Congress can move forward with the goal of 

enacting a bill that expands access to appropriate mental health 

services while not reducing any worker’s access to health care benefits. I look forward to working with my colleagues and with Chairman Stark on this issue. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Chairman STARK. Thank you, Mr. Camp. 

[The information follows: PENDING] 

Chairman STARK. Jim, would you like to proceed to enlighten 

us? 

STATEMENT OF THE HON. JIM RAMSTAD, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF MINNESOTA 

Mr. RAMSTAD. Thank you, Mr. Chairman, Ranking Member 

Camp and all other friends and colleagues of the Subcommittee. 

Thank you for holding this important hearing today. 

As you know, ensuring access to mental health and addiction 

treatment is more than just a public policy issue to me. It is a lifeor-death issue, like it is for 26 million Americans suffering the ravages of chemical addiction and 54 million Americans suffering from 

mental illness, something I have been working on since 1996, and 

I certainly appreciate the hearing we are having here today. 


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On July 31, 1981, I woke up in a jail cell in Sioux Falls, South 

Dakota, under arrest for a variety of offenses stemming from my 

last alcoholic blackout. I am alive and sober today only because of 

the access that I had to treatment along with the grace of God and 

the fellowship of other recovering people for the past 251⁄2 years. 

I am living proof that treatment works, and recovery is possible, 

but too many people don’t have the access to treatment that I had. 

It is a national disgrace that 270,000 Americans were denied addiction treatment last year, American people suffering from this disease who had admitted their powerlessness over chemicals, their 

life had become unmanageable, and the treatment doors were 

slammed in their faces. 

It is estimated that 8 million people in health plans are unable 

to access treatment for chemical dependency despite being in plans 

that purportedly cover treatment for this disease. Last year alone, 

150,000 of our fellow Americans died as a direct result of chemical 

addiction, and 30,000 Americans committed suicide from untreated 

depression, and I believe it is a national crisis that untreated addiction and mental illness costs our economy, and there are various 

studies that corroborate this, over $550 billion last year. Of course, 

we all know of the cost that can’t be measured in financial terms, 

the human suffering, broken families, shattered dreams, ruined careers, destroyed lives. 

It is time to end the discrimination against people suffering the 

ravages of mental illness and chemical addiction. I believe it is 

time to pass the Paul Wellstone Mental Health and Addiction Equity Act. This important legislation would simply prohibit health 

insurance companies from imposing discriminatory barriers to 

mental health or addiction treatment through limited treatment 

stays, higher copayments, deductibles or cost-sharing requirements; 

that is, discriminatory barriers that don’t exist for other diseases. 

We should all be alarmed by the dwindling access to treatment 

for chemically dependent people and people with mental illness. 

Over half the beds that were available 10 years ago are gone. Even 

more alarming, 60 percent of the adolescent treatment beds have 

disappeared in the last decade. 

Expanding access to treatment is not only the right thing to do, 

it is also the cost-effective thing to do, and I just want to address 

the cost factor that was already raised here today. We have all the 

empirical data in the world, and I would be glad to make these actuarial studies available to every single Member. We have all the 

scientific data to show that equity for mental health and addiction 

treatment will save billions of dollars a year while not raising premiums. The worst-case scenario, premiums would be raised, according to all of these studies, less than 1 percent. In the legislation, 

if it is raised 1 percent, the parity does not apply. 

Let me give you three studies: Medica, extensive study, found the 

cost for mental health parity 26 cents per member per month; the 

actuarial firm Millman and Robertson, parity will increase premiums less than 78 cents per month, far less than 1 percent; the 

most recent study done by the New England Journal of Medicine, 

costs do not increase, and they studied not only the Federal employees benefit plan, but parity in a number of States. Costs, again, 


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from the respected New England Journal of Medicine, costs do not 

increase with parity, but save dollars. 

Let me also site an encouraging development. The health plans 

and the insurance companies are starting to come around. I credit 

my colleague and partner in this effort, Patrick Kennedy. He has 

been the leader in arranging these field hearings. He has been to 

each and every one. I have been to eight or nine. He has been to 

13 or 14. The CEO of Blue Cross/Blue Shield of New England testified as to the cost-effectiveness of parity. United Behavioral Health 

in New England testified as to the cost-effectiveness of parity. 

Health Partners of Minnesota, same thing; Medica, same thing. 

Kaiser Permanente also supports this legislation, testifying there is 

no increases in costs associated with parity. 

Let me conclude, Mr. Chairman, by saying as strongly as I can, 

it is time to end the discrimination against people who need treatment for mental illness and addiction. It is time to prohibit health 

insurers from placing discriminatory restrictions on treatment. It is 

time to provide the American people with greater access to treatment. It is time to pass this legislation because we must address 

America’s number one public health crisis, which is clearly untreated mental illness and untreated chemical addiction. The 

American people, Mr. Chairman, cannot afford to wait any longer. 

Thank you again for calling this hearing. I would be more than 

happy to answer your questions. 

Chairman STARK. Thank you very much. 

[The prepared statement of Mr. Ramstad follows:] 

Prepared Statement of The Honorable Jim Ramstad, 

a Representative in Congress from the State of Minnesota 

Chairman Stark, Ranking Member Camp, thank you for holding this important 

hearing. 

As you both know, ensuring access to mental health and addiction treatment is 

more than just a public policy issue for me. On July 31, 1981, I woke up in a jail 

cell in Sioux Falls, S.D. under arrest as the result of my last alcoholic blackout. 

I’m alive and sober today only because of the grace of God, the access I had to 

treatment and the fellowship of recovering people for the past 25 years. I’m living 

proof that treatment works and recovery is possible. 

But too many people don’t have access to treatment. It’s a national disgrace that 

270,000 Americans were denied addiction treatment last year. Last year alone, 

150,000 of our fellow Americans died from chemical addiction and 30,000 Americans 

committed suicide from depression. And it’s a national crisis that untreated addiction and mental illness cost our economy over $550 billion last year. 

And think of the costs that can’t be measured in dollars and cents—human suffering, broken families, shattered dreams, ruined careers and destroyed lives. 

It’s time to end the discrimination against people suffering the ravages of mental 

illness and chemical addiction. It’s time to pass the ‘‘Paul Wellstone Mental Health 

and Addiction Equity Act.’’ This important legislation would prohibit health insurance companies from imposing discriminatory barriers to mental health or addiction 

treatment through limited treatment stays and higher copayments, deductibles or 

cost-sharing requirements—discriminatory barriers that don’t exist for other diseases. 

I am absolutely alarmed by the dwindling access to treatment for chemically dependent people. 

Over half of the treatment beds that were available 10 years ago are gone. Even 

more alarming, 60% of the adolescent treatment beds are gone. We must reverse 

this trend. 

Expanding access to treatment is not only the right thing to do; it’s also the costeffective thing to do. We have all the empirical data, including actuarial studies, to 

prove that equity for mental health and addiction treatment will save billions of dollars nationally while not raising premiums more than 1 percent. 


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It’s well-documented that every dollar spent on treatment saves up to $12 in 

health care and criminal justice costs alone. That does not even take into account 

savings in social services, lost productivity, absenteeism and injuries in the workplace. 

Let me conclude by repeating as strongly as I can: It’s time to end the discrimination against people who need treatment for mental illness and addiction. It’s time 

to prohibit health insurers from placing discriminatory restrictions on treatment. 

It’s time to provide greater access to treatment. It’s time to pass the Paul Wellstone 

Mental Health and Addiction Equity Act! 

The American people cannot afford to wait any longer for Congress to act. 

f 

Chairman STARK. Mr. Kennedy, would you like to proceed? 

STATEMENT OF THE HON. PATRICK J. KENNEDY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF RHODE ISLAND 

Mr. KENNEDY. Yes. Thank you, Mr. Chairman and Ranking 

Member Camp. I think you have just witnessed why—— 

Chairman STARK. I put things like that on my icebox door, but 

I am not sure that—— 

Mr. KENNEDY. Well, that is a frown for why we don’t have parity right now, and it will be a smiling face when you pass parity. 

It is a PET scan, which is an X-ray of the brain. It shows that we 

have a physical illness in mental illness, thereby debunking what 

is really the popular stigma of mental illness, and that is that it 

is a moral issue; that when people have a mental illness, that it 

is their fault; that it is a moral failing that it is their fault that 

they have an addiction, that they succumb to alcoholism; that is a 

personal failure of theirs. 

We now know that it is a genetic and physiological problem, combined with environmental factors, that leads someone to have these 

problems. As such, just like someone who has diabetes, or just like 

someone who has asthma, or just like someone who has cardiovascular disease, we need to treat the combination of someone’s 

physiological environmental factors. But unfortunately in this 

country, we treat mental illness and addictions differently than we 

do other chronic illnesses that are no different from mental illnesses. 

I just want to begin by saying, I think you have just heard why 

Jim Ramstad is the heir to Paul Wellstone from Minnesota. He has 

been the champion before I came to Congress, and, as he has just 

articulated, remains the most articulate champion for those with 

addiction and alcoholism in this country, and is somebody that I 

credit personally with my own recovery in day to day and also as 

an inspiration to me in this legislative battle to bring parity in this 

country for millions of Americans, 26 million Americans who are 

discriminated against on a daily basis simply because they have an 

illness of the brain. That is what we are after, Mr. Chairman, this 

notion that just because the organ in the body that we are talking 

about exists between the shoulders as opposed to anywhere else in 

the body, it is discriminated against. 

We have heard hearings all over the country about how this discrimination takes place, but nothing is as compelling as the personal stories. You will hear some of them today, Mr. Chairman, one 

of them from Anna Westin, Kitty Westin and Anna Westin, who is 


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her daughter, who was denied treatment and lost her life as a result of it. She was denied treatment and as a result lost her life. 

Now why is it that she was denied treatment? She was denied 

treatment because her brain illness was not regarded as fully reimbursable. This X-ray, insurance companies will reimburse for Parkinson’s disease for the motor cortex, the basal ganglia and the 

sensory cortex and thalamus 100 percent. It will reimburse it 100 

percent. But if you move just a half a centimeter away, insurance 

companies will not reimburse 100 percent for the limbic cortex. In 

fact, it will only reimburse 50 percent, maybe 40 percent for the 

hypothalamus, which is no different in physical characteristics for 

its physical impact on a disease like the disease of eating disorder 

that affected Anna or the frontal cortex or hippocampus. 

This is no way to justify denying coverage. The basic issue today, 

Mr. Chairman, is an issue of fairness, and that is why we are here 

today is to say that it is unfair for people with mental illness to 

be denied treatment. They pay for their health insurance like everybody else, and yet they are denied their health insurance coverage when they get sick. But that is not fair, Mr. Chairman. So, 

many Americans are covered when it comes to their health insurance when they pay their premiums, but if it comes to mental illness, they are denied their health insurance when it comes to their 

treatment. 

This I don’t think is very American. No one is asked when they 

are born what their genetics are, what their anatomy, what their 

physiology is, just like they are not asked what their skin color is 

and what their gender is. This is just as much a civil rights issue 

as those two were, and that is why we need to make this the civil 

rights issue of our time and pass mental health parity. 

[The prepared statement of Mr. Kennedy follows:] 

Prepared Statement of The Honorable Patrick J. Kennedy, 

a Representative in Congress from the State of Rhode Island 

Chairman Stark, Ranking Member Camp, and my distinguished colleagues, thank 

you for inviting me to testify today, and, especially, for your commitment to ending 

insurance discrimination. 

And of course, I must single out my great friend and the strongest champion for 

Americans with mental illnesses and addictions, Jim Ramstad. For years he has led 

this fight, leaning into the stiff wind of his own leadership without regard for the 

political consequences, speaking up for what he knows is right. We all owe him a 

debt of gratitude, nobody more than I. Jim, it has been an honor to stand with you 

in these efforts, and a greater privilege to be your friend. 

This issue is first and foremost one of fundamental fairness. Kitty Westin, who 

you will hear from, paid her health insurance premiums just like everyone else. But 

when her daughter Anna got sick and needed her insurance coverage, she didn’t get 

it. That is just not fair. And it cost Anna her life. 

There is no way to justify denying Anna Westin, and millions of others, the full 

benefit of the health insurance they pay for. 

In the attached exhibit, you can see the visual evidence that these diseases are 

physiological brain disorders. Some brain diseases, like Parkinson’s, affect the motor 

cortex, the basal ganglia, the sensory cortex, and the thalamus. Other brain diseases, like depression, affect the limbic cortex, hypothalamus, frontal cortex, and 

hippocampus. 

There is no way to justify providing full coverage to treat certain structures of 

the brain, but to erect barriers to the treatment of other structures. 

This discrimination is not only unjustifiable, it is enormously costly. Representative Ramstad and I have traveled across this country holding informal field hearings 

on this subject—a dozen so far, with more to come. 

We’ve heard from chiefs of police, like Sheriff Baca in Los Angeles who says he 

runs the largest mental health provider in the United States: the L.A. County jail. 


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According to the Justice Department, more than half of inmates in jails and prisons 

in this country have symptoms of a mental health problem. Two-thirds of arrestees 

test positive for one of five illegal drugs at the time of arrest, according to the National Institutes of Health. That’s a cost of our insurance discrimination. 

We’ve heard from hospital presidents and emergency room doctors, like Dr. Victor 

Pincus. He said that 80% of the trauma admissions at Rhode Island Hospital, a 

level-one trauma center, were alcohol and drug related. Eighty percent. 

The physical health care costs go beyond the emergency room. Research shows, 

for example, that a person with depression is four times more likely to have a heart 

attack than a person with no history of depression. Health care use and health care 

costs are up to twice as high among diabetes and heart disease patients with comorbid depression, compared to those without depression, even when accounting for 

other factors such as age, gender, and other illnesses. Not surprisingly then, one 

study found that limiting employer-sponsored specialty behavioral health services 

increased the direct medical costs of beneficiaries who used behavioral health care 

services by as much as 37%. These are costs of our insurance discrimination. 

In our field hearings, we’ve heard from enlightened business leaders and insurance executives, like Jim Purcell, the CEO of Blue Cross/Blue Shield of Rhode Island. This is what Mr. Purcell said about limits on access to mental health and addiction treatment: ‘‘I believe that’s bad medicine, it’s bad law, and it’s bad insurance.’’ 

Rick Calhoun, an executive in the Denver office of CB Richard Ellis, a Fortune 

500 company, made a similar point. Mr. Calhoun said that the cost of treating mental illness is 50% of the cost of not treating it. As he said, ‘‘This is a no-brainer. 

How could we not cover it?’’ 

Untreated mental health and addiction cost employers and society hundreds of 

billions of dollars in lost productivity. The World Health Organization has found 

that these diseases are far and away the most disabling diseases, accounting for 

more than a fifth of all lost days of productive life. Depressed workers miss 5.6 

hours per week of productivity due to absenteeism and presenteeism, compared to 

1.5 hours for nondepressed workers. Alcohol-related illness and premature death 

cost over $129.5 billion in lost productivity per year. These are the costs of our insurance discrimination. 

All of these costs are preventable, and wasteful. But none are as tragic as the individual costs. We heard testimony from anguished parents who, like Kitty Westin, 

had to bury their children because their mental illnesses and addictions went untreated. 

We heard testimony from people like Amy Smith, who said when she runs into 

people she knew 25 years ago, they’re stunned she’s still alive. She was in and out 

of jail and emergency rooms, unable to connect with other people, muttering to herself on the street, and unemployed. For 45 years, she says, she was a drain on society. Then she finally got the treatment she needed and now she’s a taxpayer, holding down a good job. 

Amy Smith lost decades of her life because she didn’t get treatment. If you want 

to know the costs of our insurance discrimination, Amy Smith can describe them: 

‘‘I would have been able to pursue my dreams for my life, which were things like 

driving a car, or holding down a real job, or getting married, or volunteering in the 

community, any of those things. . . . I think my life would have been a lot different 

if I had had those services a lot earlier.’’ 

So many Americans have lost their dreams, lost years, and even lost their lives— 

unnecessarily. In Palo Alto we met Kevin Hines. He is a gregarious, outgoing person 

and is engaged to be married this summer. In 2001 he jumped off the Golden Gate 

Bridge, one of very few to survive that fall. Thirty-thousand people succeed where 

Kevin fortunately failed and take their own lives each year. How many of them 

would, like Kevin, be starting families, contributing to their communities, holding 

jobs, and realizing their potential if only they had access to treatment? 

Mr. Chairman, I’m happy to provide the transcripts from the field hearings I have 

referenced to be included in the record of this hearing. 

We will hear arguments that even if worthwhile, equalizing benefits is just too 

costly. The truth, however, is that equalizing benefits between mental health and 

addiction care on the one hand and other physical illnesses on the other hand is 

in fact low-cost. This is not speculation. 

In 2001, we brought equity to mental health and addiction care in the Federal 

Employees Health Benefits Program (FEHB), which covers 9 million lives including 

ours as Members of Congress. A detailed, peer-reviewed analysis found that implementing parity did not raise mental health and addiction treatment costs in the 

FEHBP. Since our bill specifically references the FEHBP to define the scope of our 

bill, this analysis provides strong evidence that our legislation will similarly have 


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negligible impact on costs. This finding is consistent with virtually every study of 

State parity laws as well. 

But frankly, the very fact that we need to debate how much it costs to end insurance discrimination is offensive. Nobody is asked to justify the cost-effectiveness of 

care for diabetes or heart disease or cancer. Tell Kitty Westin, or Amy Smith, or 

Kevin Hines, or the millions of others who live with these diseases that to keep 

health care costs down for everyone else, they will not have to pay with their lives. 

Why them? 

People might say that there is a component of personal responsibility here, especially with addiction. That’s true. I’m working hard every day at my recovery, and 

it’s reasonable to ask of me. But it’s also true that we don’t deny insurance coverage 

to people genetically predisposed to high cholesterol who eat fatty foods. We don’t 

deny insurance coverage to diabetics who fail to control their blood sugar. 

At the end of the day, this is about human dignity and whether we deliver on 

the promise of equal opportunity that is at the heart of what it means to be American. Nobody chooses to be born with particular genetics and anatomy, any more 

than they choose to be born with a particular skin color or gender. And nobody 

should be denied opportunities on the basis of such immutable characteristics. Anybody who pays their health insurance premiums is entitled to expect their plan to 

be there when they get sick, whether the disease is in their heart, their kidneys, 

or their brain. 

Unlike any other country in the world, this one was founded on principles—the 

ideas of equality and freedom and opportunity. This history of America is the history of a country striving to live up to those self-evident truths. In pursuit of those 

values we’ve fought a civil war, chipped away at glass ceilings, expanded the vote, 

renounced immigration exclusion laws, and recognized that disabilities need not be 

barriers. Led by a Member of this Subcommittee, a generation of peaceful warriors 

forced America to look in a mirror and ask itself whether its actions matched its 

promise, and they changed history. 

It is time, once again, to ask that question: Are our actions matching our promises? And once asked, the answer is clear. Jim and I know, personally, the power 

of treatment and recovery. We are able to serve in Congress because we have been 

given the opportunity to manage our chronic mental health diseases. Every American deserves the same chance to succeed or fail on the basis of talent and industriousness. That’s the American Dream, and it shouldn’t be rationed by diagnosis. 

Thank you. 

PET scans of schizophrenic (l.) and healthy (r.) brains. 

f 


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Chairman STARK. Thank you. I share in the applause for both 

of you. I am only disappointed that the two of you and some of your 

colleagues have had to share so much of your own painful personal 

experiences to get the attention of our colleagues. This is something that, as, Jim, you have indicated, we should have done 10 

years ago. So I hope that all the efforts that you have put into it, 

the efforts that our friend Paul Wellstone put into this when he 

first came to the Congress, that we will recognize that and what 

over 250 of our colleagues have recognized and move this ahead. 

I am sure that there will be some minor objections here or there. 

I hope we can compromise with them. I am going to let Patrick 

deal with his fair father to get that compromise taken care of, but 

I am sure that this is a time when we can move ahead and achieve 

what is necessary. So, I want to thank both of you for sharing your 

experiences. 

Mr. KENNEDY. Yeah. Mr. Chairman, if I could, one of the most 

compelling witnesses, we had talked about this as a cost in another 

way, and that was the lost life that they had. They said—Amy 

Smith was her name. She said, I would have been able to pursue 

my dreams for my life like driving a car, holding down a real job, 

maybe even getting married, volunteering in the community, those 

kinds of things in my life, if I had just been able to get treatment 

earlier in my life. I mean, we have to calculate these costs, too. You 

know, we talk about things so much in financial terms, and the financial terms are, I think, pretty clear-cut. 

I would caution the Members to think, too, about the productivity 

issues if they are looking at cost, because no business person does 

not take in and evaluate the productivity of their business in terms 

of calculating the bottom line, and depressed workers and twothirds of those with chemical and substance abuse disorders are on 

the job working in this country. Their productivity rates, they are 

losing over 3 hours to 4 hours a week in productive time, whether 

they are not at work because they are late for work, or whether 

they are at work and they are not paying attention at work. Those 

costs are all calculated in these examples that Representative 

Ramstad is ready to submit in testimony. 

I would caution the Members to pay attention to those, because 

taking these costs in a vacuum does not fully evaluate the real cost 

to businesses. It also is worth noting, Mr. Chairman, when it looks 

at the health care costs, 80 percent of the intake in a trauma care 

is due to drugs and alcohol in our emergency rooms. Eighty percent 

of gunshot wounds, car accidents, traumas, knifings, all of those 

kind of cases in our trauma care are all drug- and alcohol-related, 

but they never get marked up as drugs and alcohol because they 

are never reimbursable for drugs and alcohol. So, they don’t get 

marked up for drugs and alcohol. They get marked up as accidents 

for sutures, and so they never get written up as such. 

So, we don’t get an accurate reading in this country for the true 

toll of what cases come into our emergency rooms. If we accurately 

reimbursed for what the number of cases were that came into our 

emergency rooms as a result of drugs and alcohol, you would see 

those cases properly reflected in the numbers. 

Mr. RAMSTAD. Mr. Chairman, just for the record, since your 

testimony was written, your statement was written rather, we have 


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added cosponsors. There are now officially 261 cosponsors. Three 

more on my side came aboard last night, I am happy to report. 

Let me just talk very briefly in response to the two big myths 

that we are up against, and they are both myths eminently disprovable by empirical data. First is the cost of parity, and we have 

again all the empirical studies, whether it is the Millman and Robertson, the Medica study, the New England Journal of Medicine, 

the Rutgers study, the Minnesota study, the California study, I 

mean, I could off the top of my head name—— 

Chairman STARK. Federal employees study. 

Mr. RAMSTAD. Exactly. Insurance companies, insurance plans 

are starting to realize that and see the same data we do. That is 

why I cited five insurance plans that are now citing parity legislation as being a cost saver. The second myth is that this is a mandate. This is not a mandate. We are not saying to any insurance 

plan that you must cover mental illness or you must cover chemical 

addiction. We are just saying if you do include such coverage in 

your policy then you can’t discriminate. You have to treat it like 

you do physical diseases, that is you can’t impose higher copayments than you do for an appendicitis attack or asthma or whatever higher deductibles or limited treatment stays. I think that is 

why we are getting the support of, as we saw at our field hearings 

from around the country, from a number of CEOs who testified. 

One CEO testified in Palo Alto, California, who now applies parity 

in his policy for all of his employees, and he put it very succinctly 

when he said, if it is good enough for Members of Congress, i.e., 

our Federal employees benefit plan, it is good enough for my employees, and I think that sums it up. 

Chairman STARK. If the gentleman would yield at that point. 

Mr. Kennedy had suggested in his testimony that you would make 

the transcripts from those field hearings available, and without objection, I would like to add those to the record of our hearing today. 

Thanks. 

[The information follows: PENDING] 

Chairman STARK. Mr. Camp? 

Mr. CAMP. Well, thank you, and thank you both for your testimony. I know it isn’t easy to always portray these issues in a personal way, as you both have so effectively done. I certainly look forward to working with you as we move through the process on this. 

I think you have touched on a very important point, Mr. Ramstad, 

that there is no requirement that health plans include mental 

health and substance abuse benefits, and so we need to be very 

careful about how we craft that. So, we encourage people and plans 

to include these benefits so that we structure this in a way, and 

frankly, many of the people who go into emergency rooms don’t 

have any insurance at all. So, it is not a question of how it is coded, 

it is a question of how we ensure more health coverage in general 

for more Americans, particularly working Americans. 

So, I look forward to working with both of you, and I appreciate 

your testimony very much, and all of work that you have done on 

this issue, and the numerous field hearings you have had all over 

the country. Thank you, Mr. Chairman. 

Mr. KENNEDY. If I could, the really important thing about this 

as well is stigma, and passing this legislation will do a great deal 


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to ending the stigma against mental illness. This is a physical illness, and yet millions of Americans who already have health insurance don’t even avail themselves of it because they feel so ashamed 

because this society has placed this stereotype on people who seek 

mental help that they are—somehow something is wrong with 

them. 

So, passing it has much more of a salutary effect as just even 

treating them. It will make an enormous impact on the society’s 

approach overall to health care. So, I can’t underscore the importance of this, just in its PR value if anything else. So, I just do not 

underscore the importance of this for that value in itself. So I appreciate your—— 

Mr. RAMSTAD. Mr. Camp, if I may, you make a very, very important point. This legislation we are about today, this parity bill 

only addresses those people in health plans, addresses the 26— 

well, of the 26 million people suffering from addiction, it is estimated that roughly 16 million have insurance, but it only addresses those in plans. 

We have also got to address, as Mr. Stark does in his legislation, 

the Medicare population, given the incredible increases in depression among seniors and the corresponding increase in alcoholism 

among seniors, untreated alcoholism. So, that is the second part of 

addressing the overall problem of treating mental illness and chemical dependency in America. 

The third part is the Medicaid population. The Medicaid population; the fourth, veterans and our troops, and we have seen two 

tragically recent terms in Minnesota and elsewhere around the Nation suicides from PTSD, and we are addressing that as well in legislation that Mr. Emanuel or—or you, I believe, have introduced 

legislation on point. Certainly Mr. Moran has as well. 

Then we are not dealing with addiction problems in our prisons 

and jails. You know, the sheriff of L.A. County testified at our 

hearing in Los Angeles. He testified that as the one in charge, in 

charge with the responsibility of supervision for the L.A. County 

jails, he is the overseer for the largest mental health institution in 

the world, largest mental health system in the world. That is how 

he equated being in charge of the jails there. Columbia University 

study, all the studies on prison populations, jail populations show 

that 82 percent of the inmates in jails and prisons are there directly or indirectly because of addiction. So, we are not dealing 

with that as well. So, your point is well taken, Mr. Camp, that we 

need to deal with this comprehensively. 

Mr. THOMPSON. Thank you, Mr. Chairman, and thank you 

both for holding this hearing. Jim and Patrick, thank you very 

much for your interest and your passion on this very, very important issue. I am proud to be a coauthor of your legislation. I want 

to help you in any way to make sure that this becomes a reality. 

I just think more needs to be pointed out, and, Jim, you talked a 

lot about it in regard to the cost of not dealing with this both in 

opportunity costs. You know, our jails are filled with folks who 

should be getting medical help, not taking up cell time. The community costs are just outrageous about this. 

Patrick, I had an opportunity to cohost an event for you in my 

district, and welcomed—more than happy to do that as often and 


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in as many places as I can if we can help get the word out on this 

very important issue. As far as the reconciling the differences that 

the Chairman spoke about between you and your dad, I just want 

to put a pitch in for your bill that recognizes the important State 

programs such as my State, California, and if there is a bill that 

is passed that provides some sort of State preemption, that is going 

to be very, very damaging. So, I think your bill is the bill, and 

thank you again for just the personal effort that you have put into 

this. 

Mr. KENNEDY. Thank you. Thank you. 

Chairman STARK. Are there other Members—Mr. Emanuel? 

Mr. EMANUEL. Thank you, Mr. Chairman. I also thank Congressman Camp for having this hearing and our two colleagues 

who are testifying on this legislation. 

As a cosponsor, I will just say when I ran for Congress in 2002, 

I wrote an op-ed for the Chicago Sun Times on mental health parity, wrote a number of op-eds on different subjects. I was always 

shocked at how many people came up at both the El stops in Chicago, the grocery stores, the front stoops where I was campaigning 

and responded directly to this one. I wrote on health care coverage 

for children; wrote on tax fairness; Great Lakes and Lake Michigan 

restoration, but it was the mental health parity that doesn’t have— 

and I think the cosponsorship of this legislation show there is no 

Democrats and Republicans on this issue. There are people, families affected. 

I would urge one thing as we look at this. When we talk about 

mental health parity on health care, we did certain things in the 

1990s, Federal employees, the Executive Order by President Clinton at that time requiring companies, insurance companies that 

participated in the Federal employees system to offer this benefit 

and make sure that people have the coverage and no discrimination at that level. 

But I will say, as everybody knows, we may treat an individual 

who has mental health issues, but there is no doubt if we get them 

the insurance coverage, we are curing an illness that affects the entire family with that individual. It is right to focus on that individual. It is right to focus on the issue of productivity, but nobody 

can say that when a member is affected by any issue, depression, 

et cetera, that it does not affect the entire family and also places 

of employment. 

So, I thank our two colleagues for their courage in speaking up, 

and it takes a lot to do what you are doing, and hopefully with this 

change we will be allowed finally to get this legislation on the floor 

and through both Chambers. I want to thank you for your leadership, your coverage and most importantly after the years your 

steadfast determination to see this to this point that it is. Thank 

you very much. 

Chairman STARK. Mr. Kind? 

Mr. KIND. Thank you, Mr. Chairman. I want to thank you and 

Mr. Camp for holding this very important hearing, but I especially 

want to commend our two colleagues for linking arms on this vitally important issue and for traveling the country, as you have 

now for a very long time, reaching out, educating a whole lot of 

people, and elevating this issue to the level it needs to be at in 


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order for us to take this up finally in this session of Congress. 

Hopefully we are going to be able to move it through. 

I know there has been some initial resistance within some in the 

business community, but when you take a look at some of the lost 

opportunity costs associated with mental health, from turnover 

rate, to absenteeism, to lost productivity, there is another important reason why we need to do this to enhance overall productivity 

in the workforce. 

But one issue—and Ron is exactly right. There is not a family 

in America that is not affected one way or the other by this issue 

whether they know it or not. But one of the concerns that I had, 

and maybe it was the many years I was serving on the Education 

Committee, was we just need to get better at early identification 

on mental health issues with our children. I am wondering if you 

could just take a moment and speak to that and the importance of 

this legislation in order to get that early identification there, which 

obviously means quicker and more effective treatment then and 

hopefully not the associated societal costs that may come from not 

detecting this early on. 

Mr. KENNEDY. Thank you. The real key here is the fight by the 

insurance companies that they want to wait until it becomes a severe illness before they cover it. Then the irony is that when it becomes a severe illness, then obviously it becomes intractable and 

more chronic and more costly to treat. So, they have a problem 

with covering the DSM 4, which is what we are covered by as Federal Employees Health Benefit Plan, because they say it is too 

broad and would allow too much leeway for a therapist to, you 

know, allow aggressive treatment. 

The irony is you want aggressive treatment, and I don’t know a 

single person who voluntarily just wants to go and get mental 

health treatment for the sake of just getting mental health treatment to waste their time. That is the last thing I know of anybody 

who just likes to go around and overutilize the mental health system for the sake of overutilizing the mental health system. Last 

time I checked, that is not a problem of people, you know, wanting 

to be known for overutilizing the mental health system. That is the 

last problem we have, with stigma being what it is. 

The key here is you want—you want to actually go out there and 

proactively bring people in and treat them. You are absolutely 

right, you want to go out there and screen them preemptively. In 

fact, when we—we passed the autism bill this year about trying to 

preactively screen children. We can avoid over 50 percent of the 

most costly disabling aspects of autism in this country with 

prescreening of children, babies from 0 to 2. Problem with mental 

health is that the babies have—part of their cognitive is covered by 

physical, and part of it is covered by mental health. The irony is 

part of it is 100 percent reimbursement for the physical part of the 

brain, and 40 percent reimbursement for the mental health part of 

the brain. You go figure it out. 

We have had these incredible testimonies where parents are having to try to get their health network to get preauthorization for 

therapy for their autistic child. It makes no sense. 

So, the point of mental health parity is to treat the whole person 

and to treat them together and not have two separate, you know, 


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authorization systems. You are right, and to get in there early and 

treat them and identify them, you know, early, and with education—we have a 35 percent dropout rate in my State in all my 

major cities. A lot of that is because kids are—you know, drugs, alcohol, they come from broken homes. A lot of them—you know 

what the factors are. If a child comes from a home with a depressed parent, with a parent who is on drugs or alcohol, a parent 

who has been incarcerated, you know those children are at high 

risk. You ought to be able to get in there and cover them and get 

them the mental health services early on, and that should be a 

matter of public policy. It will save us a lot of money. 

Mr. KIND. It just seems intuitive. The better we get at early 

identification, the more effective the treatment is going to be, and 

the better we are going to be able to avoid major problems down 

the road and save a tremendous amount in the process. So, thank 

you both again for what you have been doing. 

Thank you, Mr. Chairman. 

Chairman STARK. Thank you. 

I want to thank both of you for being here. Jim, I know you will 

rejoin us here. Patrick, you are welcome to—I am sorry. Did you 

want to inquire, Mrs. Tubbs Jones? 

Ms. TUBBS JONES. I do, Mr. Chairman. Thank you very much. 

I apologize. I have been in and out. 

But to my colleagues, Mr. Ramstad and Mr. Kennedy, thank you 

so much. I stepped out, and I was talking to a friend on the phone, 

and this friend of mine from Cleveland had a daughter, manic-depressive, who was just in terrible condition. Finally one day I just 

went over to her house, put her in a police car, took her to the hospital and got her treatment, and I am just so proud to say that now 

this woman is a physician. She has graduated from medical school. 

She is married, is having a baby in September. So I am so excited 

about the kind of work that can happen for families when they are 

given what they need, and I just thank both of you for your leadership on this issue. 

Throughout my career I have been involved in all kinds of situations where mental health support is so important. So, I am 100 

percent with you on parity, and I join you. Tell me what I can do 

to be helpful. I am there for you. 

Thank you, Mr. Chairman, for the opportunity. 

Mr. KENNEDY. Well, you hit the nail on the head. Most of our 

mental health dollars go to the Department of Corrections. That is 

our biggest mental health system right now. Frankly, we are 

spending oodles of money through special ed, through special education, through our justice system, through our workers comp system. You wouldn’t believe the testimony we have heard from people 

coming in sick complaining of undiagnosed back pain or irritable 

bowel syndrome. It has nothing to do with that. We waste so many 

billions of dollars on tests for undiagnosed pain that is really psychological and depression. The people just want—though they don’t 

know it, they have severe depression, and accentuates other things 

in their bodies. You know, as a society we ought to get with the 

program and just realize you are treating the whole person, and 

that is why it is so vital to pass this legislation. 

Ms. TUBBS JONES. Thank you. 


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Chairman STARK. Mr. Becerra? 

Mr. BECERRA. Thank you, Mr. Chairman, and to our two colleagues and witnesses, thank you very much not for the testimony 

today, but for your championship of this issue for so many years. 

Most folks don’t realize it, but in the city of Los Angeles we have 

a city within a city. On any given day there is some 80 to 85,000 

homeless people in the city of Los Angeles, most of whom could use 

some not just health care, but mental health care. We could probably address a great deal of the homeless issue if we were to provide a number of these folks with some basic mental health services. So as you go about your task, we are going to be able to address so many ancillary issues in addressing this parity issue for 

mental health within the health care system. So, thank you for 

championing this cause for so many years. Thanks for being here 

today. But we appreciate what you are doing and have done for a 

long time. So, I have no questions other than to say I very much 

appreciate what you are doing today. 

Yield back, Mr. Chairman. 

Chairman STARK. Again, I want to thank the panel. 

Mr. KENNEDY. Mr. Chairman, one last thing. In Los Angeles, 

it has been great to work with Grace Napolitano, who has been 

championing this issue with Latinas. Latinas have the highest suicide rate of any group in the country. As Jim said, suicide rate is 

twice the rate of homicide in this country. Over 34,000 people kill 

themselves a year, and 90 percent of those are people with a 

diagnosable mental disorder, meaning you could prevent those suicides with treatment. That is a public health epidemic that we 

could address in this country. 

Mr. BECERRA. Patrick, when you add to the fact that within the 

teenage population, Latinas, female Latinos, are the most likely to 

commit suicide, with the fact the Latino community is the least 

likely to be insured, you have a chemistry that is going to explode. 

So, we thank you very much. 

Mr. KENNEDY. Thank you. 

Chairman STARK. Thank you both. Please join us. 

I would like to now welcome a panel that consists of Dr. David 

Shern, president and CEO of Mental Health America from Alexandria, Virginia; Dr. Michael Quirk, who is the director of Behavioral 

Health Service, Group Health Cooperative from Seattle, Washington; Ms. Kathryne Westin, who is a member of the Eating Disorders Coalition for Research, Policy and Action, who is here. 

In a moment, I would like to recognize Mr. Ramstad. 

Mr. RAMSTAD. Thank you, Chairman Stark, again. I am 

pleased to have the privilege of introducing my very good friend 

and colleague in this effort, Kitty Westin of Minnesota. Kitty 

Westin is one of the most dedicated mental health advocates in our 

Nation, certainly one of the most dedicated advocates of any kind 

I have ever worked with. 

I have had the pleasure and privilege of working closely with 

Kitty Westin to end discrimination against people with eating disorders and other forms of mental illness and addiction. As the 

mother of a precious child, her daughter Anna who died from anorexia on February 17, 2000, no one, no one understands better the 


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need for a comprehensive and balanced approach to mental health 

care than Kitty Westin. 

Today Kitty is honoring the legacy of her daughter Anna through 

the Anna Westin Foundation, which she started. Kitty is president 

of the Anna Westin Foundation and also president of the Eating 

Disorders Coalition. 

Kitty, thank you so much for coming on short notice and for 

being here to testify here today. 

Chairman STARK. Thank you, Mr. Ramstad. 

Welcome to the witnesses. We will start with Dr. Shern, and, 

Doctor, please inform us in any way you are comfortable. Your entire written testimony will appear in the record without objection, 

and we will look forward to your summation. 

Doctor, can you do two things: Turn the microphone on and pull 

it as close as you can. 

Mr. SHERN. How is that? 

Chairman STARK. That is much better. 

STATEMENT OF DAVID L. SHERN, PH.D., PRESIDENT AND CEO, 

MENTAL HEALTH AMERICA, ALEXANDRIA, VIRGINIA 

Mr. SHERN. Well, it is a great honor to be here and to participate in these historic hearings. It is great to be testifying to you, 

Representative Stark, given, you know, your tradition of leadership 

on that. 

Mr. Camp, your remarks have also indicated the severity of the 

issue and your support for good, sensible approaches. 

It is also a great honor to be testifying with Jim Ramstad and 

following Patrick Kennedy. As so many of you have noted, they 

have shown extraordinary personal courage in terms of their own 

experiences and the importance for them in their life of having access to equitable and effective care. In fact, they have done such 

a good job of summarizing not only their personal experience, but 

most of the relevant facts in this matter that they have essentially 

delivered my entire testimony, and I very much appreciate that. 

What I would like to do then is to offer sort of some summary 

remarks and perhaps pull together some themes that might be 

helpful in terms of the way we think about—think about this problem. 

First a word about our organization. We are Mental Health 

America. Until November 16, we were known as the National Mental Health Association, and we decided to change the name of our 

organization on November 16 to underline the important integration of health and mental health issues. We firmly believe that 

when we reflect back on this time—and I think it is so clearly indicated by so many of the comments this morning from the Committee as well as from Representatives Kennedy and Ramstad— 

when we reflect on this time, we will say that finally during this 

era, we realized, as Representative Kennedy said so clearly, that 

there is no meaningful separation between our mind and our body, 

our brain and our body, our mental and our physical health; that, 

in fact, they are one and the same. 

You know, when Surgeon General David Satcher was asked by 

Vice President Gore at the time to begin a Surgeon General’s report on mental health, he was quite skeptical about whether or not 


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the science base was really there and ready for a Surgeon General’s 

report on mental health. When he concluded the work, not only 

was he no longer skeptical, but he was astounded at the strength 

of our science base. 

We now know clearly that mental health conditions are real illnesses, they are reliably diagnosable, and they are effectively treatable. It is critical, as was noted earlier by the Committee, that we 

move access up, we identify persons earlier and get them to receive 

effective treatment. 

These are the most disabling illnesses. In 2001, the World Health 

Organization estimated that 36 percent of all disability related to 

illness in the United States, Western Europe and Canada is directly attributable to mental health and substance abuse conditions, 36 percent. That far outstrips every other medical condition 

in terms of their severity. 

We have to do a better job. It is shameful that we continue to 

discriminate and frustrate access to these conditions. The cost data 

have been very adequately summarized by Mr. Ramstad and Kennedy. There is no longer a cost concern. The FEHB study, which 

was published in the New England Journal and that was mentioned earlier, clearly, clearly demonstrates that with a full spectrum of conditions embodied in the DSM 4 being eligible for care, 

there is no net increase in costs. Zero net increase in cost. This is 

the only study this has actually used a comparison group, and it 

is a very important distinction which allows for us to take a look 

at what is normally happening in terms of health care coverage. 

The cost arguments are off the table. 

Additionally, we have come to fully understand the importance 

of comorbidity, so people with cardiac disease or diabetes that have 

untreated, undiagnosed mental illnesses do much worse, have 

much higher mortality rates and greater expenditures. 

As everybody noted this morning, when we talk about cost, it is 

very important to think of it comprehensively in terms of cost to 

family, cost to the criminal justice system, excess mortality and 

morbidity for persons who have general health conditions who don’t 

receive appropriate care. 

Ladies and gentlemen, the science is clear. The cost data are 

clear. The equity considerations are clear. There is no ambiguity. 

It is nonsense for us to not have equal access to behavioral health 

care for persons in this country. Thank you very much. 

Chairman STARK. Thank you. 

[The prepared statement of Mr. Shern follows:] 

Prepared Statement of David L. Shern, Ph.D., 

President and CEO, Mental Health America, Alexandria, Virginia 

Mr. Chairman and Members of the Subcommittee: 

Mental Health America (MHA) is the country’s oldest and largest nonprofit organization addressing all aspects of mental health and mental illness. In partnership 

with our network of 320 State and local Mental Health Association affiliates nationwide, MHA works to improve policies, understanding, and services for individuals 

with or at risk of mental illness and substance use disorders. The organization was 

established in 1909 by a young businessman who struggled with a mental illness 

and created a national citizens’ group to promote mental health and improve conditions for those living with mental illness. Last November we changed our name from 

the National Mental Health Association to Mental Health America in order to communicate how fundamental mental health is to overall health and well-being. 


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1 ‘‘Depression a Leading Contributor to Global Burden of Disease.’’ H. Worley. Population Reference Bureau. June 2006. As Retrieved on http://www.prb.org/Template.cfm?Section=PRB& 

template=/ContentManagement/ContentDisplay.cfm&ContentID=13891. 2Mental Health. Guide to Community Preventive Services Website. Centers for Disease Control and Prevention. www.thecommunityguide.org/mental/. Last updated: 06/14/2005. 3 ‘‘Global Mental Health.’’ Kastrup, M.C., and B.R. Ramos, Danish Medical Bulletin. Vol. 54, 

No. 1, Feb. 2007, pp. 42–3. 4 ‘‘Mental Health: A Report of the Surgeon General,’’ 1999. 

5 ‘‘National Institute of Mental Health, Depression: A Treatable Illness,’’ NIH Publication No. 

03–5299. 04. http://menanddepression.nimh.nih.gov/infopage.asp?id=15. Rockville, MD; National 

Institute of Mental Health: 2004. 6 ‘‘Surgeon General,’’ p. 23. 

Mr. Chairman, we appreciate your longstanding commitment to advancing the 

cause of mental health equity and to modernizing mental health coverage under 

Medicare, and are very pleased to have the opportunity to testify today. From the 

vantage point of this organization’s long history, it is almost tragic that passage of 

legislation outlawing inequitable mental health coverage should remain unfinished 

business at the door of the 110th Congress. We welcome your holding an early hearing on this issue, and applaud the legislation you are considering today. 

Whatever the prism—whether from the perspective of science, medicine, ethics, or 

economics—there is simply no foundation for erecting or maintaining artificial barriers to needed mental health care, whether under the Medicare program or employer-provided coverage, especially when those barriers are higher than those governing access to care for any other illness. Indeed, it has long been our position that 

the Federal Government should ensure, as a matter of law, that public and private 

health plans afford people access to needed behavioral health care on the same 

basis, and subject to the same terms and conditions, as care and treatment for any 

other illness, without regard to diagnosis, severity or cause. 

Mental health is essential to leading a healthy life and to the development and 

realization of every person’s full potential. Yet mental illness and substance use disorders are leading causes of disability and premature mortality. Research has 

shown that depression is ‘‘now the fourth-leading cause of the global disease burden 

and the leading cause of disability worldwide.’’ 1 The CDC reports that ‘‘mental disorders are the second leading source of disease burden in established market economies.’’ 2 A recent paper citing World Health Organization data report that there are 

‘‘450 million people who suffer at a certain point of a neurological, psychiatric or 

behaviour related disease, and about 25% of all the inhabitants in the world get a 

psychiatric or behavioural disorder at a certain moment in their life.’’ 3

According to the landmark 1999 Surgeon General report on mental health, ‘‘Mental disorders are treatable . . . there is generally not just one but a range of treatments of proven efficacy.’’ Also, this report stresses the importance of combining 

both pharmacologic and psychosocial therapies for best outcome.4 Treatment modalities for mental and substance use disorders are effective at producing full or partial 

remission of symptoms. In individuals with depression, research has shown that approximately 80% can recover with appropriate diagnosis, treatment and monitoring.5 Yet all too often people with diagnosable mental disorders do not seek treatment. ‘‘Concerns about the cost of care—concerns made worse by the disparity in 

insurance coverage for mental disorders in contrast to other illnesses—are among 

the foremost reasons why people do not seek needed mental health care,’’ 6 the Surgeon General observed. 

Health insurance plans have long imposed barriers that limit access to needed behavioral health care with far-reaching and often tragic results. No comparable barriers limit access to needed care for ANY other illness. That such discriminatory 

practices have continued—more than a decade after enactment of the Americans 

with Disabilities Act, some 40 years after the adoption of the first modern civil 

rights’ laws, and nearly a century since this organization’s establishment as a movement based on principles of social justice—attests to the deep-rootedness of the stigma surrounding behavioral health disorders. But that such ongoing arbitrary discrimination should be countenanced by Federal law is shameful. 

The need to establish benefits-parity must be understood not simply in terms of 

equity and social justice, but in human terms. So let me put a human face on it 

and tell you briefly about Ruth, a woman with a more than 20-year history 

of battling major depression, so severe that she once attempted to end her 

life. Mental health care, covered by her husband’s employer, a Fortune 500 

company, has helped keep the illness in check. But she reported to us that 

she recently learned she had reached her health plan’s LIFETIME outpatient mental health care limit of 90 visits—a limit of which she was unaware. She chillingly reported, ‘‘I’m afraid I will have to discontinue at 


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7 ‘‘Interim Report to the President,’’ New Freedom Commission on Mental Health, p. 14, 2002. 

8 ‘‘Mental Health Parity Act: Despite New Federal Standards, Mental Health Benefits Remain 

Limited,’’ United States General Accounting Office, p. 21, May 2000. 9 Id. at pp. 13–14. 

10Federal Employee Health Benefits Program Carrier Letter, April 11, 2000. 11The Employer Retirement Income Security Act of 1974 (ERISA) allows employers to offer 

uniform national health benefits by preempting States from regulating employer-sponsored benefit plans. Thus, while States can regulate health insurers, they are unable to regulate employee 

benefit plans established by employers. Federal parity legislation explicitly amends ERISA to 

ensure that self-insured employer health plans are subject to Federal parity requirements. (See 

H.R. 1402, 109th Congress.) 12 Barry, C.L., R.G. Frank, and T.G. McGuire. ‘‘The Costs of Mental Health Parity: Still an 

Impediment?’’ Health Affairs. Vol. 25, No. 3, pp. 623–634. 

least the therapy which will leave me floundering in depression with suicidal tendencies.’’ Is it conceivable that a health insurer would impose a lifetimecoverage bar on people with any other illness, let alone one that is life-threatening? 

In considering that question, it is important to note that some 30,000 Americans 

take their lives every year to what the President’s New Freedom Commission on 

Mental Health characterized as a largely preventable public health problem.7

The widespread practice of providing unequal coverage for behavioral health and 

other medical care not only limits access to needed care, but subjects many Americans to the risk of major financial losses from out-of-pocket costs. At the most profound level, these practices reinforce the poisonous stigma underlying disparate 

treatment of ‘‘others.’’ That disparate coverage of behavioral health should be both 

routine and lawful is not only morally offensive, but—in our view—fosters a climate 

that tolerates other forms of discrimination and tends to weaken the fabric of equalopportunity laws. 

Congress took a first step toward ending discriminatory insurance practices when 

it enacted the Mental Health Parity Act of 1996. The Act established the principle 

that there should be no disparity in health insurance between mental health and 

general medical benefits. By its terms, however, the Act provided only that employer 

health plans that cover more than 50 employees and that offer mental health benefits may not impose disparate annual or lifetime dollar limits on mental health care. 

The 1996 Act represented an important milestone, but has not produced fundamental changes. People with or at risk of behavioral-health disorders still face widespread, arbitrary discrimination in insurance plans. As the General Accounting Office (GAO) reported in reviewing the Act’s implementation, the vast majority of employers it surveyed complied with the 1996 law, but substituted new restrictions and 

limitations on mental health benefits, thereby evading the spirit of the law.8 As 

GAO documented, employers routinely limited mental health benefits more severely 

than medical and surgical coverage, most often by restricting the number of covered 

outpatient visits and hospital days, and by imposing far higher cost-sharing requirements.9

Although subsequent efforts to enact a comprehensive Federal parity law have 

been unsuccessful, the Federal Government further advanced the principle of parity 

by requiring participating insurers under the Federal Employee Health Benefits 

program (FEHB), which covers Federal employees (including Members of Congress), 

retirees and dependents, to equalize behavioral-health and other health benefits for 

all conditions in the DSM IV as of January 2001.10

Most States have adopted laws requiring parity between mental health and general health benefits in group health insurance. But those State laws vary widely in 

scope, and, under Federal law, do not govern the health plans of the many employers who elect to self-insure.11

The Cost of Parity 

Those who oppose parity legislation often assert that it will add to the cost of 

health care. But the assumptions and models on which parity-opponents have relied 

have actually been overtaken by major changes in insurance practice as well as 

changes in clinical practice, and subsequent studies have obliterated the foundations 

for the assertion. Nevertheless, the myth that parity will increase costs retains a 

life of its own. 

As early as the 1950’s, insurers worried that intensive long-term psychotherapy 

would drive up premiums, and began excluding or setting limits on mental health 

benefits.12 The RAND Health Insurance Experiment undertaken in the 1970’s was 

particularly influential in this regard. That study, which randomly assigned families 

to insurance plans with varying deductible and co-insurance levels, provided a basis 

for inferring utilization rates based on different health insurance design. The study 

found that demand for mental health services would rise more than two times that 


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13W.G. Manning, et. al. ‘‘Effects of Mental Health Insurance: Evidence from the Health Insurance Experiment.’’ Pub. No. RAND R–3015–NIMH/HCFA. Santa Monica, CA; 1989. 14 Estimating the Costs of Parity for Mental Health, Robert Wood Johnson Foundation Workshop, May 2001. 15See, ‘‘The Costs of Mental Health Parity: Still an Impediment?’’, Barry, C.L.; Frank, R.G.; 

and McGuire, T.G.; Health Affairs, 25, no. 3 (2006), 623–634. 16 ‘‘Behavioral Health Insurance Parity for Federal Employees,’’ New Eng Jnl of Medicine, 354, 

no. 13, (March 30, 2006); 1378–1386. 17 ‘‘An Employer’s Guide to Behavioral Health Services,’’ National Business Group on Health, 

November 2005. 18See Hackett, J.T., CEO of Ocean Energy Inc., testimony before the Subcommittee on Health 

of the Energy and Commerce Committee, House of Representatives, July 23, 2002. 

for general medical care with better health benefits.13 Thus, the research showed 

that mental health services are more price elastic, and that if patients pay less, in 

the form of copays and deductibles, they will use more services, and vice-versa. The 

RAND estimates were based on unmanaged fee-for-service indemnity arrangements. 

But insurance practices have changed markedly, with fee-for-service indemnity coverage having largely disappeared and with the advent of managed care techniques. 

In addition to the development of cost-control mechanisms other than benefit design, 

changes in clinical practice—to include the development of new, more effective psychotropic medications and short-term psychotherapy—have also contributed to lowering the cost of mental health care.14 In this environment, studies have repeatedly 

shown that the implementation of parity, which has consistently been accompanied 

by the use of managed care, has not resulted in significant increase in cost.15

The largest study of parity to date analyzed 4 years of data in evaluating the experience with mental health and substance use parity under the Federal Employees 

Health Benefits program (FEHB). The evaluation, commissioned by the Department 

of Health and Human Services, was undertaken by Dr. Howard Goldman of University of Maryland School of Medicine as the Principal Investigator, who led a team 

that included Northrup Grumman Information Technology, RAND, Weststat, and 

Harvard Medical School’s Department of Health Care Policy. The extensive evaluation study analyzed benefits data for ALL FEHB plans, and studied claims data on 

access, utilization, and cost for a subset of FEHB plans that covered 3.2 million 

beneficiaries, and compared this data for nine FEHB plans (for the 2-year period 

prior to parity and the 2-year period under parity) with matched data from nine 

non-FEHB plans. The FEHB plans were selected for in-depth study on the basis of 

characteristics on which they were likely to differ—geographic location; breadth of 

parity under State law, differences in plan types and structure, and size of the enrollee population. The study found that all FEHB plans complied with the parity 

policy; most plans enhanced their mental health and substance use benefits (84% 

changed the amount, scope or duration of MH benefits and 75% changed cost-sharing requirements); and that there was no evidence of changes in general medical 

care benefits resulting from the parity policy. Further, the evaluation showed that 

parity was implemented with some increase in utilization of mental health care but 

the increase in utilization was consistent with ‘‘secular trends’’ (i.e. consistent with 

the increase experienced in the matched non-FEHB plans). Of particular significance, while the cost of mental health care did increase, that increase was in line 

with the experience in matched plans that did NOT provide parity. The study concluded, therefore, that parity did not result in cost increases. In most plans, however, beneficiary out-of-pocket costs declined. In terms of a ‘‘bottom line,’’ this exhaustive study showed that the parity policy was implemented as intended with little or no significant impact on access, spending, or quality, while in most instances 

providing users of mental health and substance use care with improved financial 

protection.16 It is certainly a very powerful study, and should provide strong assurance that employers can equalize medical and mental health benefits without increasing costs. 

It is unfortunate that cost has assumed such a high profile in the debate over parity. Indeed the focus on parity’s purported costs has overshadowed the more compelling reality that the real costs lie in NOT treating behavioral health disorders. The 

business community itself has come to recognize that those costs include excess 

turnover, lost productivity, absenteeism, and disability.17 And leaders in the business community have not only voluntarily provided mental health parity as part of 

their employee health coverage, but have endorsed the enactment of Federal parity 

legislation.18 But it should also be appreciated that as private insurance has limited 

mental health coverage through such practices as durational limits and higher costsharing burdens, it has shifted risk AND cost to the public sector, with that burden 

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19See 26 U.S.C.A. sec. 162(a)(1). 20 Administration on Aging, U.S. Department of Health and Human Services, Older Adults 

and Mental Health: Issues and Opportunities, 2001, p. 9. 21Medicare Rights Center, Medicare Facts and Faces, October 2001. 22The Henry J. Kaiser Family Foundation, The Faces of Medicare: Medicare and the Under65 Disabled, July 1999; National Health Policy Forum, George Washington University, Medicare’s Mental Health Benefits, February 2007, p. 6. 23The Henry J. Kaiser Family Foundation, Understanding the Health Care Needs and Experiences of People with Disabilities: Findings from a 2003 Survey, December 2003, p. 4. 24 Ibid. 25 New Freedom Commission on Mental Health, Achieving the Promise: Transforming Mental 

Health Care in America. Final Report, p. 59. 

grams and systems ranging from Medicaid to prisons, jails and juvenile justice systems. 

The discrimination in health insurance against people with or at risk of behavioral health disorders; the lack of real protection in current law against such discrimination; and the loss of life, health, and productivity attributable to these insurance barriers make it critical that Congress ensure that health plans equalize medical and behavioral health benefit structures. Federal law subsidizes employers 

through the Federal tax code for providing health insurance to employees (allowing 

the cost of insurance as an ordinary business expense).19 It is wholly appropriate, 

accordingly, for Congress to condition entitlement to this tax benefit on employers’ 

providing health benefits in a nondiscriminatory manner. 

Public Support for Parity 

A vast majority of Americans (89%) oppose insurance discrimination against people with mental health needs, according to a survey Mental Health America conducted late last year. Among its findings, the survey data showed that nearly all 

Americans (96%) think health insurance should include coverage of mental health 

care (with only 2 percent responding that health insurance should not cover it, and 

a large majority (74%) responding that insurance plans should cover substance use 

treatments at the same levels as treatments for general health issues. Significantly, 

the public’s views on mental health and addiction equity is bipartisan—83% of Republicans and 92% of Democrats support equitable health insurance. 

Mr. Chairman, Mental Health America has seen clear evidence of those views in 

its work to help organize and mount the public forums initiated by the Campaign 

to Insure Mental Health and Addiction Equity, a national clarion call on the need 

for parity that Representatives Jim Ramstad and Patrick Kennedy launched early 

this year. In town meetings across the country, the Equity Campaign has powerfully 

documented the profound effects that discriminatory insurance practices have had 

on individuals and on the Nation, ranging from job loss and reduced productivity, 

to increased general health care costs and costs to public systems, to loss of life. 

That compelling testimony can be found on our equity website, www.equitycampaign. 

net. 

Since initiating their Campaign, Representatives Kennedy and Ramstad have introduced the Paul Wellstone Mental Health and Addiction Equity Act of 2007. That 

legislation, H.R. 1424, reflects the longstanding views of Mental Health America, and 

we enthusiastically support House passage. 

Medicare 

Today, millions of older Americans and people with disabilities face mental illness, often without the services and supports they need. Some 20 percent of older 

Americans experience mental disorders, such as anxiety disorders, mood disorders 

(including depression and bipolar disorder), and schizophrenia.20 However, twothirds of older adults living in the community who need psychiatric services do not 

receive them.21

Furthermore, individuals receiving Medicare because of a disability also frequently experience mental illness. Some estimates indicate that over 50 percent of 

beneficiaries whose Medicare eligibility is based on disability have some kind of 

mental disorder 22 and according to a survey by the Kaiser Family Foundation, over 

two-thirds say they often feel depressed.23 Moreover, psychiatric disorders, such as 

schizophrenia, bipolar disorder, and depression, were the second most commonly reported conditions among beneficiaries with disabilities.24

The President’s New Freedom Commission on Mental Health stated in its final 

report that ‘‘[t]he number of older adults with mental illnesses is expected to double 

to 15 million in the next 30 years . . . [and] [m]ental illnesses have a significant 

impact on the health and functioning of older people and are associated with increased health care use and higher costs.’’ 25 The Commission recommended that 


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26 Id., p. 26. 27Letter to Representative Pete Stark from Substance Abuse and Mental Health Services Administrator, Charles G. Curie, U.S Department of Health and Human Services, including a report comparing utilization rates and payments for mental health and substance abuse treatment 

services provided through Medicare, Medicaid, and private insurance, May 22, 2002. 

‘‘[a]ny effort to strengthen or improve the Medicare and Medicaid programs should 

offer beneficiaries options to effectively use the most up-to-date [mental health] 

treatments and services.’’ 26

Access to treatment through the Medicare program has long been restricted by 

outdated and discriminatory policies. One of the primary barriers to mental health 

care for Medicare beneficiaries is the 50 percent co-insurance rate imposed on outpatient mental health treatment, instead of the usual 20 percent co-insurance 

charged for other outpatient services. 

Mr. Chairman, we commend you for your leadership in introducing legislation in 

the past to repeal the higher co-insurance rate for outpatient mental health services 

as well as addressing other limits on mental health coverage in Medicare. 

Limits on outpatient care in Medicare have resulted in much higher utilization 

of expensive inpatient care among Medicare beneficiaries than other populations. 

According to an analysis by the Substance Abuse and Mental Health Services Administration (SAMHSA), ‘‘Medicare beneficiaries are much more likely than Medicaid beneficiaries to receive inpatient mental health and substance abuse care, if 

they receive any mental health or substance abuse services at all’’ and ‘‘Medicare 

beneficiaries are less likely than Medicaid beneficiaries to receive mental health and 

substance abuse treatment in ambulatory outpatient facilities.’’ Moreover, when 

Medicare beneficiaries do receive inpatient care, the care is more intensive, presumably because these individuals have not been able to access adequate outpatient 

care. According to SAMHSA, ‘‘Medicare annual costs per claimant for inpatient mental health and substance use services are higher than costs for Medicaid.’’ 27

Medicare also imposes a 190 lifetime cap on inpatient days in free-standing psychiatric hospitals. For other illnesses and injuries, the inpatient hospital coverage 

limit is 150 days, but that limit applies to each period of illness, and the clock is 

reset each time a person is out of the hospital for over 60 consecutive days. The 

mental health limit is calculated on a cumulative basis over each individual’s lifetime. This lifetime limit is most likely to affect beneficiaries with serious mental illnesses who often have multiple hospitalizations. Limiting coverage of specialty psychiatric facilities undoubtedly creates significant barriers to care in communities 

where the general hospitals lack psychiatric capacity. 

Improved access to outpatient services would reduce the need for costly inpatient 

psychiatric care by Medicare beneficiaries. Many individuals with more severe mental disorders require intensive outpatient care, but Medicare does not currently 

cover many of these types of services, including psychiatric rehabilitation, intensive 

case management, assertive community treatment, and residential detoxification 

services. Access to these intensive outpatient services would help fill gaps in the 

continuum of mental health care covered by Medicare. 

Again, Mr. Chairman, we applaud your leadership in addressing these shortcomings in mental health care under Medicare as well. 

f 

Chairman STARK. Dr. Quirk, would you like to enlighten us? 

STATEMENT OF MICHAEL QUIRK, PH.D., DIRECTOR, BEHAVIORAL HEALTH SERVICE, GROUP HEALTH COOPERATIVE, 

SEATTLE, WASHINGTON 

Mr. QUIRK. Chairman Stark, Mr. Camp, thank you very much 

for the invitation to participate today. I am Mike Quirk from Group 

Health Cooperative. I am the director of Behavioral Health Service 

from Seattle, Washington. I would like to share with you some of 

Group Health’s views on parity. First of all, Group Health is a 

health care system that has 560,000 residents from the State of 

Washington and northern Idaho that receive medical care from us. 

Seventy percent of that care occurs in our owner-operated facilities. 


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Within Behavioral Health we see 30,000 new patients every year, 

which equates to a total of 200,000 patient contacts. 

Let me just comment a little bit about the nature of Behavioral 

Health. These conditions are highly prevalent. Twenty-five percent 

of us in any given year will have a psychiatric disorder or a chemical dependency problem. Fifty percent of us will have such a condition over the course of our lives. Most of us choose to get this care 

from primary care providers, nutritionists, family doctors, general 

and internal medicine physicians. Accordingly, we have a collaborative approach in that regard. Those patients that come to see us 

are the most ill. They are also the ones who prefer privacy and talk 

therapy. 

The care is effective to the extent that it is evidence-based, which 

means that it is related to interventions that make a difference in 

people’s lives; and the care is successful, meaning that you can get 

in. 

Let me talk a little about Group Health’s view in relationship to 

parity. Group Health is the only health system in the State of 

Washington that has supported parity in our State legislature. We 

are very much aware of the concerns in regards to mandates, relative to flexibility, and also in regards to cost. 

In relationship to flexibility, our recommendation to you is to 

craft Federal parity so it is organized around medical management 

principles. We believe that will increase the flexibility for patients. 

By medical management, I mean two things. I am talking about 

medical necessity, making sure you are providing services to people 

with conditions that can profit from them. I am also talking about 

appropriate care, which means provide as much as is necessary to 

help people return to their previous levels of functioning. No less, 

no more. 

In support of our views, the New England Journal of Medicine 

published an article last year that reviewed the experience with 

Federal employees and parity, and essentially they demonstrated 

that, with use of medical management principles, good insurance 

was assured, and quite affordably as well. So, what would medical 

management look like at Group Health? 

Basically for patients with mild conditions they would come in to 

Behavioral Heath Service and we would provide counseling services. So, services are basically in support of helping people with 

their coping skills to deal with life adjustment. 

For people with major psychiatric disorders that are uncomplicated, most of those people are seen in primary care for medicine, 

in relationship to which we have a consultative and a collaborative 

role. In other words, our psychiatrists help them with selection of 

medicines and the dosing and the duration. Our psychotherapists 

help when supplementary counseling is necessary. 

For patients who have major complicated severe illness, they are 

seen for a prolonged course in Behavioral Heath by a psychiatrist 

and our nurses. Our goal is to work with them so that they are stabilized and they have good lives. 

So, essentially what does parity mean to those of us at Group 

Health? It means a great deal. 

As Americans, we all want a good run at life. If you have a psychiatric disorder or if you have a chemical dependency problem, 


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you have obstacles in your way. With parity, many of those obstacles are taken away. With medical management principles, there is 

a greater likelihood of an even playing field with higher assurance 

of access, availability, good results, and affordability. 

So, I am from the other Washington. I don’t know all the details 

in regards to the various points of view relative to the different 

types of legislation, but I think the things that were uniform in relationship to what I have heard consistently today is to support 

parity for the future. 

So, as I conclude, I just want to particularly thank Congressmen 

Ramstad and Kennedy for their courage and their leadership in regards to this important legislation, and Congressman Stark as 

well. 

I also want to acknowledge Congressmen Baird and McDermott 

for their professional and political support of this important legislation not only here but in the State of Washington as well. Thank 

you. 

[The prepared statement of Mr. Quirk follows:] 

Prepared Statement of Michael Quirk, Ph.D., Director, 

Behavioral Health Service, Group Health Cooperative, Seattle, Washington 

Good morning, Chairman Stark and Members of the House Ways and Means Subcommittee on Health. I am Mike Quirk, clinical psychologist, and director of the Behavioral Health Service at Group Health Cooperative, Puget Sound, which is based 

in Seattle, Washington. 

Thank you for inviting me to be here this morning, as you think through how to 

best address mental health and substance abuse parity through Federal legislation. 

Despite the difficult decisions ahead, we are here today to discuss how—not whether—to pass a bill on this important issue. And I thank you for your leadership in 

getting us to this point. 

I would like to take a few minutes to tell you about Group Health Cooperative’s 

history and experience on the issue of mental health parity, why we support equity 

of mental health and medical care, and what we see as the essential elements of 

a successful parity bill. We see a critical role for the Federal Government on this 

issue, and believe that national mental health parity policy will work best if it allows carriers the flexibility to design coverage and services that will benefit both 

individual patients and whole populations of people with similar problems, such as 

depression, anxiety, schizophrenia, bipolar disorder, and ADHD. 

First, let me introduce you to Group Health Cooperative: Group Health is a nonprofit health care system that provides both coverage and care. We cover more than 

560,000 residents of Washington State and northern Idaho, about 70% of whom receive care in Group Health owned-and-operated medical facilities. 

Group Health’s Behavioral Health Services provides care to patients with mental 

and chemical dependency disorders, including adults, adolescents, and children. We 

see 30,000 new patients every year, with a total of 200,000 patient contacts per 

year. We believe that the best way to better health is via high-quality evidencebased care. And in our integrated behavioral health and medical delivery systems, 

we believe that access to care is the first and one of the most important roads leading to quality. 

Mental health concerns are highly prevalent, affecting about one-quarter of all 

adults in the U.S., with variable but often very high impact on health and productivity. But such disorders are also generally treatable, as long as patients have access to mental health care coverage, and to a behavioral health provider. 

At Group Health, access to appropriate, necessary care is priority one. We bring 

together our behavioral health service with our medical team to take care of the 

whole patient. For example, patients with depression benefit from closely integrated 

mental health and primary care services. 

In 2005, Group Health was the first coverage provider in Washington State to 

support legislation—which subsequently passed—on mental health parity in the 

large group market. Washington State now has one of the most progressive mental 

health parity laws in the country. And Group Health was the only health plan to 

support coverage in the individual market, which just passed our State legislature. 


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1Goldman, HH, Frank, RG, Burnam, MA, et. al. Behavioral Health Insurance Parity for Federal Employees. N Engl J Med 2006; 354:1378–86. 

Washingtonians are benefiting from the State’s mental health parity law. But 

with your leadership, we can and should go one step further. Federal parity legislation would extend this protection nationwide, protect those covered by self-funded 

employers, and further improve equity of Washingtonians’ access to needed mental 

health and substance abuse services. 

Parity benefits all sides of the health care system: it allows for flexibility in planning care, has a modest impact on cost, and reduces the likelihood that coming to 

or staying in necessary services is obstructed because of financial barriers to care. 

But in order to achieve its greatest possible positive impact, Federal mental 

health parity legislation must balance the requirement of parity with the flexibility 

to clarify the basis for care and the nature of services to fit the individual patient 

and for populations of patients with similar problems. This requires the following 

things: 

First, Federal legislation should allow carriers like Group Health the flexibility 

to make reasonable determinations of medical necessity in order to determine who 

will benefit from care. 

Second, Federal legislation should ensure that the clinical care will be appropriate 

and effective, and that patients have access to services which will reduce symptoms 

and return them to a reasonable level of functioning as quickly as possible. 

These points get to the heart of making mental health parity work. Research on 

parity for Federal employees has shown that parity of coverage of mental health and 

chemical dependency services, when combined with effective care management, can 

lead to greater fairness and insurance protections without significant adverse consequences for health care costs.1

And these points support the goal that I and my colleagues at Group Health hold 

personally and professionally dear: To care for the greatest number of patients possible who will benefit from these services, in the most effective and efficient way. 

In policy terms, this means combining transparency around medical necessity criteria with quality improvement programs and adequate appeals processes, because 

patients should be apprised of how we make clinical decisions so that they can understand them and if needed challenge them. It means providing care and coverage 

for the right set of treatable conditions, and allowing providers to work with patients to find the right treatment plan. Finally, it means finding the right balance 

between ensuring access and making sure that resources are maximized to provide 

care to as many as possible of patients in need. 

In human terms at Group Health, this means working with patients with mild 

mental disorders to tailor and tune new coping mechanisms to adapt to challenging 

life events. It means integrating the mental health and primary medical care of patients with major but uncomplicated mental disorders, helping them to stay active 

and to interpret their experiences in a constructive way, while taking any needed 

medications as long as is appropriate. And it means providing the most challenged 

patients with ongoing case management assistance from a nurse or team of providers who can help them glue together their personal lives, work lives, and medical 

care to keep the ball rolling. 

Because really, every single one of us just needs to keep the ball rolling. All any 

of us want is a good run at a healthy life, but people with mental illness have set 

off running on a path confounded by obstacles. Parity allows us to remove many of 

the financial obstacles. At the same time, the flexibility to ensure that care is necessary and appropriate helps us steward this limited resource so that behavioral 

health services will continue to be affordable for all. 

Finally, Federal legislation should protect the progress that has been made in 

States like Washington, and should not inhibit States from finding new or innovative ways to bring mental health and substance abuse services to people who need 

access. Over the last 2 years, we have made significant improvements in access to 

mental health care for people in Washington State. I hope that Federal parity legislation will help us bring care to even more. 

I thank you for your attention, and for considering my recommendations, from the 

perspective of one who has provided mental health services for over 20 years. I hope 

you will think of Group Health as an ally and advisor as you move forward with 

legislation. And now I welcome your questions. 

f 

Chairman STARK. Thank you. 


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Thank you. I am now most pleased to have Ms. Westin testify. 

She has also, as our first panel, had serious tragedies in her own 

life, which she has turned into a crusade, if I may. 

We are happy to have you here to let us join with you in your 

efforts. Why don’t you proceed? 

STATEMENT OF KATHRYNE L. WESTIN, M.A., L.P., EATING 

DISORDERS COALITION FOR RESEARCH, POLICY AND ACTION 

Ms. WESTIN. Thank you, Mr. Chairman and Members of the 

Committee. It is really an honor to be here today, but it also feels 

like a huge responsibility because I realize that I am a voice for 

the millions of Americans who are suffering from mental illness 

and who are being denied care by their insurance companies. I just 

realized this morning that I am also a voice for the 30,000 Americans that committed suicide last year. So, I take this very seriously. 

I understand this better than most, because when my daughter 

needed care, she was denied treatment by our insurance company. 

My family’s experience illustrates the suffering and the almost unspeakable consequences when insurance companies are allowed to 

discriminate against people with mental health issues. This discrimination is killing people and we have to stop it as soon as we 

can. 

But before I talk about parity, I really want to just spend a 

minute talking about Anna. Anna was an amazing young woman. 

She was spirited, gifted, talented. She was the most kind and generous person I think I have ever known. She had a future full of 

promise and possibilities until she was diagnosed with a serious illness. 

She was diagnosed with an illness that has the highest mortality 

rate of any psychiatric disorder, with a death rate of up to 20 percent. She was diagnosed with anorexia, an eating disorder. Anna 

died on February 17, 2000. She was diagnosed first when she was 

16. It was scary for us but we had good insurance and access to 

care. She was treated in an outpatient setting, and I thought she 

had fully recovered. At that time I didn’t know that treatment very 

often is a very slow process and oftentimes takes years. I was totally blindsided when she relapsed and our insurance company became an obstacle to her recovery. 

She relapsed in 1999 and we knew that she was really in a battle 

for her life, she was so sick. But, again, we were so confident that 

she would have access to the care she needed. 

We took her to a hospital. We had the very best insurance money 

could buy. We had a Cadillac insurance plan. We really believed 

and trusted that our insurance company would be part of the team 

that was fighting to save Anna’s life. I still have trouble believing 

that insurance companies are allowed to pick and choose what diseases they will cover. 

We brought her to the hospital. She was diagnosed with anorexia. The doctors recommended immediate inpatient care because 

she was in critical condition and they told her she would die. Imagine our horror when they told us to take her home until insurance 

authorized that treatment. 


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It is almost unbelievable. According to our insurance company, 

almost all of Anna’s care was, quote, not medically necessary. I 

couldn’t believe that a medical director of the insurance company 

was authorized to make decisions about Anna’s treatment without 

ever examining Anna. Those decisions proved to be fatal. 

I still have trouble understanding how someone so sick could be 

treated so casually just because of their diagnosis. I have no doubt 

that if I had brought Anna into the hospital that day with the 

same symptoms caused by some, quote, physical abnormality, she 

would have been admitted without question. She would have gotten 

the best care available and she would have stayed there until she 

was fully recovered. 

Now, I don’t blame the insurance company for Anna’s death, anorexia killed her, but I do hold them partially responsible. They repeatedly denied the coverage that her doctors were recommending. 

Her treatment team warned us that without intensive specialized 

care, Anna would die. 

Imagine an insurance company denying chemotherapy to a cancer patient. It is almost unthinkable. The insurance company’s 

statements to Anna saying that her care was not medically necessary only reinforced her own denial about her illness, which is 

a common thing for mental illness and eating disorders and, sadly 

and most tragically, their denials caused Anna to believe, because 

we were paying for her care, that she was a burden to our family 

and that we would be better off if she were dead. 

The last words she wrote in her journal were ‘‘My life is worthless right now. Saying goodbye to such an unfriendly place can’t be 

as hard as believing in it. Essentially my spirit has fled already.’’ 

Try to imagine what it would be like to watch your child struggle 

with a disease that ravages the body and the mind. I lived with 

Anna’s hopelessness and despair, and I watched her slip away from 

me. It was heartbreaking watching her fight when there were roadblocks being erected along the way, all along the way. I knew that 

much of those roadblocks were driven by ignorance and money. 

I am confident that if this comprehensive mental health parity 

bill had been in place, Anna’s chances of survival would be much 

greater and she probably would be alive today. 

Sadly, it is too late for Anna, but it is not too late for the millions 

of Americans who struggle with mental illness. The story you just 

heard isn’t unique. I hear stories like this every single day. I hear 

people. They call me, they are crying and begging for help after 

their insurance company has denied care for their child. They 

spend their savings, their retirement, their college accounts. They 

borrow from everybody they know. They have no place else to turn. 

This breaks my heart and it is outrageous that we are still fighting 

this battle. 

After Anna died, I vowed to do everything I could to fight eating 

disorders, and I started the Anna Westin Foundation and I also 

started the Eating Disorders Coalition. We are a Washington-based 

organization that is working to increase the awareness and educate 

policymakers to the devastating effects of eating disorders. We 

worked really closely with Congressman Jim Ramstad and Congressman Patrick Kennedy and we applaud your efforts—your entire efforts—to pass the mental health parity. It is just such a 


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strong piece of legislation and I urge everybody here to support this 

lifesaving legislation. 

Every day we wait, another Anna dies unnecessarily. We need 

this parity bill that includes eating disorders, substance abuse, and 

all mental illnesses. This bill will improve the lives of Americans 

with mental illness and it won’t preempt State laws, another really 

important point that has been brought up several times today. 

This bill will give people much-needed hope, and to quote Congressman Ramstad, ‘‘This is a life-and-death issue for millions of 

Americans.’’ I couldn’t agree with you more. 

Please support parity legislation and pass this bill. It will save 

lives and it will prevent the suffering that Anna faced and that her 

family has faced. 

Thank you. 

[The prepared statement of Ms. Westin follows:] 

Prepared Statement of Kathryne L. Westin, M.A., L.P., 

Eating Disorders Coalition for Research, Policy and Action 

It is an honor to be here today to talk with you about the need for mental health 

parity legislation. It is also a huge responsibility because I am speaking for the millions of Americans who are affected by mental illness and who have been denied 

treatment by their insurance companies. I am the voice for people who are vulnerable and suffering and who are desperate for your help. I probably understand this 

better than most because my daughter Anna, who suffered from an eating disorder, 

was denied care when she needed it to save her life. I am here as a mother who 

paid the ultimate price for our country’s unwillingness to pass parity legislation. My 

family’s experience illustrates the suffering and unspeakable consequences when insurance companies are allowed to discriminate against people with mental illness. 

This discrimination is killing people and needs to stop now. Congressmen Ramstad 

and Kennedy’s parity bill, with comprehensive language that includes diagnoses like 

eating disorders is a key step in saving lives. 

Before I talk about parity I want to tell you about my daughter Anna. Anna was 

a spirited, vibrant, gifted young woman. She grew up in a small town in MN with 

a family who cherished her. She had a smile that could melt your heart and she 

was one of the kindest and most generous people I have ever known. She had 

dreams, goals and a future full of promise and possibility until she was diagnosed 

with a deadly illness. Anna was diagnosed with a mental illness that affects over 

10 million American women and 1 million American men, a disease that has the 

highest mortality rate of ANY psychiatric illness with a death rate of up to 20 percent. Anna suffered from an eating disorder; anorexia. She died on February 17, 

2000; she was just 21 years old. 

Anna was first diagnosed with anorexia when she was 16 years old. I admit that 

my husband and I actually breathed a sigh of relief when she was finally diagnosed 

because once we knew what illness she had we could get on with the treatment and 

healing. We had good insurance and I was confident that she would get the care 

she needed. I really did believe the worst was over; I could not have imagined what 

was in our future. 

Anna was treated in an outpatient setting when she was first diagnosed and she 

seemed to fully recover. We were optimistic that she was back on track and that 

life would return to ‘‘normal.’’ At the time nobody told me that recovery would most 

likely be gradual and could take years. We were totally blindsided when she relapsed and our insurance became the obstacle to her recovery. 

When Anna relapsed in June of 1999 we knew that she was in for the fight of 

her life; she was extremely ill. Her symptoms included heart abnormalities, low 

blood pressure, kidney failure and dizziness but we were confident that she would 

have access to the best care available. After all, our family had the best insurance 

money could buy and we trusted that they would join us and be part of the ‘‘team’’ 

fighting to save her. We understood that by purchasing the ‘‘Cadillac’’ of insurance 

plans our family would be covered for both minor and major health problems. We 

never dreamed that insurance would be allowed to decide what illnesses are covered. I cannot even begin to describe our reaction when we learned that our insurance company had denied Anna the care her doctors told us was necessary. We had 

brought her to a hospital that specialized in treating eating disorders. She met criVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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teria for a diagnosis of anorexia and her doctors were recommending immediate inpatient care because she was in critical condition. Imagine our shock when we were 

told to take her home until the insurance company authorized her care. At first I 

thought it was a misunderstanding but I soon realized that it was not a mistake. 

According to our insurance company Anna’s care was ‘‘not medically necessary.’’ 

Suddenly we were forced to somehow ‘‘prove’’ that Anna was sick enough to get the 

care her doctors recommended. I could hardly believe that the medical director of 

the insurance company was given the authority to make decisions about her care 

without even examining her; decisions that would prove fatal. To this day I have 

trouble understanding how someone so sick could be treated so casually by insurance only because she happened to be diagnosed with a mental disorder. 

I have no doubt that if I had brought Anna to the hospital that day with similar 

symptoms caused by a ‘‘physical’’ illness she would have been admitted without 

question and she would have gotten the best care available until she was fully recovered. Instead, Anna fought her eating disorder and at a time when we should 

have been totally focused on helping Anna we were forced to put energy into fighting with our insurance company. 

I don’t blame our insurance company for Anna’s death, anorexia killed her but I 

do hold them partially responsible. Our insurance company repeatedly denied coverage for Anna’s treatment even though her treatment team (which included medical doctors, a psychiatrist, a psychologist, a dietician, and several other professionals) warned that intensive, specialized care was vital to save her life. Imagine 

an insurance company denying the necessary chemotherapy for a cancer patient. 

The insurance company’s portrayal that treatment was not medically necessary encouraged Anna’s own denial about the seriousness of her illness; a common trait of 

eating disorders. One of the most heartbreaking results of the denial was Anna’s 

belief that, because we were paying for her care, she was a burden to our family 

and we would be better off if she were dead. The last words she wrote in her journal 

were: ‘‘My life is worthless right now. Saying goodbye to such an unfriendly place 

can’t be as hard as believing in it. And, essentially my spirit has fled already.’’ 

Try to imagine what it would be like to watch your child struggle with a disease 

that ravages the body and the mind. To be a witness to the suffering, helplessness, 

and excruciating pain. I lived with Anna’s hopelessness and despair and I watched 

her gradually slip away from me. I was heartbroken watching her fight for her life 

confronted with roadblocks all along the way that were constructed by people who 

made excuses like ‘‘there is no effective treatment for eating disorders so we don’t 

pay for care.’’ I knew that money and ignorance were the driving force behind the 

denials. I am confident that if this comprehensive mental health parity law had 

been in place Anna’s chances of survival would have been greater. She would not 

have felt like a burden, she would not have been stuck in the revolving door of 

treatment that only seemed to strengthen her illness and she would have felt supported. 

Sadly, it is too late for Anna but it is not too late for the millions of Americans 

who suffer from eating disorders and other mental illnesses. The story you just 

heard is not unique; I talk to people every day who have similar experiences. I listen 

as parents cry and beg for help for their daughters and sons after insurance refuses 

to pay for care. I hear stories from families who have spent all of their savings, retirement, and college accounts and who have borrowed from family and friends and 

have nowhere else to turn. I know families who have taken out second and third 

mortgages on their homes to help cover the cost of care to save their child. It breaks 

my heart and makes me furious that we still have not passed parity and done all 

we can to insure that people get the care they need. It is an outrage that people 

who have purchased insurance and trust that they will be protected in the event 

of illness are still being denied care based on diagnosis. This IS discrimination! 

After Anna died I vowed to find a way to transform my grief and rage into something positive. Within days of Anna’s death our family founded the Anna Westin 

Foundation and within months I joined the Eating Disorders Coalition for Research, 

Policy and Action; a Washington D.C.-based advocacy organization that has been 

working to increase awareness, educate policymakers, and promote understanding 

about the disabling and life-threatening effects of eating disorders. We have worked 

closely with Congressman Jim Ramstad and Congressman Pat Kennedy and we are 

extremely grateful to them for their tireless efforts to pass mental health parity. We 

urge you to join them in support of this lifesaving legislation. Every day we wait 

another Anna dies unnecessarily of an eating disorder. We need a parity bill that 

includes eating disorders, substance abuse and other mental illnesses. This bill will 

improve the lives of people with mental illnesses throughout the country without 

preempting State laws that are already in place. 


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This is an exciting time; when I told my friends and colleagues that I was speaking to you today it gave them much needed HOPE. HOPE that the system can and 

will change, HOPE that their daughters and sons will finally have access to care 

and HOPE that their voices will be heard. In 2001, immediately following the Help 

Panel’s approval of Mental Health Parity I spoke to my dear friend, the late Senator 

Paul Wellstone, and he told me how excited he was that parity was moving forward 

because it would finally end discrimination against people with mental illness. More 

recently, Congressman Jim Ramstad said: ‘‘It’s time to finish what we started in 

1994 with our good friend and colleague, the late Senator Paul Wellstone, and end 

discrimination against people with addiction. This is a life-or-death issue for millions of Americans.’’ I agree with Congressman Ramstad; this is a life-or-death 

issue for millions of Americans. I urge you to pass the ‘‘Paul Wellstone Mental 

Health and Addiction Equity Act’’ this session. I guarantee, it WILL save lives. 

Thank you 

Appendix 

Why We Need Mental Health Parity Now: A Matter of Life or Death 

Millions of Americans suffer from eating disorders, known as anorexia nervosa, 

bulimia nervosa, binge eating disorder, and eating disorders not otherwise specified. 

Eating disorders are illnesses with a biological basis modified and influenced by 

emotional and cultural factors. The stigma associated with eating disorders has long 

kept individuals suffering in silence, inhibited funding for crucial research and created barriers to treatment. Without proper insurance coverage for treatment someone with a serious eating disorder is at risk for premature death. 

High prevalence rate. An estimated 8 million Americans suffer from eating disorders. Eating disorders cut across race, color, gender and socioeconomic categories. 

No one is immune. 

On the rise and affecting children. The incidence of eating disorders has doubled since the 1960s and is increasing in younger age groups, in children as young 

as seven. Chronic dieting is a primary risk factor and girls at five years old are already concerned about their weight and diet. Eating disorders are not simply a 

passing phase but serious mental illnesses that need proper treatment and attention. 

Impact on health. Eating disorders are commonly associated with substantial 

psychological problems, including depression, substance abuse, and all too frequently with suicide. They also can lead to major medical complications, including 

cardiac arrhythmia, cognitive impairment, osteoporosis, infertility, and most seriously, death. 

High death rate. Anorexia nervosa has the highest mortality rate of all psychiatric disorders. A young woman with anorexia is 12 times more likely to die than 

other women her age without anorexia. 

Treatment can work. Research shows that eating disorders can be successfully 

overcome with adequate and appropriate treatment. Such treatments are typically 

extensive and long-term. 

Health insurance companies contribute to high death rate. Insurance companies routinely limit the number of days they will reimburse, which force doctors 

to discharge patients with eating disorders too early. Although patients with eating 

disorders often require more than 6 weeks of inpatient therapy for proper recovery, 

insurance companies typically offer an average of 10–15 days a year. Patients are 

suffering relapses and are placed in life-threatening situations as a consequence of 

such managed care coverage limits. 

Congress can save lives by passing mental health parity this session. Time 

has run out. Our daughters, sisters, brothers, mothers, and friends are dying from 

eating disorder-related causes. Congress cannot afford to wait another day to pass 

legislation that provides people with eating disorders better access to care. 

REQUEST: Pass the Paul Wellstone Mental Health and Addiction Equity Act of 

2007. 


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Facts About Eating Disorders 

How Common Are Eating Disorders? 

Results from the first nationally representative study of eating disorders in the 

United States were published in the Biological Psychiatry, February 2007. The National Comorbidity Survey Replication (NCS–R) is a nationally representative survey of the U.S. population that was administered face-to-face to a sample of 9,282 

English-speaking adults ages 18 and older between February 2001 and December 

2003. 

A highlight of the results: 

• Lifetime prevalence of individual eating disorders is 0.6–4.5%. • Lifetime prevalence of anorexia nervosa is .9% in women, .3% in men. • Lifetime prevalence of bulimia nervosa is 1.5% in women, .5% in men. • Lifetime prevalence of binge eating disorder is 3.5% in women, 2.0% in men. • Eating disorders impair the sufferer’s home, work, personal, and social life. • Binge eating is more common than anorexia or bulimia and is commonly associated with severe obesity. • Eating disorders display substantial comorbidity with other mental health disorders. • While eating disorders often coexist with other mental health disorders, they 

often go undiagnosed and untreated. A low number of sufferers obtain treatment for the eating disorder. 

Other Facts About Eating Disorders 

• Doubled since 1960s. • Increasing in younger age groups, as young as 7 years. • Occurring increasingly in diverse ethnic and sociocultural groups. • 40–60% of high school girls diet. • 13% of high school girls purge. • 30–40% of junior high girls worry about weight. • 40% of 9-year-old girls have dieted. • 5-year-old girls are concerned about diet. 

Source: Journal of the American Academy of Child and Adolescent Psychiatry. 

Revolving Door 

Research shows that discharging patients prematurely (i.e., reached 90% of expected body weight) doubles the likelihood of relapse. According to data from the 

Renfrew Center, patients in this residential facility had an average length of stay 

of 50 days prior to the proliferation of managed care contracts. Today, the average 

length of stay has dropped to 15 days. A consequence to the shorter periods of treatment is that more people are relapsing. Prior to managed care, the return rate was 

under 10%. Today, it is 33%. This revolving door is a long-term cost on society. The 

person may end up on disability, unable to work, or otherwise able to contribute. 

Perpetuating the cycle of illness affects not only the patient and her family, but over 

time, the same insurance company—or companies—that restricted her treatment in 

the first place. 

Mortality 

Anorexia nervosa has the highest mortality rate of any psychiatric disorder, as 

high as 20%. Risk of death among individuals with anorexia is 12 times greater 

than their same age peers without anorexia. Death can occur after severe bingeing 

in bulimia nervosa as well. Health consequences such as osteoporosis (brittle bones), 

gastrointestinal complications and dental problems are significant health and financial burdens throughout life. 

Treatment Can Work 

With early detection and intervention. 

Treatment must be as complex as the illness including attention to the following: 

• Nutritional 

• Medical 

• Psychiatric 

• Psychotherapy with patient, family 

Rates of Recovery 

• 1⁄3 recover after initial episode 

• 1⁄3 fluctuate with recovery and relapse 

• 1⁄3 suffer chronic deterioration 


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If patients do not receive adequate treatment then multiple re-hospitalizations are common. 

Health Consequences of Eating Disorders 

Anorexia Nervosa Bulimia Nervosa 

• Heart Muscle Shrinkage • Electrolyte imbalance, heart • Slow and Irregular Heart Beats arrhythmia, heart failure • Heart Failure • Teeth erosion and cavities • Amenorrhea • Irritation and tears in the throat, • Kidney Stones and Kidney Failure esophagus and stomach • Lanugo (Development of Excessive • Laxative dependence 

Fine Body Hair on Face, Arms and • Emetic Toxicity 

Legs) • Death • Muscle Atrophy • Delayed Gastric Emptying, Bowel 

Irritation • Constipation • Osteoporosis 

f 

Chairman STARK. Thank you very much, Ms. Westin. I appreciate your efforts and your taking the time to share with us both 

your personal tragedy and your efforts to help us and help the entire community improve the situation so that we won’t have more 

Annas in the world. 

Doctor Shern, you described the Act of 96 as a first step. Was 

there an effort to evade the spirit of that law and do we still need 

some corrections in the 96 parity law that provide full coverage? 

Mr. SHERN. The 96 parity law was monumental in terms of its 

importance and the bravery that was represented by Senators 

Domenici, Wellstone and others, Alan Simpson and others, in getting that passed. 

However, it didn’t get us as far as we needed to go. As you may 

be aware, Mr. Chairman, the GAO took a look at it, systematically 

evaluated the impacts of the 96 legislation, and determined that it 

didn’t go far enough, and in fact, that other management techniques were used to essentially frustrate many of the most important intentions of that bill. 

That is why it is so important that we continue to push, and pass 

the parity bill in the House and its companion bill in the Senate. 

Chairman STARK. Thank you. 

Dr. Quirk, you are a staff model plan? 

Mr. QUIRK. Staff model and network, yes. 

Chairman STARK. Can you give me some sense—you provide 

both group plans and individual plans; is that correct? 

Mr. QUIRK. That is correct. 

Chairman STARK. Under Washington law they have to have 

parity in—— 

Mr. QUIRK. So, in 2005, parity was passed for the large-group 

commercial market, and as of last week there is parity passed in 

relationship to small group. 

Chairman STARK. Now, did you always have parity as a matter 

of practice in your plan, or did you change and have parity once 

the law was passed? 

Mr. QUIRK. Once the law was passed. 

Chairman STARK. Then you have seen, probably, the individual 

markets too soon to tell, but what could you tell us about any differences in costs to your plan after the 2005 law came in? 


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Mr. QUIRK. 2005 law is a staggered implementation, so 2006 

was equity in cost share; 2008 will be equity in stock loss; and 2010 

will be equity in relationship to days and visits. 

So, the cost changes with the cost share in 2006 were small. Essentially what it means is that you would pay the same cost share 

on the medical side as you would on the chemical dependency—or, 

excuse me, on the mental health side. So, of course, there is a little 

more cost involved in that, but not a great deal; and there has been 

a little uptick in the way of utilization to—in terms of people coming in. 

Chairman STARK. When you say you have a copayment for all 

of your visits, both acute care and mental illness? 

Mr. QUIRK. Yes. 

Chairman STARK. Is it small, or can you tell us the difference 

prior to the—— 

Mr. QUIRK. So, prior to the cost-share equity, the cost share was 

like $20. On the average it would go to $10 with equity. 

In relationship to inpatient it was 80 percent covered, and it 

went to like $300 payment per day. 

Chairman STARK. So now what do you anticipate your costs will 

do in the outyears as you complete the parity program? 

Mr. QUIRK. I believe it will be consistent with what we heard 

earlier today from Congressmen Ramstad and Kennedy, and that 

is consistent with what the actuarial folks have been telling us. 

That is for any of our plans that have historically had relatively 

good—although not parity benefits—and had a managed medical 

management practice in place, the transition to full parity will not 

be terribly expensive. It will probably be 1 percent or less. I am anticipating that for us as well. 

Chairman STARK. Thank you. Mr. Camp. 

Mr. CAMP. Thank you very much, Mr. Chairman. 

Dr. Quirk, just following up on Mr. Stark’s questioning, you referenced the medical management approach in your plan. Do you 

believe that coverage for mental health and substance abuse should 

be based on a treatment plan? If so, should health plans be given 

the flexibility to use medical management approaches to make sure 

the plan is established by the provider and followed by the patient? 

Mr. QUIRK. I believe so. I have been in Group Health for 23 

years. I have been the director for 18 years. 

I had the early experience of not having these management principles in place and essentially had access problems and had financial problems. So, with the medical management system in place 

these days, the majority of the patients get seen within 2 weeks’ 

period of time. We have standards in terms of availability both in 

network and in staff model. We do patient satisfaction studies and 

upward of 80 percent of the people who come and receive care from 

us are very satisfied. They would let us know otherwise if medical 

management principles were somehow contrary to their wishes. We 

have few complaints. 

When you look at quality of care indicators like the HEDIS posthospitalization followup measure, Group Health ranks within the 

top 10 percent of health plans that participate through NCQA in 

the country, some 250. 


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So, yes, I think that having an orderly, thoughtful process works 

in the patient’s interests, and we hear very little to the contrary 

from the patients. 

Mr. CAMP. Thank you. 

The House bill—I don’t know if you are familiar with the legislation before the Congress—requires the employer’s plan to cover the 

same range of mental illnesses as covered by the Federal Employee 

Benefit Plan, which uses what is known as the diagnostic and statistical mental disorders known as DSM–IV. The Senate bill, in 

contrast, does not have that same requirement. 

There are some conditions in that list as you look at it that really 

don’t seem biologically based or appropriate for medical treatment, 

frankly, such as sibling relational problems and nightmare disorder, jet lag, other lists. 

Do you have the definition in your plan of DSM–IV in Washington State and if so, could you comment on the impact mandatory coverage of some of those types of conditions might have on 

the health plan, the cost of insurance and the employer’s ability to 

continue that coverage? 

Mr. QUIRK. Sir, in my mind the DSM question is basically a 

practical one in regards to who needs care that can get care and 

is satisfied with what they received and who, if anyone, is going 

to be excluded in the process. 

So, at the level of the conditions that you spoke of, Mr. Camp, 

relative to life transition-type problems that aren’t psychiatric disorders, when we have people call us on the phone and ask us to 

receive care in regards to those conditions, what we ordinarily do 

is make social services available at their own expense in the community. Most people are happy with that. 

There is a small number that feel insistent that they have a psychiatric disorder. For those we bring them in and we do one session 

and we provide consultation to them. 

Now, there are certain conditions that are more severe and 

chronic that are in the DSM that typically do not include people 

coming and asking for services from us. 

Mental retardation is in the DSM, learning language disabilities 

is in the DSM, anti-social personality disorders is in the DSM, and 

by and large those people don’t have conditions that are treatable 

from a health care point of view. They do not come to us. 

So, the DSM issue to me is more a theoretical issue than it is 

an issue of major complication. Does that get to your question? 

Mr. CAMP. Well, it does, and it sounds as though some of the 

medical management techniques that you referred to in your testimony you use as prospective patients come to you, and that those 

help determine that. 

What is the standard for covered conditions in your plan? 

Mr. QUIRK. We provide services to people who have psychiatric 

disorders from the medical necessity point of view that are treatable, people who by and large have had destabilizing experiences 

in relationship to which either counseling or medicine can make a 

difference in terms of returning them to their previous level of 

function. 

Mr. CAMP. So, you allow the plan—at least your plan defines 

those disorders. The State has not defined those disorders for you, 


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which is in contrast to the legislation we are considering today 

where the Federal Government would define the various covered—— 

Mr. QUIRK. Yes. 

Mr. CAMP. Thank you very much. Thank you all for your testimony. I certainly appreciate it. 

Thank you, Mr. Chairman. I see my time has expired. 

Chairman STARK. Dr. McDermott. 

Mr. MCDERMOTT. Thank you, Mr. Chairman, for having this 

hearing and for giving me an opportunity to participate. 

I want to talk with Dr. Quirk a little bit further about the Group 

Health model, because I think it says something about why you 

need a universal system that manages people’s problems in the 

most efficient way. Group Health was started by the people, basically, and they basically still run it. 

Now, on mental health care, can someone refer themself to your 

unit without passing through a general practitioner? 

Mr. QUIRK. That is correct. 

Mr. MCDERMOTT. They can come directly to you? 

Mr. QUIRK. Absolutely. It is a self-referral system. It always has 

been. I trust it always will be. 

Mr. MCDERMOTT. Then what percentage of your referrals are 

self-referrals, people feel they have a mental health need, rather 

than those sent over by internists or by general practitioners in the 

rest of the system? How does it split out? 

Mr. QUIRK. We see about 7 percent of the enrolled population 

in a given year. Because we have this long history of being a selfreferral system and an integrated system with the medical group, 

often formal referrals do not occur. So, if there were inquiries of patients in regards to whether your doctor encouraged you to come, 

my guess—and it is simply that—would be that half of the folks 

just self-initiate and probably half are encouraged by their personal 

physicians coming for care. 

Mr. MCDERMOTT. One of the fears, always, of insurance companies and others in this whole area is, well, it would be a lot of 

people coming and wasting your time and wasting your ability. 

How many of those self-referrals do you find the system ultimately 

says there is nothing wrong with you, you can go away, or you 

should go away, or whatever? How often do you find people who 

are going in because they want to talk to somebody about things 

that perhaps could be handled in some other way? 

Mr. QUIRK. It is rare that that occurs. As I was explaining to 

Congressman Camp, when we have the initial contact through our 

entering group, which includes a cadre of mass prepared people 

who take the calls on the phone, there is a brief interview that occurs there. In the context of that discussion, if it appears to be a 

life transition problem rather than a psychiatric problem, we make 

the social services available in the community. If it appears to be 

ambiguous, we bring those folks in. By and large they are very 

happy with one visit, and life goes on. So, the myth that mental 

health is basically a place where people come in to develop friendships or get social support is simply that. That is not our experience. 


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Most people come in, they have real issues in their lives, real 

conditions. They want to remedy them as quickly as possible and 

get back into their lives. 

Mr. MCDERMOTT. You said—I think I caught 30,000 visits a 

year out of your 500,000 patients? 

Mr. QUIRK. We see 30,000 new patients each year in relationship to which there are 200,000 patient contacts. 

Mr. MCDERMOTT. How many actual inpatient beds do you have 

to maintain, or do you refer them out to another setting? 

Mr. QUIRK. We purchase all of the psychiatric inpatient services 

from the community. We do have an inpatient chemical dependency 

program that is in Bellevue. We also purchase those services from 

the community as well. 

Mr. MCDERMOTT. The purchasing is from the university hospital or from community hospitals or psychiatric facility? 

Mr. QUIRK. All of the above. 

Mr. MCDERMOTT. All of the above. 

Mr. QUIRK. Yes. 

Mr. MCDERMOTT. How many beds do you purchase a year? If 

you have a bed, do you have five beds filled continuously during 

the year or three beds? 

Mr. QUIRK. As you are well aware, Group Health is spread out 

geographically across a landscape that is not sort of consistent in 

terms of the volume of people. As a result, we buy services from 

everywhere, from Spokane to Bellingham to Riverton to Seattle, 

Bellevue, et cetera, and we have good contractual understandings 

with those local hospitals, so that in our regular back-and-forth 

with them through the hospital liaison nurses, we have regular and 

consistent availability of services. 

We have a concentration of services offered through the overlay 

facility in the Bellevue area, as you are well aware, part of our 

heaviest population area. But we don’t essentially purchase beds in 

terms of holding them over the course of time. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. 

Ms. WESTIN. Mr. Chairman, could I say something? 

Chairman STARK. Certainly. 

Ms. WESTIN. In followup with that, one of the issues of the 

availability of services and having that readily available, the importance of that is very often somebody coming in with a mental 

health disorder—certainly eating disorders—is that you have this 

little window of opportunity that that person’s defenses are down, 

their denial is down, and they are ready to go into the hospital or 

they are ready to get the help they need. If there is a delay in 

that—even by a few hours, certainly a couple of days, while insurance is taking a look at and authorizing that care—you can actually miss that window, and that person may then refuse to go in. 

That is exactly what happened with our daughter when they told 

us to take her home. I flatly refused because I knew if I missed 

that window that day, I probably would not get her back the next 

day. So, we have to have those beds available. We have to have 

that access to care. 

The other piece that I really would like to comment on, as we 

have been talking about, there is the cost of care and the cost of 

care up front to behavioral health and to, you know, the American 


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public, which has proven to be minimal from all the studies. The 

cost of not treating these illnesses is huge, and not only in lost 

lives, because we certainly understand that, but the long-term 

physical health effects of especially eating disorders, which include 

serious physical consequences, osteoporosis, infertility, electrolyte 

imbalance, cardiac, those kinds of things. 

So, if we look at the overall cost of care, we really see why it is 

so important to treat these illnesses very quickly, very aggressively, and as soon as we can do it, because overall the cost will 

be much, much less. Thank you. 

Chairman STARK. Thank you. 

Mr. Ramstad. 

Mr. RAMSTAD. Thank you, Mr. Chairman. 

Dr. Quirk, I just want to thank you for your support for the parity legislation before us. I omitted your health plan—I will never 

do it again—from the list of health plans I enumerated who are 

supporting this legislation. I am sorry. That is because I missed the 

Vancouver field hearing, one of the few that I missed. But thank 

you for being one of the enlightened health plans, willing to speak 

out in favor of fair and equitable coverage for medical care. 

I want to follow up on the line of questioning from Mr. Camp and 

point out that our bill does not prohibit medical management. It 

just says you have to do it, the management, the same way as for 

medical or surgical. 

I was wondering if you could just enumerate the requirements a 

patient would have to meet in order to be deemed as medically necessary to receive inpatient substance abuse treatment under an average Group Health policy. 

Mr. QUIRK. Sir, in the State of Washington we have a statutory 

requirement in regards to making certain amounts of moneys available every 2 years for chemical dependency services. 

We have a system within Group Health that is both a primary 

care and a behavioral health system. So, as much as possible—and 

we have a long ways to go, I believe—we attempt to pick up in regards to people’s chemical dependency patterns within the primary 

care approach. If indeed they are severe, referred for chemical dependency specialty, and to the extent that they result in significant 

impact in regards to overall health, their ability to function in life, 

we send them for inpatient detox. That is why we put together this 

chemical dependency inpatient program in our Bellevue campus. 

So, it is basically for people who have very severe conditions. 

Mr. RAMSTAD. I thank you again for being here today and for 

testifying at the field hearing and for your enlightened approach to 

this incredible public health problem, which I deem America’s number one epidemic, and appreciate enlightened plans like yours, as 

I said before. 

Kitty, I want to ask you a question. Again, you have been there. 

Thank you for being there since Day One when you worked with 

Senator Wellstone, before I was even involved. I want to thank you 

again for your work with the Anna Westin Foundation and the 

Eating Disorders Coalition. You have helped countless people suffering from the deadly disease of eating disorders. 

Let me ask you this. In treating as many people as you have, in 

your experience how would you compare the efficacy of treatment 


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for eating disorders with that of chronic conditions like asthma, hypertension or diabetes? The studies all show that the relapse rates 

are about equivalent. 

Is that corroborated by your own personal experience at the 

Anna Westin Foundation? 

Ms. WESTIN. Yes, that is correct. To answer your question, 

treatment does work. I think that is really important for people to 

understand and to know. The sooner somebody gets in for treatment and the more aggressive that treatment is, the more effective 

it will be. 

What we do know is that a person that comes in for treatment 

and leaves prematurely will have a much higher chance of relapse. 

The continually revolving door I was speaking about, where someone is admitted and then discharged, is not the right body weight, 

and then readmitted, it serves to only strengthen the illness, which 

I think is pretty typical of a lot of illnesses. 

When somebody is allowed to stay in the hospital a long enough 

time to restore themselves to ideal body weight, get their brain 

functioning again, be able to utilize the therapies and other approaches to care, they have a very, very good chance of total full 

recovery. 

So we really advocate for long-enough lengths of stay. Those percentage, those number of days, have dropped significantly in the 

last few years. I think originally, for a long time, the lengths of 

stay were a month or longer, and now they are down to just a matter of days. 

Or, in Anna’s case, that first time she was given 3 days in the 

hospital. 

Mr. RAMSTAD. The average treatment stay, I know, for people 

who are chemically dependent, now in plans it is 7 days. Ask any 

chemical dependency professional, ask any doctor or other professional, and they will tell you that no one can get on the road to 

recovery, nobody can receive effective treatment—right, Dr. 

Shern—in 7 days. That is what we are allowing to happen in this 

discrimination toward people with mental illness, eating disorders, 

and other forms of mental illness as well as chemical addiction. 

Thank you again to all three of you. Thank you, Mr. Chairman. 

Chairman STARK. I want to thank the panel for their assistance 

and their testimony. Appreciate your taking the time to do it. We 

will recess for about a minute while we excuse this panel and give 

the next panel a chance to join us. 

[Recess.] 

Chairman STARK. If our guests will take their seats, we will resume. Our third panel consists of three experts in the field of mental health substance abuse. Dr. Eric Goplerud—did I pronounce 

that correctly, Doctor—is the director of Ensuring Solutions to Alcohol Problems at George Washington University. Dr. 

Manderscheid, who is the director of Mental Health and Substance 

Use Programs at the Constella Group in Baltimore. Both of you 

two have been with SAMHSA previously, your experience there. 

Dr. Henry Harbin of Baltimore, Maryland. Dr. Harbin is in private 

practice; is that correct? More or less. 

Welcome to the Subcommittee, gentlemen, and as you know we 

try to divide our panel into two bills, or two areas, the first dealing 


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with the private insurance market, and with this panel we would 

like to look at the question of parity in the Medicare system. 

I would presume to some extent it might fall into the Medicaid 

system, but we just don’t have jurisdiction over that, which is why 

we don’t offer mention here. 

Would you like to proceed, Dr. Goplerud, in any manner you are 

comfortable to enlighten us. Remember to turn on your mike and 

get as close to it as you can. 

STATEMENT OF ERIC GOPLERUD, PH.D., DIRECTOR, ENSURING SOLUTIONS TO ALCOHOL PROBLEMS, GEORGE WASHINGTON UNIVERSITY 

Mr. GOPLERUD. Chairman Stark, Congressman Camp, distinguished Subcommittee Members, my name is Eric Goplerud and I 

am a professor of mental health and substance use policy at George 

Washington University Medical Center. 

Previously I served as associate administrator for policy and 

planning at the Substance Abuse Mental Health Services Administration. 

Thank you for the opportunity to participate in this important 

discussion of Medicare parity. The proposed Medicare Mental 

Health Modernization Act, H.R. 1663, would resolve crucial problems caused by the existing Medicare benefit, especially the much 

higher copayment requirements for outpatient treatment of mental 

and substance use conditions and the absence of coverage for costeffective residential and intensive outpatient treatments. 

In my remarks today I will highlight four points: 

Parity in Medicare is the right thing to do. 

Parity will fix discontinuity problems caused by the current benefit. 

Parity will lead to healthier seniors. 

The benefits of parity outweigh the slight increase in initial 

costs. 

In addition, I will address parity for treatment of alcohol and 

other drug-use disorders. 

In 1965 when Medicare was established, its benefit closely mirrored the typical commercial health insurance product at the time. 

Most mental health insurance restricted mental health benefits because diagnoses were viewed as subjective, treatments were questionable, and outcomes difficult to measure. 

Medicare followed conventional wisdom. The result, 42 years 

later, Medicare still requires 50 percent copayments for outpatient 

treatment of mental and substance use conditions, but only 20 percent for other illnesses. Medicare limits lifetime inpatient days for 

psychiatric hospitals, but has has no limits for other illnesses. An 

inequitable benefit may have been right more than 40 years ago, 

but advances in diagnosis and treatment of mental health illness 

and addiction and studies in cost and benefits of parity require us 

to reevaluate old assumptions. 

In 1999 I led a team in HHS that negotiated with the Office of 

Personnel Management for full and comprehensive parity for 9 million beneficiaries in the Federal Employees Health Benefits Plan 

program. We now have 6 years’ experience with FEHBP parity and 

a high-quality evaluation of the program. 


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Equitable coverage improves access without substantially increasing costs. 

Forty-two States now mandate coverage for treatment of mental 

and substance use conditions. Most are more equitable than the 

Medicare benefit. Dr. Shern’s organization, Mental Health America, 

released a poll in November 2006 that found 19 out of 20 Americans support coverage of parity, and this support is bipartisan. 

A 2004 poll found that 76 percent of probable voters are more 

likely to vote for candidates supporting parity for substance abuse 

treatment. 

In a moment, Dr. Manderscheid will discuss his research on how 

Medicare benefits contribute to the overutilization of emergency 

and inpatient services and create barriers to integrated care. 

I want to point to indicators as problems with continuity of care 

that Dr. Manderscheid will not address. Quality measures reported 

by the health plans to the National Committee for Quality Assurance, NCQA, showed this problem. People with mental illnesses 

and substance use disorders that are so severe that they require 

inpatient treatment need to be immediately linked to outpatient 

treatment when discharged. 

For commercially insured patients, 56 percent of seriously ill patients discharged from the hospital get into outpatient care within 

7 days. 

For Medicare patients, only 39 percent are seen within 7 days. 

Medicare financial barriers probably account for this almost 20 percent quality gap. 

From every authoritative source, a consistent message is heard 

supporting integrated care. In my written testimony, I listed 33 authoritative research-based clinical practice standards from professional medical societies in the United States, independent quality 

assurance organizations, and guidelines from the Veterans Administration and Department of Defense that direct clinicians to provide integrated health and behavioral health care for older Americans. The clinical practice guidelines for all of the big disabling 

conditions affecting seniors and disabled Medicare beneficiaries— 

heart disease, diabetes, cancer, cardiovascular disease, COPD, 

chronic pain, stroke, depression, Alzheimer’s—all call for clinicians 

to screen for depression, anxiety, and alcohol use and to actively 

manage these occurring conditions. 

The impact of parity is clear. Access improves, while service costs 

barely increase. 

In 2002 MedPac recommended eliminating the outpatient copayment disparities for Medicare and estimated that this would increase costs by $500 million a year. This increase of 2 cents for 

every $10 in premium is justified, according to MedPac, by improved access to treatment and simplify applied cost sharing. 

Before I conclude, I would like to briefly discuss the integration 

of alcohol and drug use treatment under parity. Alcohol use disorders are predominant substance abuse conditions affecting Americans no matter what age or income level. 

The chart in my written testimony shows that alcohol use disorders share all the characteristics of other chronic illnesses, except 

one. Health insurance coverage is not equitable. 


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G.W. recently analyzed the 11 State legislature-mandated studies of substance use parity. The studies reached a unanimous conclusion. The cost to employers is negligible. Substance use treatment parity increases costs annually by 0.2 percent per year. 

In conclusion, I would like to thank the Committee for the opportunity to address this important issue and look forward to answering questions. Thank you. 

[The prepared statement of Dr. Goplerud follows:] 

Prepared Statement of Eric Goplerud, Ph.D., Director, 

Ensuring Solutions to Alcohol Problems, George Washington University 

Chairman Stark, Congressman Camp, distinguished Subcommittee Members, I 

am Eric Goplerud, research professor in mental health and substance use policy in 

the Department of Health Policy at George Washington University Medical Center 

(GWU). I am pleased to be here this morning to discuss the research evidence supporting parity between the treatment of mental and substance use conditions treatment of other illnesses. 

For the last 5 years, I have directed a research program at GWU, Ensuring Solutions to Alcohol Problems, whose mission is to improve access to effective, affordable 

treatment for people with alcohol use disorders. We assist employers, government 

officials, health plans, and health care professionals to use effective, science-based 

strategies to change policies and practices that inhibit access to alcohol treatment. 

Previously, I served as associate administrator for Policy and Planning at the Substance Abuse and Mental Health Services Administration (SAMHSA), and directed 

quality improvement, finance and performance metrics programs at SAMHSA. 

Thank you for the opportunity to participate in this important discussion of Medicare parity. The proposed Medicare parity legislation would resolve crucial problems 

caused by the existing Medicare benefit design, especially the much higher copayment requirements for outpatient treatment of mental and substance use conditions. 

H.R. 1424, the subject of the first panel’s discussion this morning, would resolve 

critical problems in commercial insurance coverage of mental and addictive disorders. In particular, H.R. 1424 would extend coverage to all of the mental disorders 

defined by the professional standard, the American Psychiatric Associations Diagnostic and Statistical Manual (DSM); health plans will have to make their criteria 

for determining medical necessity available to beneficiaries and providers; it requires out-of-network options if necessary treatment is not available in network; and 

it does not preempt State laws that have stronger benefits. 

In my remarks today, I would like to highlight several key points: 

• Parity is the right thing to do. 

• Now is time to eliminate disparities in Medicare coverage. 

• Parity will fix problems in service use and provider payment. 

• Parity will lead to better healthier seniors. 

• The benefits of parity outweigh the slight increase in initial cost. 

In addition, I would like to address specific issues related to parity coverage for 

persons with alcohol and other drug use disorders. 

Parity is the Right Thing To Do 

In 1965, when Medicare was established, its benefit closely mirrored the typical 

commercial health insurance product at the time. In 1965, most health insurance 

offered very limited coverage for treatment of mental and substance use conditions. 

Most singled out mental health for more restricted benefits because of concerns that 

diagnosis was subjective and imprecise, treatments were of questionable effectiveness and outcomes difficult to measure. There was a concern (perhaps justifiable) 

that equitable coverage would lead to overuse and uncontrolled costs. Given this environment, Medicare followed conventional wisdom. 

The result: Medicare requires 50 percent copayments for outpatient treatment of 

mental and substance use conditions, but only 20 percent for outpatient treatment 

of other illnesses. Medicare limits lifetime inpatient days in psychiatric hospitals, 

but has no limits for inpatient treatment of other illnesses. 

Although an inequitable benefit design may have been the right decision more 

than 40 years ago, advances in the diagnosis and treatment of mental illness and 

addiction require us to reevaluate those old assumptions. The biochemical, genetic 

and neurological bases of many mental illnesses and addictions are far better understood now. Diagnosis is more precise and predictive. Psychological treatments are 


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more specific and effective. Medications and psychotherapy now help millions of people to live fulfilling lives in with families, jobs and friends. 

In 1999, I led the team in HHS that negotiated with the Office of Personnel Management for full and comprehensive parity for 9 million beneficiaries in the Federal 

Employees Health Benefit Program. We now have 6 years’ experience with FEHBP 

parity and a high-quality evaluation of the program demonstrates that equitable 

coverage of mental and substance use treatment improves access to care without 

significantly increasing costs. 

There are now 42 States that mandate mental health and substance abuse coverage requirements for group health insurance products. Most are substantially 

more equitable than the present Medicare benefit. Employers, State Medicaid programs, and Medicare through Medicare Advantage have used managed care techniques that have dramatically changed mental health and substance use treatment 

patterns, dropping hospital lengths of stays, increasing use of intensive outpatient 

and psychosocial rehabilitation services, and increasing access to outpatient treatment from mental health and substance use treatment specialists. The availability 

of powerful, safer, and more easily managed psychotropic medications (coupled with 

physician counseling) has rapidly expanded the role of primary care physicians and 

other health care professionals. These changes make re-examination of the unequal 

outpatient copayment in Medicare Part B, the limitations on psychiatric inpatient 

days in Part A, and the extension of coverage for intensive outpatient services the 

right thing to do. 

Now Is the Right Time To Eliminate Disparities in Coverage 

In creating the New Freedom Commission in 2002, President Bush stated: 

‘‘Our country must make a commitment: Americans with mental illness 

deserve our understanding, and they deserve our excellent care. They deserve 

a health care system that treats their illness with the same urgency as a 

physical illness. Health plans should not be allowed to apply unfair treatment limitations or financial requirements on mental health benefits. I’ll 

work with the Senator [Dominici]. I will work with the Speaker. I will work 

with their House and Senate colleagues to reach an agreement on mental 

health parity.’’ (April 29, 2002) 

Surgeon General Satcher, in his Report on Mental Health and Mental Illness, 

found: 

‘‘. . . formidable financial barriers block off needed mental health care 

from too many people regardless of whether one has health insurance with 

inadequate mental health benefits, or is one of the 44 million Americans who 

lack any insurance. We have allowed stigma and a now unwarranted sense 

of hopelessness about the opportunities for recovery from mental illness to 

erect these barriers. It is time to take them down.’’ (‘‘Mental Health: A Report of the Surgeon General,’’ 1999) 

Public opinion polls consistently show overwhelming support for health insurance 

to handle mental illnesses and addictions like other illnesses. A November 2006 poll 

conducted for Mental Health America found that most Americans support covering 

mental health treatment, support parity in coverage, and this support is bipartisan: 

• Nearly all Americans (96 percent) think health insurance should include coverage of mental health care. 

• 89 percent assert that insurance plans should cover mental health treatments 

at the same level as treatments for general health problems. 

• A large majority (74 percent) believe that insurance plans should cover substance abuse treatments at the same levels as treatments for general health 

issues. 

• Public demand for mental health equity is bipartisan: 83 percent of Republicans 

and 92 percent of Democrats want equitable health insurance. 

A Michigan poll conducted in 2000 found that 88 percent of Americans feel that 

a person’s health insurance should pay the cost of treatment for mental illness to 

the same extent that it pays for the cost of treating other illnesses. A 2004 poll by 

Peter Hart and Coldwater Associates found that 76 percent of likely voters are more 

likely to vote for a candidate favoring legislation requiring health insurance to handle addictions the same as other medical conditions. In California, 54 percent of voters in 2004 supported Proposition 63 to impose a tax to cover expanded treatment 

for mentally ill adults and children. 

In 2002, the Medicare Payment Advisory Committee (MedPAC) recommended 

that the outpatient mental health limitation be eliminated, finding that the modest 


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increase in program costs likely to result from parity ($500 million in 2002) is justified in light of the improvement in access to treatment and cost-sharing simplifications that would be the result. (MedPAC, 2002, p. 65). 

Parity Will Fix Problems in Service Use and Provider Payment 

Later, Dr. Manderscheid will discuss his research on how the 50 percent copayment for outpatient mental and substance use treatment disrupts good community 

care, contributing to over-utilization of emergency and inpatient services, hinders 

continuity of care when patients are discharged from the hospital, and creates barriers to integrated outpatient care by physicians and other health care providers 

who are managing the many co-occurring physical and mental illnesses of Medicare 

beneficiaries. I would like to point to two consequences that Dr. Manderscheid will 

not address: 

• Continuity of care is undermined by the current Medicare coverage 

disparity. Standard quality measures developed by the National Committee for 

Quality Assurance (NCQA) include measures of the proportion of patients with 

mental or substance use conditions discharged from a psychiatric hospital who 

start outpatient treatment within 7 and within 30 days. Medicare lags far behind private insurance. 

• For commercially insured patients, 56 percent get outpatient care within 7 

days and 76 percent within 30 days. For Medicare patients, only 39 percent 

are seen within 7 days and 57 percent within 30 days. Apparently, Medicare 

benefit restrictions create financial barriers for patients and health care professionals that account for this almost 20 percent quality gap. 

• In Medicare, only 2 patients out of 1,000 beneficiaries are identified as having 

a substance use problem—even though 3.2 percent of persons 65 years or 

older drink heavily, and 0.7 percent intentionally misuse prescription drugs. 

Of those identified, fewer than 1 in 20 receives a minimum of 3 services in 

the next 45 days. In commercial insurance, three times as many patients receive this level of care. 

• Distortions and inconsistencies in payment will be corrected with 

Medicare parity. The DHHS Office of the Inspector General (OIG) recently 

found that Medicare fiscal intermediaries have adopted inconsistent policies regarding the application of the outpatient limitation. In a study of 57 carriers, 

nine different policies for the application of the limitation were identified. In 

over one-half of the service areas, carriers incorrectly subjected evaluation and 

management services for patients with Alzheimer’s disease to the 50 percent 

copay. Other CMS and OIG studies have found widespread confusion among 

MH/SA treatment providers and carriers, protracted reimbursement adjudication processes and high rates of claims denials (up to 20 percent of medication 

management and 50 percent of group therapy claims are denied). 

Parity Will Lead to Healthier Seniors 

From almost every authoritative source, a consistent message can be seen supporting integrated care. For example, the fundamental finding in the Institute of 

Medicine’s report, ‘‘Improving Health Care for Mental and Substance Use Conditions’’ (2005) is that ‘‘Health care for general, mental, and substance use problems 

and illnesses must be delivered with an understanding of the inherent interactions 

between the mind/brain and the rest of the body.’’ The committee recommended ‘‘removal of barriers to and restrictions on effective and appropriate treatment that 

may be created by copayments, service exclusions, benefit limits, and other coverage 

policies’’ (IOM, 2005, p. 12). In three places the IOM report points to Medicare’s 50 

percent copayment for outpatient treatment as an example of financial barriers to 

effective care. 

Establishing Medicare parity is consistent with at least 29 authoritative, research-based clinical practice standards from professional medical societies, independent quality improvement organizations and the VA/DoD. These guidelines direct clinicians to provide integrated health and behavioral health care (especially for 

the chronic, disabling conditions that afflict older adults). Several of these guidelines 

are listed in the appendix. 

Clinical practice standards for heart disease, type II diabetes, chronic pain and 

stroke all direct clinicians to screen for depression, anxiety and alcohol use, and to 

actively manage these commonly co-occurring conditions. The Veterans Administration and Department of Defense have created a number of joint evidence-based clinical practice guidelines for common health and behavioral health conditions affecting elderly and disabled veterans. Their guidelines for depression, substance use 

disorder, post-traumatic stress disorder, and other mental illnesses recommend priVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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mary care screening and ongoing management, with referral to mental and substance use treatment specialists for severe or complicated problems. 

In 2005, Medicare initiated the ‘‘Welcome to Medicare’’ preventive physical and 

screening examination. The preventive assessment explicitly includes screening for 

depression, alcohol and drug use. The one-time Welcome examination is covered as 

a regular outpatient visit, subject to the 20 percent copayment. The inclusion of depression and alcohol screening is consistent with the recommendations of the U.S. 

Preventive Services Task Force (USPSTF). The USPSTF is an independent panel of 

experts in primary care and prevention that systematically reviews the evidence of 

effectiveness and develops recommendations for clinical preventive services. It recommends: 

• Screening adults for depression in clinical practices that have systems 

in place to assure accurate diagnosis, effective treatment, and followup. 

• Screening and behavioral counseling interventions to reduce alcohol 

misuse by adults, including pregnant women, in primary care settings. 

Without Medicare parity, primary care clinicians who follow CMS recommendations for the Welcome to Medicare preventive evaluation face the dilemma of finding 

patients with possible depression or alcohol problems who will not be able to afford 

the copay to get necessary treatment. 

The Benefits of Parity Will Outweigh the Slight Increase in Initial Cost 

Studies on the impact of parity have found that access improves while service 

costs barely increase. For example the evaluation of the Federal Employees Health 

Benefit Program parity found that costs increased by less than 1 percent (0.94 percent), at the same time that utilization increased by 15 percent. More people used 

mental health and substance use treatment services because parity makes treatment more affordable. At the same time, health plan costs barely increase as plans 

and patients have more flexibility in benefit usage, less expensive alternatives to 

inpatient care are emphasized, and early intervention and preventive care services 

are promoted. SAMHSA’s report on actual State experiences with parity found that 

‘‘State parity laws have had a small effect on premiums. Cost increases have been 

lowest in systems with tightly managed care and generous benefits. Most insurers 

in Maryland, Minnesota, New Hampshire, and Rhode Island reported small increases in total premium due to MH/SA parity laws.’’ 

Parity for Treatment of Alcohol and Other Substance Use Disorders 

Before I conclude, I would like to briefly discuss the integration of alcohol and 

drug use treatment under parity. 

Alcohol use disorders are the predominant substance use conditions affecting 

Americans—no matter what age or income level. This chart shows that alcohol use 

disorders share all of the characteristics of other chronic illnesses, except one— 

health insurance coverage is not equitable. 


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1http://www.ensuringsolutions.org/resources/resourceslshow.htm?doclid=339043. 2Legislative Analyst’s Office, California State Legislature. Unpublished. Review of Health Insurance Coverage of Substance Abuse Treatment, Pursuant to Chapter 305, Statutes of 2000 

(SB 1764, Chesbro). Sacramento, CA. 3Generally, small businesses of fewer than 25 or 50 employees are exempt from State parity 

mandates, as are companies that self-insure health benefits. 4Goplerud, Eric and Cimons, Marlene. 2002. Workplace Solutions: Treating Alcohol Problems 

through Employment-Based Health Insurance. Washington, DC: Ensuring Solutions to Alcohol 

Problems. http://www.ensuringsolutions.org/pages/rerere.html. 5Oregon Legislative Administration Committee Services. 2000. Joint Interim Task Force on 

Mental Health and Chemical Dependency Treatment: Final Report, Salem, OR. 6 North Carolina Legislative Research Commission. 2000. Mental Health and Chemical Dependency Parity: Report to the 2000 Session of the 1999 General Assembly of North Carolina. 

Raleigh, NC. Legislative Research Commission. 7 Bachman, R.E. 2002. An Actuarial Analysis of Comprehensive Mental Health and Substance 

Abuse Benefits for the State of New York. Atlanta, GA: PricewaterhouseCoopers L.L.P. 8 Connecticut, Delaware, Maine, Minnesota, Vermont, Virginia, and West Virginia. The remaining States either require some lesser level of coverage, or lack any requirements. See 

Goplerud, Eric and Cimons, Marlene. 2002. Workplace Solutions: Treating Alcohol Problems 

through Employment-Based Health Insurance. Washington, DC: Ensuring Solutions to Alcohol 

Problems. http://www.ensuringsolutions.org/pages/rerere.html. 9The studies were performed in Alaska, California, Delaware, Hawaii, Maine, New York, 

North Carolina, New Jersey, Ohio, Oregon and Vermont. 10 National Center on Addiction and Substance Abuse at Columbia University (CASA). 2001. 

Shoveling Up: The Impact of Substance Abuse on State Budgets. New York, NY. 

The Cost of Substance Use Parity 

An extensive George Washington University Medical Center analysis of 11 State 

studies on SA parity shows that the cost of parity to employers is negligible—raising 

annual premiums just 0.2 percent.1

‘‘The cost of parity is comparatively small when compared to overall health expenditures and when spread out over all enrolled members,’’ concluded California’s 

State Legislative Analyst’s Office after reviewing health insurance coverage of substance abuse treatment.2 Mandating parity would not place an undue burden on 

businesses 3 that offer health insurance to their employees.4 The analysis shows 

that: 

• Equitable coverage reduces pressure on States budgets (and the tax burden on 

citizens and employers). Oregon, for example, found the State saves $5.62 in 

tax-supported health, corrections and welfare costs for every State dollar spent 

on people who complete treatment.5

• Parity increases the number of people who receive treatment, thereby reducing 

their long-term cost to the State. In addition, more get treatment as outpatients 

and inpatients, while the length of (more expensive) hospital stays is sharply 

reduced. 

• The benefits of mandatory employment-based insurance parity are substantial. 

A North Carolina legislative report concludes: ‘‘Studies from several States have 

consistently shown that appropriate treatment of chemical dependency results 

in a significant reduction in medical claims, absenteeism, and disability; an increase in productivity; and a healthier and safer environment for all employees.’’ 6

• According to a PricewaterhouseCoopers actuarial analysis, the cost of parity to 

individual businesses goes down sharply when all or most businesses in a State 

are required to have equal coverage.7

In recent years, many States and the Federal Government have taken steps to 

require businesses that offer health insurance for their employees to cover alcohol 

and drug treatment on equal basis with coverage for treatment of other illnesses. 

Forty-two States require equitable coverage for some or all mental illnesses. Seven 

States also require equal coverage for treatment of alcohol-related problems.8 To aid 

their consideration of substance abuse parity legislation, 11 States conducted studies of the costs and impact of equitable coverage of treatment for alcohol and other 

drug problems.9

The parity reports recognize that States have a significant financial, social and 

political interest in preventing and treating the disease of alcoholism and other alcohol-related problems.10 Overall, the parity studies recommended including substance abuse in parity. ‘‘A State requirement is the only real option that will accomplish the objective of improved mental or nervous coverage at a reasonable premium 


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11 Bachman, R.E. 2001. An Actuarial Analysis of Full Parity for Mental Health and Substance 

Abuse Benefits in the State of New Jersey. Atlanta, GA: PricewaterhouseCoopers L.L.P. 12 Bachman, R.E. 2001. An Actuarial Analysis of Full Parity for Mental Health and Substance 

Abuse Benefits in the State of New Jersey. Atlanta, GA: PricewaterhouseCoopers L.L.P. 13 North Carolina Legislative Research Commission. 2000. Mental Health and Chemical Dependency Parity: Report to the 2000 Session of the 1999 General Assembly of North Carolina. 14Gerstein, D.R., Johnson, R.A., Harwood, H., Fountain, D., Suter, N., and Malloy, K. 1994. 

Evaluating Recovery Services: The California Drug and Alcohol Treatment Assessment 

(CALDATA). Sacramento, CA: State of California Department of Drug and Alcohol Problems. 15Ohio Department of Alcohol and Drug Addiction Services. 1996. Ohio Cost Effectiveness 

Study. Columbus, OH: Ohio Department of Alcohol and Drug Addiction Services. 16 Alaska: Alaska Mental Health Parity Task Force. 1999. Mental Health Parity Task Force 

Report: Final Report. Anchorage, AK. 

cost,’’ concluded Ronald E. Bachman, Principal, PricewaterhouseCoopers.11 The experts found it is more cost-efficient and is easy to include with mental health coverage, resulting in increased productivity, saving tax dollars, fewer hospitalizations, 

shorter inpatient stays and the use of less expensive outpatient services. 

‘‘Parity creates a level playing field for all insurers and provides adequate risksharing over a large population to minimize any premium increase due to the claims 

experience of any one group,’’ concluded the New Jersey task force.12

Ripple Effect 

Minnesota found that almost 80 percent of the costs of substance abuse treatment 

were offset in the first year following treatment due to decreased use of hospital, 

emergency room and detoxification services and reduced arrests.13 California found 

that criminal activity declined by 66 percent, drug and alcohol use declined by 40 

percent, and hospitalizations declined by 33 percent following treatments.14

The Ohio Department of Alcohol and Drug Addiction Services found that 1 year 

after participants completed treatment, ‘‘absenteeism was reduced by 61 percent, incomplete work by 37 percent, and mistakes in work by 36 percent,’’ according to Director Lucille Fleming.15

A Healthier Approach 

The report by the Alaska task force explicitly recognizes the connections between 

mental illnesses and addictions: ‘‘There is a high incidence of substance abuse 

among the mentally ill, and unless both disorders are treated, positive outcomes for 

either are unlikely. As the director of the Ohio Department of Alcohol and Drug Addiction Services observed, improving access to treatment effects change measured by 

‘‘real numbers, real people, [and] real benefits to the employer, to the employee, and 

to . . . taxpayers.’’ 16

Conclusion 

Before I conclude, I would like to thank the Committee for the opportunity to address this important issue. In considering Medicare parity, these points are key: 

• Parity is the right thing to do. 

• Now is time to eliminate disparities in Medicare coverage. 

• Parity will fix problems in service use and provider payment. 

• Parity will lead to better healthier seniors. 

• The benefits of parity outweigh the slight increase in initial cost. 

I wish to thank the Committee for this opportunity and look forward to answering 

any questions that you may have. 

f 

Chairman STARK. Thank you very much, Dr. Goplerud. 

Dr. Manderscheid, he didn’t give all your testimony; would you 

like to continue with what he left you? 

STATEMENT OF RONALD W. MANDERSCHEID, PH.D., DIRECTOR OF MENTAL HEALTH AND SUBSTANCE USE PROGRAMS, 

CONSTELLA GROUP LLC, BALTIMORE, MARYLAND 

Mr. MANDERSCHEID. Thank you very much, Mr. Chairman, 

Mr. Camp, other Members of the Committee. I am honored to be 

here to testify here today. 


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The reforms you are proposing are very badly needed. The current system of mental health benefits was designed for the world 

of 1965. 

Today, I would like to make three major points in support of proposed reforms: 

My first point is that reducing Medicare copayment for outpatient mental health services from 50 percent to 20 percent so 

that it is the same as for all other illnesses will increase appropriate outpatient service use, decrease costly inpatient service use, 

and encourage better use of physician services. In my written testimony I provide statistical evidence of this point. The current situation is such that Medicare recipients are less likely to use mental 

health services than our Medicaid recipients. They are more likely 

to use inpatient services to cost more per year. They are less likely 

to use outpatient services and they are also less likely to use physician services. I would be very glad to work with the Congressional 

Budget Office to document that the proposed change in the copay 

from 50 percent to 20 percent will not arrive at a tremendous increase in the cost to the Medicare program. 

My second point is that parity is needed both for mental health 

and substance use services, because elderly people are subject to all 

of these disorders. Again in my written testimony, I provide evidence of the high rate of depression, anxiety disorders, and alcohol 

use disorders in the elderly population. 

I won’t repeat those here. 

We should also note that these problems not only cause disability, they also co-occur with other chronic illnesses. For example, 

elderly Medicare recipients with diabetes are almost 1.6 times as 

likely as other Medicare recipients to have depression. Untreated 

depression in the elderly can also lead to suicide, which has been 

mentioned in previous testimony here today. 

What do these statistics mean? Achieving parity for both mental 

health and substance use care will lead to better treatment for 

mental health and alcohol problems and also help to contain the 

cost of treating other chronic diseases. 

By other chronic diseases, I cited this statistic on diabetes. We 

could also talk about chronic heart disease. We could also talk 

about chronic asthma. There are high correlates there with mental 

disorders. 

My third point is that collaborative care between mental health 

substance use and primary care, with oversight by qualified care 

managers, will be a very productive and cost-effective way to deliver mental health and substance use services. 

It is well known that public mental health clients die 25 years 

younger than other citizens primarily because they do not receive 

appropriate primary care services. Similarly, when one suffers a 

heart attack, lack of assessment and treatment for depression 

greatly increases the likelihood of death. Problems of depression 

are also frequently accompanied by inappropriate alcohol use or dependence. 

What do these findings mean? Together they point to the importance of coordinating good primary care with mental health and 

substance use care. This can best be done through collaborative 


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1 ‘‘Evolution of Mental Health Care under Medicare,’’ Congressional Staff Presentation, May 

2, 2003, electronic file provided. 

care carried out through a care manager. One’s very life may depend on whether this is done. 

I would like to thank the Chairman and Members of the Committee for the opportunity to testify today. I would also like to 

thank each of you on behalf of all people who are mentally ill or 

suffer from addictive disorders for taking on this very important 

issue. 

Thank you very much. 

[The prepared statement of Mr. Manderscheid follows:] 

Prepared Statement of Ronald W. Manderscheid, Ph.D., 

Director of Mental Health and Substance Use Programs, 

Constella Group LLC, Baltimore, Maryland 

Mr. Chairman and Members of the Subcommittee, I am Dr. Ron Manderscheid. 

Currently, I am the director of Mental Health and Substance Use Programs at 

Constella Group and adjunct professor in the Department of Mental Health at the 

Bloomberg School of Public Health, Johns Hopkins University. Previously, I was 

chief of Mental Health Statistics and Informatics at the National Institute of Mental 

Health and the Substance Abuse and Mental Health Services Administration in the 

U.S. Department of Health and Human Services, where I also edited the biennial 

publication, Mental Health, United States. 

For a period of 10 years while I was at SAMHSA, I also served as the Federal 

Project Officer for a large study on service use and expenditures for Medicare, Medicaid, and Private Insurance. To my knowledge, this project represents the only 

long-term research on Medicare mental health and substance use expenditures. Simultaneously, I served as a consultant on the evaluation of the mental health parity 

provisions of the Federal Employees Health Benefit Program. 

I would like to make three major points today, based on my previous research 

work. 

My first point is that reducing the Medicare copayment for outpatient mental 

health services from 50% to 20%—so that it is the same as for all other illnesses— 

will increase appropriate outpatient service use, decrease costly inpatient service 

use, and encourage better use of physician services. 

Available multiyear data 1 consistently show that the 50 percent Medicare copayment for outpatient mental health care has a specific set of negative consequences 

in terms of patterns of service use: 

1. The percent of all Medicare service recipients who use mental health and substance use services is smaller than for Medicaid. 

2. For Medicare mental health service recipients: 

• The percent that use inpatient services is generally larger than for Medicaid, 

and annual costs for these services are higher. This pattern is consistent 

across diagnosis, age, race/ethnicity, and gender groups. 

• The percent that use outpatient services is smaller than for Medicaid, and 

annual costs for these services are generally lower. 

• The percent that use physician services is larger than for Medicaid, but annual costs are lower. 

What do these patterns mean? Because of the 50% Medicare copayment for outpatient mental health services, fewer Medicare recipients receive mental health and 

substance use services; those who do are more likely to receive costly inpatient care; 

and they receive fewer needed physician services. 

My professional opinion is that the total cost to Medicare will increase only slightly as a result of the proposed change of the mental health outpatient copayment 

from 50% to 20%. This will be true because of the tradeoff between inpatient and 

outpatient care. Inpatient care will decrease; outpatient care will increase. Further, 

because many Medicare mental health service recipients are dual eligible for Medicaid, a change in Medicare is likely to have a salutary effect on Medicaid costs. I 

would be glad to work with the Congressional Budget Office to document these assertions. 

The current copayment structure was designed for the world of 1965. It 

incentivizes costly inpatient care. Today, more than 40 years later, we have draVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00056 Fmt 6633 Sfmt 6621 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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2Mental Health, United States, 2002, Chapter 13, accessible at: http://mentalhealth.samhsa. 

gov/publications/allpubs/SMA04-3938/Chapter13.asp. 3Mental Health, United States, 2004, Chapter 16, accessible at: http://mentalhealth.samhsa. 

gov/publications/allpubs/sma06-4195/Chapter16.asp. 4Lifetime and Annual Prevalence of DSM–IV/WMH–CIDI Disorders by Sex and Cohort, from 

the National Comorbidity Survey Replication, accessible at: http://www.hcp.med.harvard.edu/ 

ncs. 5 Results from the 2005 National Survey on Drug Use and Health: National Findings, accessible at: http://oas.samhsa.gov/nsduh/2k5nsduh/2k5Results.htm#TOC. 6Prevalence and Costs of Major Depression among Elderly Claimants with Diabetes, in Diabetes Care, electronic file provided. 7 Congruencies in Increased Mortality Rates, Years of Potential Life Lost, and Causes of Death 

Among Public Mental Health Clients in Eight States, in Preventing Chronic Disease, accessible 

at: http://www.cdc.gov/pcd/issues/2006/apr/05l0180.htm. 

matic new drug treatments and psychotherapy care that are documented to be effective. These can all be provided in outpatient settings. It is time to change the discriminatory Medicare mental health copayment. 

My second point is that parity is needed for both mental health and substance use 

services because elderly people are at risk for serious mental illnesses and alcohol 

problems. If left untreated, these problems exacerbate other chronic conditions that 

also are very common in the elderly population. Currently, only a small fraction of 

Medicare beneficiaries with alcohol and other substance use problems actually receive services under Medicare.2, 3 The rates of care are low for mental illness and 

substance use disorders among Medicare recipients compared to national prevalence 

figures for these disorders. 

The elderly population covered through Medicare needs outpatient mental health 

and substance use services. Elderly people are particularly vulnerable with respect 

to depression, anxiety, and alcohol use problems, each of which can be treated on 

an outpatient basis. 

The national data on diagnoses are quite informative: 4

DISORDER PERCENT OF POPULATION 

Major Depression: 2.9%—Last Year (For ages 60+) 

10.6%—Lifetime ′′ 

Anxiety Disorders: 8.8%—Last Year ′′ 

17.7%—Lifetime ′′ 

Alcohol Use 0.3%—Last Year ′′ 

(With and Without Dependence) 6.3%—Lifetime ′′ 

For alcohol use,5 we know also that about 40% of persons aged 65 and older used 

alcohol in the past month, more than 8% were binge drinkers, and 1.7% were heavy 

drinkers. 

These problems not only cause disability, they also co-occur with other chronic illnesses. 

For example, elderly Medicare recipients with diabetes are almost 1.6 times as 

likely as other Medicare recipients to have depression.6 Untreated depression in the 

elderly can also lead to suicide. Depression and anxiety are also frequently associated with the early phases of Alzheimer’s disease. 

What do all of these statistics mean? Achieving parity for both mental health and 

substance use care will lead to better treatment of mental health and alcohol problems and also help to contain the costs of treating other chronic diseases. 

Offering parity for both mental health and substance use services will also likely 

lead to lower overall costs for the program. By encouraging that these issues be addressed before they become crises, it is likely that recipients will cost the program 

less over their lifetimes. 

My third point is that collaborative care between mental health, substance use, 

and primary care, with oversight by qualified care managers, will be a very productive and cost-effective way to deliver mental health and substance use care services. 

It is well known that public mental health clients die 25 years younger than other 

citizens, primarily because they do not receive appropriate primary care.7 Similarly, 

when one suffers a heart attack, lack of assessment and treatment for depression 

greatly increases the likelihood of death. Problems of depression are frequently accompanied by inappropriate alcohol use or dependence. That is why the Institute 

of Medicine and the National Business Group on Health have both issued strong 

calls for closer coordination between mental health, substance use, and primary care 

services. 

What do these findings mean? Together, they point to the importance of coordinating good primary care with mental health and substance use care. This can best 


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be done through collaborative care, carried out through a care manager. One’s very 

life may well depend upon it. 

I would like to thank the Chairman and the Members of the Subcommittee for 

the opportunity to testify today on this very important issue. 

f 

Chairman STARK. Thank you. Dr. Harbin. 

STATEMENT OF HENRY T. HARBIN, M.D., BALTIMORE, 

MARYLAND 

Dr. HARBIN. Thank you very much, Chairman Stark and Ranking Member Camp and other Committee Members for holding this 

important hearing. I guess I had better explain my background a 

little bit. I am a psychiatrist for over 30 years. Most of my career, 

however, has been spent in health care administration; 10 years of 

that in the public mental health system in Maryland; 3 of those 

years as director of the State Mental Health Authority, where I 

had a lot of experience with some of the community-based programs that you are putting into this bill, as well as the financing 

of them by Medicaid and Medicare. 

Most of the last 16 years I have spent with two national private 

managed mental health care companies, Greenspring Health Services and Magellan Health Services. I was CEO of both of those 

companies at different points. Magellan, at the time that I was 

there, was the largest of the national managed behavioral companies, and at one point we were managing the mental health and 

substance abuse benefits for over 70 million Americans, and that 

included almost 40 percent of the Fortune 500 companies, as well 

as both Medicare and Medicaid recipients. 

I have also had the privilege to serve on President Bush’s new 

Freedom Commission on Mental Health, and more recently worked 

with the National Business Group on Health on an important document that they published at the end of 2005 on how large employers could do a better job of purchasing behavioral health care services. I am pleased to see that many of the items in this Medicare 

bill were all recommendations from the National Business Group 

as well. 

A couple of comments. You have heard a lot about the data on 

the cost of parity—or the lack of cost, I might say. I think that we 

have at least four major documents—the Surgeon General’s Report, 

New Freedom Commission’s Report, the Institute of Medicine Report that came out in 05, as well as the National Business Group, 

all of which support the changes in these financing issues that you 

are addressing in this bill. 

I would like to just add Magellan and Greenspring’s experience 

of managing parity benefits. We manage many accounts, large employers or groups of employers that shifted to parity in the midst 

of our managing their care. Our experience was actually even lower 

than what you have seen from some of the actuaries. We range 

from .2 to .8 percent increase of total medical premiums in those 

accounts. 

I would like to talk now a little bit about two areas that I would 

call unintended consequences of a limit of the specialty mental 


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health and substance abuse benefit, but are very important and 

haven’t been emphasized as much. 

The first of those is we are seeing an increased reliance on the 

general medical setting in primary care physicians’ offices and the 

sole use of psychiatric medications for the treatment of many common mental health and substance abuse problems. 

One of the reasons for this is the benefit constraints that make 

it difficult financially for patients and their families to go see a specialist, so they are incentivized basically to get their care in a primary care physician’s office. Now, many people will get good care 

there and primary care physicians are an important part of the behavioral health continuum. But most primary care physicians’ offices are not equipped to handle the full range of diagnostic and 

treatment services, and the most common intervention by many 

primary care doctors is only giving psychiatric medication. 

Many studies have shown that about 60 percent of all psychiatric 

medications are given by primary care doctors, not specialists, and 

a number of quality problems have been repeatedly documented. I 

will just read from one of those. The National Co-Morbidity Survey 

that was published in 05 showed that only 12.7 percent of mental 

health patients treated in a general medical setting received minimally adequate care compared to over 40 percent of the specialty 

mental health sector. Most studies have shown a combination of 

appropriate psycho-social and medications are needed to effectively 

treat these disorders. But when you block one aspect of that, namely the specialty treatment, you won’t get a full balance. 

The second point is that the blocking of access to effective behavioral health care continuum is going to make it difficult for our 

health care system to adequately address chronic medical physical 

problems, diabetes, and heart disease. We have discovered in the 

last decade or two that many of these patients, in a range of 30 

to 50 percent, have comorbid depression and other mental health 

problems. 

As many insurers—I will stop in a second—have tried to focus 

on this, it is clear that without effective access to depression treatment of the disorders, it will make it difficult to handle these 

chronic medical problems. 

My final comment, and I will answer this as I run out of time 

is to re-emphasize what Dr. Manderscheid said. There are programs called collaborative care, which effectively narrate the primary care system and the specialty behavioral system, and I would 

support adding elements of that if possible in this bill. Thank you. 

[The prepared statement of Dr. Harbin follows:] 

Prepared Statement of Henry T. Harbin, M.D., Baltimore, Maryland 

I would like to thank Chairman Stark and Ranking Member Camp for holding 

this hearing on the important issue of mental health and substance abuse parity 

for both private insurance as well as Medicare. 

As a psychiatrist for over 30 years, I have been an advocate for full parity for all 

mental health and substance use disorders for all payers both public and private. 

Most of my career has been in mental health care administration in both the public 

and private sector. I spent 10 years in the public health system in Maryland, three 

of those years as director of the State Mental Health Authority. 

I have also been chief executive officer of two national managed behavioral health 

care organizations: Greenspring Health Services and Magellan Health Services. 

Both of these companies held responsibility for managing the mental health and 


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substance abuse benefits for millions of Americans. These individuals were insured 

by commercial insurers, Medicaid, or Medicare. I was CEO of Magellan from 1998 

to 2001, and chairman for almost 2 more years. During that time Magellan was the 

largest of the managed behavioral health care companies and had approximately 70 

million members. Magellan managed the behavioral health benefits for approximately 40 percent of Fortune 500 companies. I had the privilege of serving on the 

President’s New Freedom Commission on Mental Health in 2002 and 2003, and 

more recently co-chaired a work group for the National Business Group on Health 

that produced a document in December 2005 entitled ‘‘An Employer’s Guide to Behavioral Health Services.’’ Currently, I am providing health consulting services. My 

comments about the Chairman’s Medicare Mental Health Modernization Act of 2007 

are based on these professional experiences. 

There have been at least four major publications over the last decade to summarize the progress that has occurred in the behavioral health field, as well as many 

of the remaining challenges. Key recommendations to address these challenges 

would advance the treatment success of individuals with mental health and substance use disorders. 

The publications include: 

1. The 1999 publication of the Surgeon General’s Report on Mental Health; 

2. The President’s New Freedom Commission Report on Mental Health in 2003; 

3. The Institute of Medicine’s report on Improving the Quality of Health Care for 

Mental and Substance Abuse Conditions from November 2005; and 

4. The December 2005 National Business Group on Health’s guide to behavioral 

health services mentioned above. 

All of these documents recognize the critical importance of adequate financing of 

behavioral health care services in implementing the recommendations outlined in 

all of these national reports. Removing or reducing the financial barriers that exist 

today in private insurance, Medicare, and Medicaid are minimum requirements for 

the successful achievement of effective, evidence-based behavioral health services 

and the improvement of the lives of our citizens who are suffering from these illnesses. The most significant barrier to equal access is of course the 50 percent coinsurance requirement for outpatient psychotherapy services under Medicare, whether 

delivered by a psychiatrist, psychologist or other behavioral health specialist. If a 

Medicare patient has an office visit with any other medical specialist such as a cardiologist, endocrinologist, or oncologist for a physical illness the coinsurance is 20 

percent. The Medicare Mental Health Modernization Act would end this longstanding discrimination against the mentally ill. 

Other witnesses can attest to the negligible increase in cost resulting from the implementation of parity in many insurance programs over the last two decades. Numerous studies have shown that the increased cost for full parity ranges from no 

increase in cost to an increase of around 0.9 percent in total medical premiums. At 

Magellan we managed a number of accounts that introduced parity benefits, and in 

our experience, the increase in cost was from a low of 0.2 percent to about 0.8 percent of the premium. Most of the increase was due to an expansion of outpatient 

services, paired with a decrease in out-of-pocket expenditures for the consumer and 

a corresponding increase in expenses by the payer. The concern that providing equal 

benefits for medical and behavioral health care would lead to runaway costs and increases in utilization has not materialized in study after study. All of these studies, 

however, were based on the ability to provide utilization management of the mental 

health benefit. 

There have been a number of unintended and deleterious consequences that have 

resulted from the arbitrary limitation of access to specialty behavioral services. I 

will focus on two of these consequences in my testimony, as I am sure other witnesses and panel members will discuss other important negative consequences. 

Increased Reliance on the General Medical Setting for Behavioral Care and 

Use of Psychiatric Mediations as the Sole Form of Mental Health Treatment 

Many patients want their mental health and substance abuse treatment to be 

given by primary care physicians and this type of utilization has increased significantly over the past decade. But due to benefit limitations and higher out-of-pocket 

expenses for mental health services, patients who both want and need access to specialty care often have little choice but to receive mental health treatment in primary 

care settings alone. Most primary care offices are not equipped to provide a full 

range of behavioral diagnostic and treatment services. The most common intervention by the primary care office for these disorders is the prescription of psychotropic 


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medications, and increasingly these drugs are being used as the sole form of treatment. 

The 2003 New Freedom Commission Report has described the general medical 

system as the ‘‘de-facto mental health system.’’ The Surgeon General’s Report of 

1999 documented that primary care physicians prescribe over 60 percent of psychotropic drugs. Some studies have shown that over 50 percent of patients with depression who receive any treatment are managed exclusively in primary care settings. 

This percentage is even higher among older adults covered under Medicare. Primary 

care physicians are an essential part of the health care system for behavioral disorders, but when this becomes the only option, we are depriving many patients of 

the most effective and medically appropriate treatment. Many primary care physicians have expressed the need for greater support and collaboration from behavioral 

health specialists, and enactment of the Medicare Mental Health Modernization Act 

would make this possible. 

Several studies have documented the delivery of suboptimal psychiatric care when 

located solely in primary care settings. The National Comorbidity Survey Replication Study (NCS–R) found that only 12.7 percent of mental health patients treated 

in the general medical setting received minimally adequate care compared to 43.8 

percent treated in the specialty mental health sector (Wang et al, Arch of General 

Psych, 2005). 

Most studies have shown that the majority of mental health and substance use 

disorders have better outcomes when appropriate drug treatments are combined 

with psychosocial interventions. Most, but not all, private payers and the Medicare 

program have benefit structures that make it less expensive for the consumer to access care in the general medical setting with psychotropic drug treatment than to 

get optimal access to specialty care where a more effective combination of psychosocial and pharmaceutical interventions can be delivered. Many health care leaders 

as well as legislators and citizens have expressed concerns that psychiatric drugs 

are being overused in some populations. Concerns have been raised about the frequent use of stimulant drugs such as Ritalin for children with Attention Deficit Disorders, antidepressant usage for depression in children and teenagers, and antipsychotics being used extensively in the elderly. As long as we continue to have a 

benefit design that restricts access to the most appropriate care, we should not be 

surprised by these trends. 

Limited Ability to Appropriately Address High-Risk, High-Cost Chronic Conditions Such as Diabetes and Congestive Heart Failure 

Lack of access to effective behavioral health care for common mental disorders 

such as depression also contributes to the inadequate intervention by health care 

professionals for high-risk and high-cost chronic medical (physical) conditions. Many 

studies have shown that a small percentage of patients with chronic medical conditions insured by Medicare, as well as other payers, account for a majority of the 

spending. We now know that a significant number of these patients also have behavioral disorders, particularly depression. The estimates range from as high as 30 

to 50 percent of patients with diabetes and heart conditions. The medical costs for 

patients presenting chronic medical conditions along with mental health conditions 

such as depression are often double those of patients without a comorbid behavioral 

condition (see New Freedom Commission Report and the National Business Group 

on Health Report listed above). 

Many physicians, managed care companies, disease management companies and 

payers, including Medicare, are exploring specialized interventions for this high-cost 

subgroup to address the chronic medical conditions and behavioral health concerns 

of these patients. Without effective treatment for depression and other common behavioral conditions presenting in 30 to 50 percent of these patients, however, the 

success of these intervention programs will be severely limited. 

Evidence-Based Practices and Collaborative Care 

In my final comments, I would like to focus on another key aspect of the Medicare 

Mental Health Modernization Act of 2007. The legislation recognizes the importance 

of evidence-based practices and requires the Medicare program not only to equalize 

benefits between medical and behavioral health care services, but also to cover a 

range of evidence-based practices for care. 

Just as health care payers have been slow to modernize their payments for behavioral health services, they likewise have not allowed for payment of clinical programs that have been scientifically proven to be more effective than the traditional 

inpatient programs and office-based outpatient programs. As I said at the beginning 

of my testimony, parity is a minimum requirement—but not a sufficient one—to 


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bring Medicare payment policies in line with 21st Century treatment for mental 

health and substance use disorders. 

There are several community-based treatment programs listed in the Medicare 

Mental Health Modernization Act that are both more effective and less expensive 

than the traditional inpatient care currently funded by Medicare. Oftentimes, these 

community-based programs do not require the addition of new services under Medicare, but only flexibility in payment so that these more efficient programs can be 

substituted for the more costly services. 

Unfortunately, the current draft of the Chairman’s bill fails to recognize one critical evidence-based practice that has already shown great effectiveness, especially 

for elderly depressed patients: collaborative care. While parity and the access to evidence-based specialty mental health treatments are essential to reducing the barriers to effective treatment for the millions of older adults with common mental disorders, many older adults will continue to visit primary care providers rather than 

mental health specialists for treatment of common mental disorders such as depression. ‘‘Collaborative care programs’’ facilitate effective collaboration between primary 

care physicians and mental health specialists, and over 35 studies spanning 20 

years of research in the United States and Europe have demonstrated that collaborative care programs are more effective than the care available if collaboration is 

restricted. Collaborative care has been shown to more than double the effectiveness 

of traditional care for depression, and at a lower cost than traditional care alone. 

In short, collaborative programs improve access to evidence-based mental health 

treatments and improve coordination of primary care and mental health care for patients with a combination of mental and chronic medical disorders. I will reference 

the National Business Group on Health’s Report to describe the collaborative care 

model: 

‘‘Collaborative Care: A Cost-Effective Primary Care Treatment Modality’’ 

Successful interventions to improve care for depression have a number of common 

features, commonly referred to as ‘‘collaborative care.’’ The collaborative care model 

focuses on treatment in general medical settings (vs. specialty behavioral health 

care settings) for most patients. Collaborative care includes and combines several 

quality improvement strategies, such as screening, case identification, and proactive 

tracking of clinical (e.g., depression) outcomes, clinical practice guidelines and provider training, support of primary care providers treating depression by a depression care manager (e.g., a nurse, clinical social worker, or other trained staff), and 

collaboration with a behavioral health specialist (e.g., a psychologist or a psychiatrist). 

While the details vary, collaborative care interventions have two key elements. 

The first is case management by a nurse, social worker, or other trained staff, to 

facilitate screening, coordinate an initial treatment plan and patient education, arrange followup care, monitor progress, and modify treatment if necessary. Case 

management can be provided in the clinic and/or by telephone. The second is consultation between the case manager, the primary care provider, and a consulting 

psychiatrist, in which the psychiatrist advises the primary care treatment team 

about their caseload of depressed patients. This consultation is intended to maximize the cost-effectiveness of collaborative care, by facilitating a process described 

as ‘‘stepped care,’’ where the treatment algorithm starts with relatively low-intensity 

interventions such as antidepressant medication prescribed by the primary care provider and telephone case management, with patients who fail to respond being shifted to progressively more intensive approaches including specialty behavioral health 

care. 

More than 10 large trials, in a wide range of settings, have demonstrated the feasibility of improving depression treatment and outcomes, relative to usual care. The 

documented benefits of collaborative depression care include: 

• Higher rates of evidence-based depression treatment (i.e., antidepressant medication and/or psychotherapy) 

• Better medication adherence/compliance 

• Reduction in depression symptoms, and earlier recovery from depression 

• Improved quality of life 

• Higher satisfaction with care 

• Improved physical functioning 

• Increased labor supply 

Collaborative care has typically been found to increase direct health care costs 

slightly, relative to usual care, mainly by increasing the use of evidence-based depression treatment. However, this investment yields substantial improvements in 

patients’ health status and functioning, so that collaborative care is more cost-effecVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00062 Fmt 6633 Sfmt 6621 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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tive than usual care for depression and has very favorable cost-effectiveness compared with other accepted medical interventions. For example, the largest trial of 

collaborative care for depression to date found that the program participants were 

depression-free for an additional 107 days over 2 years, relative to usual care, without adding significant increases to health care costs. 

Many of the elements of collaborative care would be adequately financed if the 

parity section of this bill is approved. However, to fully implement an evidencebased collaborative care program two additional services would need to be included 

for reimbursement, as the current Medicare payment structure would not allow for 

payment. These two elements are: (1) the care management/disease management 

function, and (2) the psychiatric consultation to care managers and primary care 

providers. Over 30 studies suggest that these elements are required to make collaborative care effective and to achieve maximum value from the mental health benefits 

covered under the parity section of this bill. I would hope that the Committee would 

consider adding these service categories. The addition of these categories would 

allow older adults to receive more effective treatment for common mental disorders 

in primary care settings, where many of them prefer to receive care, while also providing access to consultation from experienced mental health specialists and effective mental health specialty services if needed. 

This concludes my testimony, and I would like to thank the Subcommittee for inviting me to present these views and suggestions. I would welcome any questions 

from the Chairman or Members of the Subcommittee. 

f 

Chairman STARK. Thank you. I guess I am not sure I want to 

go here, but it is a looming question. There is an effort in the other 

body to have mental health parity, but approaching it somewhat 

differently. My colleague, Mr. Camp, brought it up in a reference 

to the DSM 4 and the issue—I suspect is that by the Federal Government mandating a broad range of coverage, I think it was referred to as jet lag and nicotine—or not nicotine, but caffeine dependency, things like that, which might be considered frivolous, 

and the worry I suppose is that if the Federal Government mandates this broad range of problems, there would be increased utilization that we would spend too much money on what might be considered frivolous problems that aren’t necessarily classified as mental health. 

Could each of you kind of, could you address that? What is the 

danger that we are going to just turn loose either in allowing providers such as therapists to provide some of the care and bill directly or creating too broad a range? What do we have to worry 

about in that case? Do you want to just start with Dr. Harbin and 

we will go down the line. 

Dr. HARBIN. I think it is a very important issue. I would like 

to say, first of all, I think both the Senate and the House private 

insurance parity bill will be a significant advancement over our 

current situation. I am aware of the differences. I would like to 

speak a little bit to the DSM 4 issue, and to your comments, Congressman Camp, to the earlier panel. You have to accept there are 

a list of disorders in the DSM 4, and they also have a list of ‘‘conditions which are typically called v codes.’’ Some of what you brought 

up were v codes. I don’t believe—I am not 100 percent sure about 

this that the Federal employee program covers v codes, even 

though I will add in general medicine, most insurers pay for v 

codes, for medical coverage, for things like hair loss, physicals 

where there isn’t a clear disorder, that is the common practice 

there. 


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But I don’t believe—but it would need to be double-checked if 

Federal employees covers v code. So, that has been a historic criticism when everything is thrown in in terms of all disorders. But 

there are some disorders, frankly, and you heard that from Dr. 

Quirk, frankly, that receive very little attention in any sort of managed benefit or are unlikely to run up the cost. 

So, I think it has been a worry historically. There are employers, 

and in States when they have passed their parity bills that have 

basically allowed any DSM 4 disorder, diagnosis in there, and we 

still see these very minor increases in costs. So, I think it is—I understand the flexibility that employers and some of their managed 

care company agents would desire in this. I think that is a very 

valid issue, but I don’t think from a cost and access point of view 

this would be a problem. 

Mr. MANDERSCHEID. I think that is an excellent question. 

There are several major issues here to be put on the table. One is, 

again, the issue of stigma that has been brought up by many of the 

witnesses today. I think the problem is exactly the reverse. The 

problem is getting people to care early enough rather than getting 

them to care too early about too frivolous a disorder. The incentives 

in Medicare currently drive people toward higher levels of care 

rather than toward ambulatory outpatient care. 

As a consequence, they would not get into that care if they did 

not have very serious disorders at the time they were receiving 

care. A second feature here is the whole issue of practice standards. 

I think a number of witnesses have raised that question as well. 

We have new practice standards in these fields. We have new evidence-based practices that we didn’t have in 1965. 

So, I think very little frivolous care is actually given in any part 

of the mental health system, including in the primary care system 

where a lot of mental health services are offered. I think the third 

feature of this is the fact that our world has changed. When Medicare was created, we needed 190-day lifetime limit because people 

went for 60-day inpatient stays. That world is long ago gone. We 

don’t need the 190-day lifetime limit anymore. We need to open the 

doors so people get the care earlier. We get more toward preventive 

and early interventions with people before they have very serious 

disorders and they end up as someone with a serious mental illness 

who is dying 25 years before they should. 

Chairman STARK. Dr. Goplerud? 

Mr. GOPLERUD. Thank you. I would like to talk a little about 

alcohol and drug abuse disorders, which often are being put on the 

side of being frivolous or self-imposed illnesses or disorders. In fact, 

only in the Medicare program, about one person in 20 who meets 

the DSM criteria of alcohol dependence or abuse disorder gets any 

treatment for their condition. The consequence is that we have 

way, way too few people who could benefit from the care. There has 

been reference made to the very large number of people who are 

coming in through the trauma care system of this country who are 

there because of alcohol or drug use which is impaired judgment 

or impaired reaction times while driving cars. Many of those people 

do not meet the DSM diagnosis of an alcohol or drug use disorder 

but prompt immediate counseling there in the emergency department can cut by 50 percent their likelihood of reinjury, rehosVerDate Nov 24 2008 09:38 May 12, 2011 Jkt 058272 PO 00000 Frm 00064 Fmt 6633 Sfmt 6602 I:\WAYS\WAYSPS\58272\58272.XXX APPS06 PsN: 58272

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pitalization and perhaps more importantly, their injuring somebody 

else or killing somebody else. So, what we really have as an issue 

is not enough people who are getting identified, as Dr. 

Manderscheid says, early enough for the conditions which are imminently treatable and for which there are evidence-based practice 

standards available. 

Chairman STARK. Thank you. I am going to thank the panel. 

Mr. Camp? 

Mr. CAMP. Thank you, Mr. Chairman. Dr. Harbin, I would like 

to just follow up on that. This would be a change in that at least 

we are talking about Medicare now. The plans that we have been 

talking about between the House and Senate typically have not— 

the House-Senate plan does not define each and every mental illness, but says only—it is a true parity bill. It says only if you cover 

a mental illness, you must cover them equally with physical illnesses and the House bill lists each plan. I don’t know the answer 

to the decodes, but we will try to get that, but it just seems to me 

that for the Federal Government to prescribe each and every—in 

specific detail each and every covered item, there is certainly more 

tradition for than that in Medicare, but I think there is a concern 

there. 

I wanted to talk about the collaborative care issue. I think Dr. 

Manderscheid talked about coordinated care, how we transition 

those folks who have come to a primary care physician to actually 

get the sort of specialty care they need, and how do you envision 

a coordinated care plan working? 

Dr. HARBIN. Thank you. As I ran out of time in that. It is in 

my written testimony in a little more detail. The collaborative care 

model now has almost 37 different randomly assigned control studies internationally supporting its efficacy. It really consists of four 

elements, improved screening by the primary care physician of 

mental health and substance abuse problems; secondly, that if the 

primary care physician initiates treatment for depression or another common mental health problem, the tracking by that patient 

of a case manager disease manager function, so that there is some 

outreach, there is some patient education, there is some encouragement of that person or his family to continue with treatment and 

to follow through if there is a referral to a specialist. 

Third, it consists of psychiatric consultation to the primary care 

physician’s office about the psychiatric medications and about the 

treatment plans. This is often a phone-based consultation. The 

fourth element is close linkage between the primary care office and 

the specialty behavioral system. So, those are the four elements. If 

this bill on Medicare would pass, it would fund adequately part of 

that. It would not fund the case management function or the psychiatrist consultation function, which I think is key to all of this 

research elements, all four elements that I listed. Part of this 

would allow many elderly Americans to stay and get their treatment within the primary care office, not have to move all the way 

over. 

Mr. CAMP. Are not some of those services covered under Medicare advantage plans? 

Dr. HARBIN. I am not sure whether they are or not. 


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Mr. CAMP. Does anyone in the panel know that? Do some of the 

Medicare advantage plans cover case management and other issues 

in your—if you don’t know, that is fine. It may be out of the 

scope—— 

Dr. HARBIN. I am not sure. They may do that. It may not be 

a required service but I would say this recommendation of collaborative care was part of the recommendations of the New Freedom 

Commission, it was also part of the recommendation of the National Business Group for fully managed plans in those blocks of 

business. So, it is often not implemented fully, even where they 

fully managed care structure. 

Mr. CAMP. Are not some of the services that we have talked 

about, such as case management treatment planning and others, 

covered under Medicaid? 

Mr. MANDERSCHEID. Yes. Some of those services are covered 

under Medicaid. A point that has not come out here today is the 

fact that there is overlap in the Medicaid and Medicare populations. Changes to Medicare can have a salutary effect on Medicaid costs, and that idea needs to be put on the table as well with 

the Congressional Budget Office. Let me say one—— 

Mr. CAMP. I just want to follow up on that. But salutary effect, 

my question is, by putting these benefits under Medicare, are we 

not creating an opportunity for States to shift their costs, their current spending under the Medicare program from Medicaid? 

Mr. MANDERSCHEID. I don’t believe so. You would need to 

structure the program so that that would not, in fact, happen. I 

wanted to say one additional word about collaborative care. A recent study done by the National Business Group on Health looking 

at the interface between mental health and primary care found 

that the use of a care manager could be very salutary in coordinating the two pieces of care we need to bring together, and we 

need to keep that idea on the table here as well. 

Mr. CAMP. All right. Thank you very much. I see my time has 

expired. Thank you, Mr. Chairman. 

Chairman STARK. Mrs. Tubbs Jones. 

Ms. TUBBS JONES. Mr. Chairman, I am going to yield any 

questions. I thank you all for your testimony, and it is clear that 

our entire Committee believes that this is an area that we need to 

focus in on, and having experts like you to testify and give us some 

guidance is really helpful. I thank you, Mr. Chairman. Yield back. 

Chairman STARK. Mr. Ramstad. 

Mr. RAMSTAD. Thank you, Mr. Chairman. I want to thank all 

three of you distinguished doctors for being here today and for the 

outstanding work you do in the field. You all contribute a great 

deal in the area of mental health and chemical addiction. I guess, 

Dr. Goplerud, I will start with you. I am most familiar with your 

outstanding work, expanding access to treatment for people with 

chemical addiction. I know that ensuring solutions to alcohol problems, the organization you head, is truly at the forefront of this debate nationally, and you are certainly—as the other two distinguished doctors are—you are a true expert in the field. 

I want to ask you two questions. First, I know you have studied 

the economic impacts of the issue of untreated addiction. I cited 

earlier the cost of $550 billion last year, estimated according to the 


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Brandeis study and the NAMI study, National Association For 

Mentally Ill, the costs of untreated mental illness and addiction. 

Could you elaborate on those costs and what form they take and 

so forth? I am sure you are familiar with those studies and that 

number. 

Mr. GOPLERUD. Sure. Perhaps one of the most remarkable numbers is that about $26 billion a year is spent for the treatment 

of alcohol-related health care problems. Of that $26 billion, only $1 

out of $5 goes for the actual payment of treatment for the alcohol 

problem itself. The other $4 out of $5 go for the payment for the 

injuries and illnesses that are associated with untreated alcohol 

problems. 

So, the costs simply of treating the health care consequences is at least $19 billion every year, a tiny fraction of which goes into 

actual health care. Now, many of us carry around these little 

items, BlackBerrys, blueberries, Trios, et cetera. If you go out to 

Research in Motion’s Web site, they will tell you that for every dollar you invest in this, you get about $2 back in increased productivity, not counting all the family distress that it happens. For the 

treatment of alcohol problems, the return on investment is about 

$2.60 or a better investment than an investment in one of these 

things. Thank you. 

Mr. RAMSTAD. The second question—and thank you for your response, Dr. Goplerud. The second question I had concerns the 

Medicare program and the focus of the second bill we are discussing here today, albeit a little bit obtusely. But has it been your 

experience, and actually those doctors who could comment as well 

whether early screenings and diagnoses of other illnesses result in 

a cost savings for the Federal Government? I would just cite the 

mammograms under Medicare, the PSAs required under Medicare. 

Do such early screenings and early diagnoses of other illnesses result in the cost savings for the Federal Government? Is there anything to substantiate that assertion? 

Mr. GOPLERUD. It is very clear that early identification is better than treatment for the catastrophic consequences. One of the 

peculiar things with the current Medicare benefit is that the required or strongly recommended in the welcome to Medicare preventive screen is screening for alcohol, drug and depression. However, if a physician identifies any of that, you would—the treatment would be subject to the 50 percent copay. In other words, it 

would be very difficult to actually pay for the care that you are 

identifying in the free service. 

Mr. MANDERSCHEID. I agree with Dr. Goplerud. The 50 percent copay is the major inhibitor to conducting such screening. 

There are excellent screening tools available at the present time. 

One of those for adults is the PHQ 9, which is recommended by the 

Centers for Disease Control. 

Mr. RAMSTAD. I should have asked the second half of my question, the first half merely being a preface to my main question, that 

is whether these savings could be applied to earlier screenings, earlier diagnosis of chemical addiction. 

Mr. MANDERSCHEID. I think we have a big hill to climb up to 

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tive interventions and screening, and we have to climb over that 

hill to get there. Once we get there, and we do these screenings 

much earlier, mammograms, colonoscopies, screening for depression, then I think you will begin to see cost savings as a result of 

that. I don’t think you would see cost savings in the initial few 

years because we have the hill to climb over here. Thank you. 

Dr. HARBIN. I would like to speak to one aspect of that, which 

is the need to screen earlier and more effectively for chronic medical problems. As I mentioned earlier, that group with diabetes, the 

20 percent or so recipients or people who have that disease are 

costing more than 60 percent of the dollars in every health insurance program, Medicare and so on. Thirty to 50 percent of that 

group has a comorbid depression, and that group appears to cost 

in study after study about double on the medical spending than the 

person who just has diabetes without depression. So, I think it is 

imperative to try to screen and treat the depression aspect in order 

to have the cost savings on the medical side. 

Mr. RAMSTAD. Well, thank you again to all three of you distinguished gentlemen for your testimony. Yield back, Mr. Chairman. 

Chairman STARK. Mr. Becerra? 

Mr. BECERRA. Thank you, Mr. Chairman. Doctors, thank you 

very much for your testimony today. I am not sure most people recognize that there is an issue of addiction or substance abuse among 

our Medicare population. Most of us would say Medicare beneficiaries, oh, substance abuse, do not go together. Can any of you 

tell us—either of you tell us what you know about the prevalence 

of substance use or abuse among the Medicare population? 

Mr. GOPLERUD. Yes. Although the problems associated with 

drinking or with drug use are much smaller for the Medicare population than they are for say 21-year-olds, there still is a substantial 

alcohol and drug problem among our elders. According to the National Survey on Drug Use in Health, a Federal survey, about 3.2 

percent of persons over 65 drink heavily, and 0.7 percent, just 

about 1 percent of seniors misuse prescription drugs. Now, you 

take them together, about 4 percent of seniors have a serious alcohol or drug use problem, yet in the Medicaid program, only two 

beneficiaries per thousand are identified and receive even one 

chemical dependency service a year. 

Mr. BECERRA. That is .2 percent. 

Mr. GOPLERUD. .2 percent, or in other words, about one in 20, 

who has a serious problem gets even one service for that problem, 

and I believe that that is directly attributable to the benefit problem. 

Mr. BECERRA. Actually, I find it healthy that our discussion 

here has focused almost exclusively on how we get to a parity level 

for mental health services. But I know that some folks are out 

there still have on their mind this issue of abuse of the system of 

the benefit if you get to the point of offering mental health services 

at the same level that you offer other health services, physical 

health services. I wonder if you can comment on the possibility of 

fraud or abuse that might lead to overutilization of certain services 

or abuse of use—or use of services in ways that are not meant to 

be provided, yes, Dr. Harbin. 


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Dr. HARBIN. I would like to respond to that. One of the reasons 

I shared my prior experience with these two national managed care 

health companies, that was our responsibility, we were at risk for 

the mental health and substance abuse spending for all of these 

many millions of Americans. So, it was a daily focus about whether 

people were abusing. I know their services. I know when I first 

started with Green Spring Health Services in particular, I sort of 

had the same view, even as a psychiatrist, there was going to be 

a lot of use of psychoanalysis, the classic stereotype of mental 

health, Woody Allen is going to spend 20 years on the couch five 

times a week. 

I was positively surprised to see it was very rarely used, some 

of those employers did have a psychoanalytic benefit and we actually set up a psychoanalytic review program for that. It was very 

rare that somebody used that, and we found that the outpatient 

services in particular echo what Dr. Manderscheid said. The problem is not getting people to use them enough and early enough. 

You have to have some level of management. It does not need to 

be too intrusive of the benefit, but it is just an old issue. There was 

a problem of overuse of inpatient services in the 1970s and 1980s 

when many of these commercial insurers were spending 70 and 80 

percent of all of their dollars on the inpatient level of care. That 

has changed. This is just not an issue at this point, and so—— 

Mr. BECERRA. Can you give us more specifics about what has 

changed or what we did to change that so that we could avoid that 

type of overutilization? 

Dr. HARBIN. Well, I think frankly the managed care intervention in the last 20 years both on commercial insurance and Medicaid and some degree Medicare has changed—helped change practice patterns. Also providers and science has pointed to the alternatives to inpatient care, are cost effective. I mentioned my experience in the public sector. The progress was light years ahead of the 

private system in Medicare, often because they created a whole 

range of alternative community-based services that were quite cost 

effective. 

So, it is a mixture of science, management interventions and recognitions by providers. I think it would be very difficult to go back 

to where we were 20 years ago where everybody got put in the hospital. That is appropriate for certain people for a period of time. 

But it was the first offer often for many people. 

Mr. BECERRA. Thank you very much for your testimony. We appreciate your comments. Mr. Chairman, I yield back. 

Chairman STARK. Mr. Ramstad, did you have a further inquiry? 

Mr. RAMSTAD. I don’t have any further questions, Mr. Chairman. But before we adjourn, I would just like to ask unanimous 

consent to speak out of order for 1 minute. 

Chairman STARK. Please. 

Mr. RAMSTAD. If you want, I don’t have any further questions 

for this panel. 

Chairman STARK. You are recognized. 

Mr. RAMSTAD. Oh, thank you, Mr. Chairman. Mr. Chairman, 

before we close this hearing and again, I want to thank you and 

Ranking Member Camp for holding this hearing today, I made a 

promise to a young man who attended, I think, 7 of our 12 field 


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hearings. We have been everywhere from California to New York 

and Texas to Minnesota and Rhode Island and everyplace in between. A young man who happens to be in a wheelchair, paraplegic 

named Steve Winter, if you read any of the field hearing testimony, 

read the testimony of Steve Winter. I think it pretty much sums 

up what we are all about in this legislation. Steve Winter is probably a young man about 35 now, and he started showing up at 

these field hearings, and Patrick and I befriended him and like I 

said, he came to a number of them at his own expense and was 

never on the witness list, but we always had him testify after hearing his compelling story. 

He testified about how when he was in high school—he is from 

Arizona, and he was going to high school and Steve Winter woke 

up one morning with a burning sensation in his back, and he went 

to the kitchen table as he did every morning to have breakfast with 

his sister and his mom and his dad, and he said to his mother, I 

am not feeling right today. Something is burning, and he reached 

back and he brought his hand forward, and it was full of blood. 

Just then his mother raised a pistol in his face and said, I am 

going to take you with me. Your sister is already in heaven. I am 

going to take you and you and I are going to join your sister in 

heaven. Well, he said, mom, put the gun down. Mom, put the gun 

down, and he was able to convince her to put the gun down. 

Unfortunately the bullet pierced his spinal cord and he is confined to that wheelchair for life. But he was asked at the hearing, 

do you have animosity toward your mother who is still alive today, 

and he said no because my mother didn’t shoot me while I was 

sleeping in bed. Her mental illness shot me. What had happened 

is she had been treated for psychosis and depression, and the coverage was stopped for 3 months and it was during those 3 months 

that the demons came back and her mental illness took over and 

caused that horrible tragedy, and that tragedy, like the tragedy of 

Anna Westin, shouldn’t happen in this land of ours, and there are 

things we can do to prevent those human tragedies. 

I believe this legislation that we have discussed here today at 

this hearing is one of those things we can do to prevent other people from suffering as Kitty Westin and her family has, Steve Winter and his family has. Thank you, Mr. Chairman. Yield back. 

Chairman STARK. Thank you for your remarks, and I want to 

thank the panel for their contributions. If there is no further inquiry, the hearing is adjourned. 

[Whereupon, at 12:28 p.m., the hearing was adjourned.] 

[Submissions for the Record follow:] 

Statement of American Academy of Child and Adolescent Psychiatry 

The American Academy of Child and Adolescent Psychiatry (AACAP) is a medical 

membership association established by child and adolescent psychiatrists in 1953. 

Now over 7,600 members strong, the AACAP is the leading national medical association dedicated to treating and improving the quality of life for the estimated 7– 

12 million American youth under 18 years of age who are affected by emotional, behavioral, developmental and mental disorders. AACAP’s members actively research, 

evaluate, diagnose, and treat psychiatric disorders and pride themselves on giving 

direction to and responding quickly to new developments in addressing the health 

care needs of children and their families. 

AACAP would like to thank House Ways and Means Health Subcommittee Chairman Pete Stark for holding this hearing. We appreciate his interest in mental 


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1 U.S. Department of Health and Human Services. Mental Health: A Report of the Surgeon 

General. Rockville, MD: U.S. Department of Health and Human Services, Substance Abuse and 

Mental Health Services Administration, Center for Mental Health Services, National Institutes 

of Health, National Institute of Mental Health, 1999. 2 Id. 

3 Blueprint for Change, National Center for Mental Health and Juvenile Justice, 2006. 

4Goldman HH, Frank RG, Burnam MA, et al. Behavioral Health Insurance Parity for Federal 

Employees. N Engl J Med 2006; 354:1378–86. 5 Arzin SA, Haiden HA, et al. Impact of Full Mental Health and Substance Abuse Parity for 

Children in the Federal Employees Health Benefits Program. Pediatrics. 2007; 119(2):452–459. 

health and substance abuse parity and its impact on our health care system. Thank 

you for the opportunity to submit a written statement for the record. 

Statement on Mental Health Parity 

While almost one in five children in the United States suffers from a diagnosable 

mental disorder, only 20 to 25 percent of these children receive treatment.1 This is 

a troubling fact considering treatment of many mental disorders has been deemed 

highly effective. According to the National Alliance on Mental Illness, between 70% 

and 90% of people with serious mental illnesses have a significant reduction of 

symptoms and improved quality of life with a combination of pharmacological and 

psychosocial treatment. 

However, our current health care system fails to provide the most basic mental 

health services to children in need. In the United States, 10% of children and adolescents suffer from serious emotional and mental disorders that cause significant 

functional impairment in their day-to-day lives at home, in school, and with peers.2

Furthermore, 70% of youth involved in State and local juvenile justice systems 

throughout the country suffer from mental disorders.3 Children, as a group, tend to 

be high service users of health care services and are often involved in multiple agencies. This poses a challenge to managed care systems because children require services at various levels of intensity for extended periods of time. Due to the risk-adjustment strategies to protect the financial interests of managed care organizations, 

there is little incentive to offer parity for services for children with the most serious 

disorders. As a result, these children are often left underserved and responsibilities 

for care are shifted to other systems such as special education, child welfare and 

juvenile justice systems. 

A New England Journal of Medicine study has shown that mental health and 

substance abuse treatment can be provided in health care plans at a negligible cost 

to employers.4 A more recent study submits that full mental health parity for children can be achieved without adversely affecting health care costs.5 The AACAP 

strongly supports Federal and State parity legislation that provides patients with 

access to the full range of appropriate evaluation and treatment services. The 

AACAP calls for the end of discriminatory insurance policies that limit access and 

help to perpetuate unnecessary stigma. Contractual limits on psychiatric outpatient 

visits and inpatient days, higher copayments/deductibles, and annual and lifetime 

benefit limits create financial burdens and barriers to treatment for patients and 

their families. Financial obstacles should be the last burden that parents face when 

attempting to get the proper treatment and care for their ailing children. 

Access to Care 

Lack of access to specialty mental health services, including child and adolescent 

psychiatrists, is a major problem when seeking mental health care in this country. 

As the President’s New Freedom Commission on Mental Health has stated, there 

is a shortage of psychiatrists and other mental health professionals trained to diagnose and treat children and adolescents nationwide. The shortage of these specialists, and all other health care professionals, is particularly severe in rural and 

urban areas. The AACAP calls for legislation that would provide incentives to individuals interested in education in the field of children’s mental health. The AACAP 

has been active in the promotion of comprehensive community-based systems of care 

across health, education, child welfare and juvenile justice systems for children and 

adolescents with mental illness. These programs should include consultation with 

mental health specialists through telemedicine or bi-monthly office visits, which are 

needed to ensure appropriate mental health care for children. 

Conclusion 

Mental health is integral to the health and well-being of all children. It is time 

this is realized. Children coping with emotional and mental disorders must be identified, diagnosed, and treated to avoid the loss of critical developmental years that 


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will never be recaptured. Mental health parity and improved access to care is a 

must for this Congress to enact. 

AACAP appreciates the opportunity to participate in this discussion. The AACAP 

applauds the Committee for its timely consideration of this important issue. Your 

continued leadership is pivotal to children and adolescents who suffer from the effects of mental illness. We strongly urge the Committee to support the passage of 

the Paul Wellstone Mental Health and Equitable Treatment Act of 2007. 

f 

Statement of American Association for Geriatric Psychiatry 

The American Association for Geriatric Psychiatry (AAGP) commends the Health 

Subcommittee of the House Committee on Ways and Means holding this hearing on 

parity for mental health benefits under both private-sector health benefit plans and 

the Medicare system. AAGP welcomes the opportunity to share its views on this important issue. 

AAGP is a professional membership organization dedicated to promoting 

the mental health and well-being of older Americans and improving the 

care of those with late-life mental disorders. AAGP’s membership consists 

of about 2,000 geriatric psychiatrists as well as other health professionals 

who focus on the mental health problems faced by senior citizens. 

The Medicare law of 1964 defined outpatient treatment of ‘‘mental, psychoneurotic, and personality disorders’’ as covered services for eligible recipients. While the initial language did not discriminate between psychiatric conditions and classic medical conditions, the implementation of 

subsequent language and policy resulted in these two classes of illness categories being managed in very different manners. The most important remaining difference is that Medicare requires a beneficiary copayment of 50 

percent of outpatient psychiatric services, as opposed to the 20 percent copayment required for medical outpatient services. This discriminatory policy is not supported by current scientific, medical, or social knowledge. As 

our understanding of behavior and brain function has so greatly expanded 

over the last 40 years, our Nation’s Medicare policy needs to be updated 

not only to rectify ongoing discrimination to this vulnerable population but 

also to recognize that untreated mental disorders complicate other medical 

conditions, leading to unnecessary additional suffering and costs. 

Background 

At the time of the initial passage of the Medicare statute, the inclusion of coverage for mental health care was seen as quite progressive since many private insurance plans had not yet provided any such coverage. The lack of private coverage 

then was a result of several factors. First, much of the care at the time was provided 

in publicly funded State mental hospitals or community clinics which did not bill 

insurance plans. Second, the dominant model of outpatient psychiatric treatment 

was psychoanalysis, which was very intensive and expensive and was not seen as 

‘‘medical treatment.’’ Third, the experience of those plans that did provide coverage 

(such as the Screen Actors Guild) was that utilization was high and so were the resulting expenditures. 

Partly as a result of the latter experience and in order to control costs, Medicare 

effectively required that beneficiaries pay a coinsurance of 50 percent for outpatient 

psychiatric services in contrast to the 20 percent coinsurance required for any other 

covered service. A number of enhancements have been made to the psychiatric benefit over the years, including lifting the original $250 cap on outpatient psychiatric 

services to reflect inflation and a realistic understanding of the needs of psychiatric 

patients. However, the copayment for outpatient psychiatric services has not 

changed, thus perpetuating discriminatory treatment of individuals with mental illness. 

Changes in Mental Health Treatment 

Much has changed in the area of mental health treatment since the original enactment of Medicare more than 40 years ago: 

• The explosion of knowledge about the biologic basis for most mental illness and 

the development of evidence-based treatments have become the dominant model 

of outpatient psychiatric treatment rather than psychoanalysis. 

• Most psychiatric treatment is provided in community-based office settings rather than in publicly funded inpatient facilities. 


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1Med Care. 2006 Jun; 44(6):506–12. ‘‘The impact of parity on major depression treatment 

quality in the Federal Employees’ Health Benefits Program after parity implementation.’’ Busch 

AB, Huskamp HA, Normand SL, Young AS, Goldman H, Frank RG. 2Med Care. 2006 Jun; 44(6):499–505. ‘‘The effects of State parity laws on the use of mental 

health care.’’ Harris KM, Carpenter C, Bao Y. 3Med Care. 2006 Jun; 44(6):497–8. ‘‘Mental health parity, access, and quality of care.’’ Druss 

BG. 4 N Engl J Med. 2006 Mar 30; 354(13):1378–86. Comment in: N Engl J Med. 2006 Mar 30; 

354(13):1415–7. ‘‘Behavioral health insurance parity for Federal employees.’’ Goldman HH, 

Frank RG, Burnam MA, Huskamp HA, Ridgely MS, Normand SL, Young AS, Barry CL, Azzone 

V, Busch AB, Azrin ST, Moran G, Lichtenstein C, Blasinsky M. 5Texas A&M University Health Sciences Center. Podium presentation. ‘‘One-and-a-HalfMinute Mental Health Care: Inside Primary Care Visits.’’ Ming Tai-Seale, PhD, MPH; Thomas 

McGuire, PhD; Christopher Colenda, MD, MPH; David Rosen, MD; Mary Ann Cook, PhD. 

• Most private insurance plans now cover outpatient psychiatric treatment, although in many instances there are still discriminatory practices relative to coverage of other medical conditions, a problem that is the focus of Federal legislative efforts for reform. 

• Many States now require parity in mental health coverage for plans governed 

by State insurance statutes. In 1996, the Congress enacted and the President 

signed the Mental Health Parity Act, which requires parity for annual and lifetime limits on coverage for mental illness. As a result of these parity statutes 

and regulations, there is now a considerable body of data which show that implementation of mental health parity results in minimal incremental costs. For 

example, in the Federal Employees Health Benefits Program, it is estimated 

that parity implementation resulted in a 1.64 percent premium increase for feefor-service plans and a 0.3 percent increase for health maintenance organizations. 

• There is increasing recognition that mental illnesses are just as real and treatable as many other medical conditions. 

Reimbursement Issues and the Effect on Patient Care 

Patient Access Barriers: The Medicare requirement that beneficiaries pay 50 percent of the charge for outpatient psychiatric services in contrast to the 20 percent 

copayment required for any other covered service is outdated and not consistent 

with modern medical-psychiatric treatment and Medicare’s intent with regard to 

medically necessary services. The effective 50 percent copayment exacts an increased out-of-pocket cost for beneficiaries who seek services that they expect will 

be covered like other health care services they receive. To the extent beneficiaries 

cannot afford this added cost, it keeps them from getting medically necessary services.1–4

It is important to note, as well, that studies have shown that untreated depression greatly increases the severity and costs associated with other medical conditions, such as heart disease and diabetes. Among older adults, comorbidities of this 

sort are the rule, not the exception, among those who suffer from depression. 

Provider Disincentives: Geriatric mental health services are inadequate in many 

areas. The psychiatric limitation contributes in a major way to this state of affairs. 

The reality that, in many instances, the 50 percent actually paid by Medicare will 

amount to payment-in-full imposes a financial burden on health care providers, a 

circumstance that, in turn, imposes a profound barrier to access to needed care. 

These barriers also affect delivery of mental health care in the primary care sector, where most mental health care is actually provided. The psychiatric limitation 

makes primary care physicians reluctant to spend the time needed to address mental health problems.5 When psychiatric problems are addressed, services are often 

coded diagnostically for established medical illnesses (e.g., diabetes) rather than the 

psychiatric problem, in order to avoid the psychiatric fee reduction. This coding 

skews Medicare claims data on the utilization of health care services for mental 

health problems. 

Addressing these problems will be crucial over the next 25 years, as the Baby 

Boomer population reaches Medicare eligibility. By the year 2010, there will be approximately 40 million people in the United States over the age of 65. Over 20 percent of those people will experience mental health problems. A national crisis in 

geriatric mental health care is emerging and has received recent attention in the 

medical literature. While many different types of mental and behavioral disorders 

can occur late in life, they are not an inevitable part of the aging process. However, 

these Medicare beneficiaries must have access to mental health professionals with 

expertise in geriatrics. 


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6 Annals of Family Medicine. 2006; 4:46–53. ‘‘Effects of Enhanced Depression Treatment on 

Diabetes Self-Care.’’ Elizabeth H.B. Lin, MD, MPH, et al. 7 JAMA. 1997 May 28; 277(20). ‘‘Depressive symptoms and the cost of health services in HMO 

patients aged 65 years and older. A 4-year prospective study.’’ Unutzer J. 

The chart below, derived from U.S. Census Bureau statistics, demonstrates the 

sharp increase expected in the older population, and especially those over age 85, 

whose health care needs are particularly difficult to meet absent geriatric training: 

Dual Eligibles: Another complication arises as a result of the use of State Medicaid funding to cover the copayment for financially disadvantaged Medicare recipients (dually eligible). Often the amount paid by Medicaid for these dually eligible 

recipients is minimal or disallowed altogether. This occurs because the allowed Medicaid rate is often near or below 50% of the Medicare allowed charge. This variation 

in allowed payment rate results in an effective decrease in revenues for those providing psychiatric care to the dually eligible Medicare/Medicaid population. As socioeconomic status and severity of psychiatric illness are highly correlated, those psychiatric specialists whose expertise is most needed for these more seriously ill patients experience a disproportionate amount of financial burden. 

Coding Problems: These problems are further exacerbated and complicated by regionally varying rules regarding how the copayment is applied. Depending on the 

State, this variation in copayment is applied either to mental health providers, specific ‘‘psychiatric’’ diagnosis, or the type of CPT code utilized. Some Medicare carriers apply the psychiatric limitation based on the ICD–9 diagnosis code utilized. 

In some illnesses, two differing ICD–9 codes exist, one for ‘‘medical’’ care and another for ‘‘psychiatric’’ care. For example, 310 is the ‘‘medical’’ code for depression 

while 296.XX is the ‘‘psychiatric’’ code for Major Depression. The ICD–9 code 331 

is defined as a neurologic code for dementia while 290.XX is the psychiatric code 

for senile or presenile dementia. Thus the particular code chosen can determine 

whether the psychiatric limitation applies for a particular Medicare carrier. Other 

carriers apply the psychiatric limitation strictly to mental health specialists even 

when the actual service delivered, CPT code chosen, and ICD–9 diagnosis is essentially identical to that used by a non-psychiatric physician and disregarding the fact 

that psychiatry itself is a medical specialty. Some carriers require that mental 

health professions use only psychiatric CPT codes. These practices are discriminatory to both mental health professionals as well as all those who are more seriously 

ill and require the additional expertise of the specialist. 

The Cost of Inadequate Care 

Major depression in late life is common, affecting 5–10% of patients in primary 

care. However, it is rarely the patient’s only health problem; it may co-exist with 

chronic pain (40–60%), cancer (10–20%), neurologic disorders (10–20%), diabetes 

(10–20%), heart disease (20–40%), and geriatric syndromes (20–40%). Medical illnesses with depression have been shown to have worse outcomes—greater symptom 

burden, disability, complications, mortality, and cost for all health services. It is a 

major barrier for effective chronic disease management; a recent diabetes study 

demonstrated that depression meant poorer adherence to medications, more obesity 

and smoking, less exercise and healthy eating, and higher blood sugar levels.6 Total 

health care costs are 50% higher for patients with depression, even after adjusting 

for comorbid medical illnesses.7, 8 And depression is deadly; older adults have the 

highest rate of suicide in the United States. 


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8 Arch Gen Psychiatry. 2003; 60:897–903. ‘‘Increased Medical Costs of a Population-Based 

Sample of Depressed Elderly Patients.’’ Katon WJ, et al. 9 Arch Intern Med. 2006; 166:2314–2321. ‘‘Collaborative Care for Depression: A Cumulative 

Meta-analysis and Review of Longer-term Outcomes.’’ Gilbody, et al. 

Depression can be treated with medications or psychotherapy, but only half of depressed older adults are ‘‘recognized’’ and even fewer are treated. Older men, African Americans, and Latinos have particularly low rates of depression treatment. 

Most older adults prefer treatment by their primary care physicians. However, in 

this setting, there is an increasing use of antidepressants but treatment is often not 

effective, due to early treatment dropout, staying on ineffective medications too long, 

and little access to psychosocial treatments. On the other hand, programs for collaborative care for depression in primary care settings have been shown to be more 

effective, consistently, than usual care, if the programs include active care management (not case management), support of medication management in primary care, 

and psychiatric consultation.9

Recommendation 

AAGP strongly supports this legislation to amend Medicare law to provide for the 

same support for treatment of mental illness as would be standard for any medical 

illness. Passage of parity would not only improve the quality of care and life for 

those suffering with mental illness but would end the existing practice that unfairly 

penalizes practitioners who choose to serve this population and discourages new 

practitioners from entering the field. 

f 

Statement of American Association for Marriage and Family Therapy 

Chairman Stark, Ranking Member Camp, and other Subcommittee Members, on 

behalf of our 24,000 members, the American Association for Marriage and Family 

Therapy (AAMFT) appreciates this opportunity to submit comments for the record 

of the Subcommittee’s hearing on mental health and substance abuse parity in 

Medicare and private health plans. AAMFT is the sole national organization representing the 50,000 licensed Marriage and Family Therapists (MFTs), and the profession of Marriage and Family Therapy is one of the five federally-defined ‘‘core 

mental health professions.’’ 

Health insurance is supposed to protect consumers from catastrophic financial expenses when they experience major illnesses. But under current Federal law, neither Medicare nor private health insurance plans are required to provide full parity 

in mental health or substance abuse benefits in comparison to coverage of physical 

illnesses. So current law exposes millions of Americans and their families to financial ruin when they incur a major mental health or substance abuse impairment, 

even though behavioral health treatment is effective and a relatively inexpensive 

share of total health care spending. And because of the paucity of third-party coverage, there are widespread shortages of mental health practitioners in lower-income areas, especially in rural and inner-city locales. 

As a result, each year, millions of Americans do not receive needed behavioral 

health treatment. This situation is simply unacceptable in a country that has the 

most wealth and the most advanced health care system in the world. That is why 

AAMFT strongly endorses the following legislation: 

• The Medicare Mental Health Modernization Act, H.R. 1663, by Reps. Stark, 

Ramstad and Kennedy, which would make a number of improvements to Medicare, including adding coverage of MFTs under Part B. 

• The Seniors Mental Health Access Improvement Act, H.R. 820, by Reps. Towns 

and Pickering, which also would add coverage of MFTs under Part B. 

• The Paul Wellstone Equitable Mental Health Treatment Act, H.R. 1424, by 

Reps. Kennedy, Ramstad and 257 other House Members, which would require 

private health plans to set all coverage conditions for behavioral health benefits 

in the same fashion as for physical illnesses. 

We would like to focus our comments on how these bills would improve access to 

MFTs and other behavioral health care providers. Among 1,253 rural U.S. counties 

with 2,500 to 20,000 people, nearly three-fourths lack a psychiatrist, 58 percent 

have no clinical social worker, and 50 percent lack a master’s or doctoral psychologist. The supply of all these professionals is far lower in the 769 rural ‘‘frontier’’ 

counties with fewer than 2,500 people. Further, the HHS Health Resources and 


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Services Administration indicates that 90% of psychiatric and mental health nurses 

with graduate degrees are in metropolitan areas. 

There are many counties where only a marriage and family therapist is present 

to serve the elderly population. A targeted study of licensed professionals in a sampling of States found many counties with no Medicare mental health providers, but 

with a marriage and family therapist, including Clayton, Iowa; Hamilton, Florida; 

Hutchinson, Texas; and Brunswick, Virginia, to name only a few. 

In addition, our profession is working diligently to increase the supply of MFTs 

in areas with concentrations of ethnic minorities. As two examples of this, MFTs 

are eligible for placement in underserved inner-city areas as part of the National 

Health Service Corps, and ethnic-minority MFT students are now eligible for scholarships under the HHS Substance Abuse and Mental Health Services Administration’s Minority Fellowship Program. 

MFTs are legally authorized through State licensing laws to treat mental illness. 

They are required to obtain a master’s degree in a mental health discipline and 2 

years post-graduate supervised clinical experience, much like existing Medicare-covered mental health providers such as clinical social workers. H.R. 1663 and H.R. 

820 would not change Medicare’s mental health benefit or modify the MFT scope 

of practice, but would merely allow Medicare beneficiaries who need medically necessary covered mental health services to obtain those services from a marriage and 

family therapist. In other words, these bills would increase the pool of qualified providers that Medicare beneficiaries can choose from without change to the services. 

In addition, to minimize costs, H.R. 1663 and H.R. 820 would set MFT Part B 

payment rates at 75% of the corresponding amounts allowed for psychiatrists and 

psychologists for the same services. This 75% level is the same as applied to clinical 

social workers, who—as with MFTs—also must have a minimum of a master’s degree in order to be Medicare-eligible. Staff of the Congressional Budget Office (CBO) 

estimate that the cost of covering MFTs under Part B would be approximately $9 

million annually. 

Legislation for Medicare MFT coverage has twice passed the U.S. Senate, as its 

original Medicare Modernization Act (S. 1) in 2003 and its original Deficit Reduction 

Act (S. 1932) in 2005. But this provision was dropped both times in conference with 

the House, despite the fact that in the previous Congress, 137 House Members cosponsored one or more bills that included Medicare MFT coverage. 

AAMFT believes the current limits on Medicare’s mental health benefit contribute 

to the elderly’s suicide rate being 50% greater than for the under-65 population. 

Thus, we also support the other provisions of H.R. 1663, such as reducing the current Part B beneficiary copayment for mental health services from 50% to 20% in 

order to achieve parity with the 20% copayment rate for other services. 

Likewise, we applaud the private health plan parity provisions of H.R. 1424. As 

shown by a federally-funded study of the Federal Employees Health Benefit Program, parity would increase health plan costs for under-65 enrollees only about 1%, 

a small price to obtain financial protection for millions of Americans. 

In addition, although CBO rules prohibit ‘‘dynamic’’ cost estimates that account 

for indirect savings from new legislation, there is extensive scientific research showing that mental health treatment has a substantial ‘‘offset’’ savings effect by reducing future costs for physical illnesses. In addition, parity will reduce employers’ 

costs for sick leave and disability pay, and will improve the quality of life for millions of Americans. Thus, we believe behavioral health parity in both Medicare and 

private health plans would be cost-effective. 

In summary, we applaud the Subcommittee for holding this important hearing, 

and thank Chairman Stark for his leadership on these issues. As shown by the bipartisan support for H.R. 820, H.R. 1588 and H.R. 1663, equity in behavioral health 

insurance coverage is not a partisan issue. We urge the Subcommittee to favorably 

report these bills at the earliest possible time and look forward to working with 

Subcommittee Members as you address this urgent issue. Thank you for your consideration. 

Required Supplemental Sheet—Hearing on Mental Health and Substance Abuse 

Parity 3/27/07 

Submitting Organization: American Association for Marriage and Family Therapy 

Address: 112 S. Alfred St., Alexandria, VA 22314 

Contact: Brian Rasmussen, Government Affairs Manager, (703) 253–0463; 

brasmussen@aamft.org 

Fax: (703) 253–0506 

f 


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Statement of Amy Kuehn, Indianapolis, Indiana 

My name is Amy Kuehn and I live in Indianapolis, Indiana. I have two sons. 

Nicholas is 11 years old and Matthew is 8 years old. Nicholas has been diagnosed 

as being on the autism spectrum with Asperger’s and also has ADHD. My children 

have Medicaid for insurance. The Governor of Indiana, Mitch Daniels, declared earlier this year that mental illnesses on the autism spectrum would no longer be covered by the Medicaid insurance. This leaves my family, along with countless others, 

floundering in the mental health system. Riley Children’s Hospital, which has an 

entire department devoted to diagnosing and treating Autism Spectrum Disorders 

(ASD) can no longer accept children and adolescents who have Medicaid, who only 

qualify for this insurance because of low income, unless the parents pay the $150 

appointment fee out-of-pocket. Obviously, most of us are unable to afford to do this 

while we are desperately trying to seek treatment for our children so that they can 

function to their fullest potential in society. This decision is a huge obstacle for even 

mediocre parents. 

For our own family, Nicholas is in bi-weekly therapy, which is only being covered 

because his treatment team is listing ADHD as his primary diagnosis. The truth 

of the matter is that the ADHD is just an offshoot of his Asperger’s. Nick lacks social skills, has great difficulty with school, has no friends, completely failed the 

standardized tests that will be used to determine if he graduates, and as things are 

going now, will be unable to live independently or even semi-independently upon entering adulthood. Although he is 11 years old, he is emotionally younger than my 

8 year old. I sent him to a social skills day camp last summer that was on a sliding 

scale. Even with that scale, it was far too expensive since Medicaid would not pay 

at all. The only way that he was able to attend was that my parents paid for it. 

This is not their job. We pay the Medicaid insurance premiums but the services that 

we are offered are severely limited and do not meet the needs of my son. Insurance 

is not helping my son to grow to his potential and I have no recourse because the 

laws, as they stand, do not allow for it. 

The rates of prevalence and incidence of autism just last year were 1 out of 166. 

Now it is 1 out of 150. With the increased prevalence and incidence, it would make 

sense that there would be a push for increased services, but the opposite is happening. Because my son needs so much one-on-one assistance for nearly everything 

that he does and because he has so many appointments, I am unable to work outside the home. This puts our family into even worse financial straits. Without adequate services and treatment, Nick will be a consumer of disability services throughout his adult life and will most likely be a recipient of SSI. As things stand, he will 

not be a productive member of society, despite his desires to do so. 

I do not have any understanding how Governor Daniels was able to single out autism and stop Medicaid coverage for it. He referred to it as a mental health issue, 

but in truth, autism is a neurological disorder. This certainly seems counter-intuitive for a governor who places much of his reputation on being financially responsible since the obvious result from parental loss of productivity will increase leading 

to a greater need for public assistance for families for now. Also, as our children 

grow older, they will also need increasing amounts of social assistance for assistedliving and other disability services. 

Passing mental health insurance parity which would include Medicaid and ASDs 

would help many of us to improve the quality of the lives of our children and lessen 

their future need for public assistance and disability benefits. 

Thank you very much for taking the time to review my testimony on such an important topic. I have submitted my testimony about my own, very costly mental illness through ANAD (National Association of Anorexia Nervosa and Associated Disorders) and my insurance’s failures to help me which ended up costing my family 

so much that we had to file for bankruptcy in the amount of $200,000 in medical 

bills. That was in 2001 and again, my bills are piling up because of the physical 

consequences of my 20+ year battle with anorexia and bulimia. This all seems 

never-ending even though I’m in solid recovery and committed to remaining this 

way. I really look forward to a positive outcome with this campaign and applaud 

the Honorable Patrick Kennedy and Honorable Jim Ramstad for taking the lead 

with this campaign. 

f 


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Therapeutic Communities of America 

March 27, 2007 

The Honorable Fortney ‘‘Pete’’ Stark, Chairman 

U.S. House of Representatives 

Committee on Ways and Means 

Subcommittee on Health 

Room 1102 LHOB 

Washington, DC 20515 

The Honorable Dave Camp, Minority Ranking Member 

U.S. House of Representatives 

Committee on Ways and Means 

Subcommittee on Health 

Room 11139 LHOB 

Washington, DC 20515 

Dear Chairman Stark and Representative Camp: 

As you know, only 18.2% of all Americans over the age of 12 needing treatment 

actually receive it. This is a startling statistic and shows the need for public policy 

and community efforts to end discrimination and provide access to quality care earlier for individuals with substance use and mental health disorders. Equity legislation can assist with closing this treatment gap. 

Thank you for holding the hearing on March 27, 2007 on mental health and substance abuse parity. Therapeutic Communities of America (TCA) provides the following comments for your consideration. The introduction of the bill last week, to 

require parity in mental health services for Medicare beneficiaries and eliminate a 

190-day limit on inpatient treatment and lowering the copay requirements will improve access for seniors to receive needed services that are client-based and will 

allow for better outcomes. It confirms the necessity to establish in publicly-funded 

programs equity for access and effectiveness. 

TCA member programs are mostly publicly funded through an array of public programs that weave and leverage public funding to provide client-based holistic addiction and mental health services to low income Americans. TCA member programs 

treat low income Americans from pregnant women to seniors in need of mental 

health and addiction services. TCA appreciates the importance of equity for mental 

health coverage for Medicare recipients and is respectful of the efforts of your Committee. 

Therapeutic communities receive limited third party private payer reimbursement 

and although not directly impacted by health plan parity bills our members through 

their experience know the importance to develop consistent bills that would not 

place additional limitations or consequence on public services by permitting reimbursement to be based on costs and not be based on patient-based clinical criteria 

and quality indicators. TCA has attached a list of safeguards that should be considered as any legislation is advanced for private health plan parity bills. Those concerns include preemption, medical necessity criteria, managed care, disclosure, and 

equity. The Paul Wellstone Mental Health and Addiction Equity Act of 2007 recently 

introduced addresses those concerns and we hope that the bill is not amended to 

weaken any of its current safeguards, and as such, those provisions in the bill remain through final passage. Your hearing demonstrates the Committee’s understanding for policy that advances appropriate care to all our citizens. 

We respectfully request that as you work toward equity for mental health and 

substance abuse treatment and prevention services that you consider the principles 

of the National Institute on Drug Abuse (NIDA) for drug treatment effectiveness. 

NIDA research shows the importance of length of stay in treatment and other principles that should be protected to assure equity with other chronic illnesses. Some 

of those principles include: 

• No single treatment is appropriate for all individuals. 

• Effective treatment attends to multiple needs of the individual, not just his or 

her drug use. 

• Remaining in treatment for an adequate period of time is critical for treatment 

effectiveness. 

• Recovery from substance abuse can be a long process and frequently requires 

multiple episodes of treatment. 

• Treatment of addiction is as successful as treatment of other chronic diseases 

such as diabetes, hypertension and asthma. 


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1 Based in part on Principles of Drug Addiction Treatment—A Research-Based Guide, National 

Institute on Drug Abuse, National Institutes of Health, and NIH Publication No. 004180. 

• Substance abuse treatment programs should be constructed on evidence-based 

methodologies that are outcome based and meet performance measures.1

Depending on the stability and support an individual with a substance use disorder has within their environment; and the progressive stage of their disease, a patient will need criteria that understands the type, kind, duration, and multiple 

treatment needed by that person for recovery. It is important that a skilled service 

provider with specific training in addiction should do assessment, referral, placement, clinical determinations, and treatment of an individual with substance use 

disorders. Substance abuse treatment is a process that moves from motivation and 

stabilization to recovery as it is with other chronic diseases. 

TCA appreciates your commitment and your leadership on this important issue. 

Please contact us if we can provide additional information at (202) 296–3503. 

Sincerely, 

Linda Hay Crawford 

Executive Director 

Therapeutic Communities of America (TCA), founded in 1975, represents over 600 

programs across the country dedicated to serving those with addiction and mental 

health disorders. Therapeutic Communities provide a comprehensive continuum of 

care to patients, many of whom have multiple barriers to recovery, such as co-occurring mental illness, the homeless, adolescents, pregnant women, and HIV/AIDS. 

Therapeutic Communities also strive to help individuals secure family unification 

and successful welfare-to-work outcomes. 

The Therapeutic Community methodology of treatment was established in the late 

1950’s, addressing the entirety of social, psychological, cognitive, and behavioral factors in combating alcohol and drug abuse. Traditionally, Therapeutic Communities 

have been community-based long-term residential substance abuse treatment programs. 

In recent years, TCA members have expanded their range of services, providing 

outpatient, prevention, education, family therapy, transitional housing, vocational 

training, medical services, and case management in addition to long-term residential programs. Additionally, many therapeutic communities are involved with drug 

courts, in-prison programs, offender re-entry programs, and continuing care. 

Attachment 1 

Safeguards for Equity for Mental Health and Addiction Prevention and 

Treatment 

Preemption 

Approximately 42 States have current laws that require some form of addiction 

and/or mental health coverage which mostly focus on addiction treatment protection 

and coverage. TCA strongly recommends that any legislation not preempt any State 

law or State provision that provides greater protection than Federal language. Such 

assurance needs to be correctly stated in Federal language. The House of Representatives, Paul Wellstone Mental Health and Addiction Equity Act of 2007 bill, currently has language that safeguards for preemption so that any State laws that provide greater consumer protections, benefits, rights or remedies are not impaired or 

deemed not enforceable. 

Medical Necessity 

Criteria for medical necessity should be based on uniform clinical criteria to be 

developed based on quality indicators, patient assessment, and effectiveness of care 

and not cost alone. Managed Care plans should not be given the discretion to define 

uniform criteria as part of their authority. It is recommended that uniform clinical 

patient placement criteria are developed and that other criteria currently used by 

a State or the American Society of Addiction Medicine (ASAM) should be considered 

as a floor and a minimum in any legislation. 

Managed Care 

Any policy that does not recognize the unique nature of addiction and our experience with the difficulty of providing necessary services for individuals covered under 


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managed care plans or schemes, which cause delays, denials, and have negative consequences to individuals needing help, should not be considered. Equity legislation 

should include safeguards to protect individuals with mental disease and substance 

use disorders from delays and denials. 

Transparency and Disclosure 

Any legislation should require that all plans be made available to providers and 

plan participants’ with copies of their medical necessity criteria, procedures, appeal 

process, and exclusions under such plans publicly available in advance to providers 

considering coverage under the plan, employers considering coverage with a plan, 

and participants considering or currently within a plan. 

Disease Equity 

Any legislation should require group health plans to provide mental disease and 

substance use disorder treatment benefits in parity with other diseases, illnesses 

and medical conditions. The timeliness of treatment can impact the early identification and recovery of an individual seeking treatment. Unfortunately, TCA members 

often see clients after they have lost their jobs and families. An individual with access to treatment earlier in their addiction should be given every chance to be treated with equity and without clinical discrimination. 

f 

Statement of Mike Fitzpatrick 

Chairman Stark, Representative Camp and Members of the Subcommittee, on behalf of the 210,000 members and 1,200 affiliates of the National Alliance on Mental 

Illness (NAMI), I want to thank you for convening this important hearing on the 

need for parity for mental illness and substance abuse parity in the Medicare program and private sector health plans. As the Nation’s largest organization representing people living with serious mental illness and their families, NAMI would 

like to offer strong support for equitable coverage for mental illness treatment 

across all public and private sector programs. 

Since NAMI’s inception in 1979, we have always supported enactment of standards that ensure nondiscriminatory coverage of treatments for illnesses such as 

schizophrenia, schizo-affective disorder, bipolar disorder, major depression and severe anxiety disorders. This demand for parity level coverage is rooted in basic principles in the founding of NAMI as a consumer and family organization. NAMI believes strongly that: 

1. mental illnesses are real, 

2. treatment for mental illness works—if you can access it, and 

3. there is simply no medical or economic justification for public sector programs 

or private health insurance plans to cover treatment for mental illness on different terms or conditions than any other illness. 

The Costs of Untreated Mental Illness Are Overwhelming for Our Nation 

• Mental disorders are the leading cause of disability in the U.S. for ages 15–44. • Suicide is the eleventh leading cause of death in the U.S., but is the third leading cause of death for people 10 to 24 years old. More than 90 percent of people 

who die by suicide have a history of mental illness. • Adults with serious mental illness die 25 years younger than other Americans. 

A man with serious mental illness is likely to die by age 53, compared with the 

average male life expectancy of 78 years. • Approximately 50 percent of students with a mental disorder age 14 and older 

drop out of high school; this is the highest dropout rate of any disability group. • Twenty-four percent of State prison and 21 percent of local jail inmates have 

a recent history of a mental health disorder. An alarming 65 percent of boys 

and 75 percent of girls in juvenile detention have at least one mental disorder. 

• Between 2000 and 2003, emergency department (ED) visits with a primary diagnosis of mental illness increased at four times the rate of other ED visits. 

• The annual economic, indirect cost of mental illnesses is estimated to be $79 

billion. Most of that amount—approximately $63 billion—reflects the loss of productivity as a result of illnesses. 

NAMI Strongly Supports H.R. 1663 

Chairman Stark, NAMI would like to congratulate you and your colleagues for 

bringing the Medicare Mental Health Modernization of 2007 (H.R. 1663) forward. 

For many years you have been the leader in Congress in pushing for equitable coverage for mental illness treatment in the Medicare program. As you know, Medicare 


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has perhaps the out-of-date and discriminatory benefit for mental illness and substance abuse treatment of any public or private sector program. The most widely 

recognized restrictions are the discriminatory limit of 190 lifetime days on inpatient 

care under Part A and the 50% cost sharing requirement for outpatient services 

under Part B. 

These restrictions—which apply only to mental illness treatment—were unacceptably intolerable in 1965, and are even more troubling in 2007. Over the past 40 

years we have witnessed enormous advances in treatment for mental illness. Treatment for disorders such as schizophrenia, bipolar disorder and major depression 

rival those for heart disease and hypertension in terms of efficacy and effectiveness. 

More importantly, the public health burden associated with major mental illnesses 

far exceeds that for many other medical disorders. It is simply unacceptable for the 

Medicare program—a critical public sector program that serves the most vulnerable 

and disabled individuals in our Nation—to impose discriminatory limits on mental 

illness treatment. 

Mr. Chairman, H.R. 1663 contains a number of important provisions that you 

have championed for years: 

• Reduction of the discriminatory 50% copayment for outpatient mental health 

services to 20%, and 

• Elimination of the arbitrary 190-day lifetime limit on inpatient psychiatric care. 

As in the past, NAMI strongly supports your leadership in moving to eliminate 

these outdated and unfair limits on treatment coverage. In addition, NAMI would 

also like to express support for long overdue improvements to the Medicare program 

in H.R. 1663 designed to update the program and make it consistent with evidencebased practice for treatment of mental illness. Among these critical improvements 

is the addition of new community-based residential and intensive outpatient mental 

health services. 

These important community-based services are part of the most widely recognized 

evidence-based, recovery-oriented service delivery model, programs of Assertive 

Community Treatment (ACT). Many States are currently using the Medicaid program to finance ACT services for the most disabled individuals living with mental 

illness. Unfortunately, changes to the Medicaid Rehabilitation Option now actively 

under consideration at the Centers for Medicare and Medicaid Services (CMS) would 

devastate the ability of States to fund these critical services. These changes have 

not been endorsed by Congress and NAMI would urge you and your colleagues to 

continue oversight efforts to hold CMS accountable for enacting these unauthorized 

and destructive changes. In the meantime, passage of H.R. 1663 will go a long way 

toward broadening access to intensive community-based services for Medicare beneficiaries—both elderly and non-elderly people with disabilities receiving SSDI—living with severe mental illness. Finally, NAMI also applauds the efforts of this legislation to address the shortage of mental health professionals in rural and medically 

underserved regions. 

Parity for Private Sector Health Insurance Plans Should Be a Top Priority 

for the 110th Congress 

Mr. Chairman, as you know Congress has been debating enactment of a Federal 

standard for equitable coverage of mental illness treatment in group health insurance plans since the early 1990s. This has included enactment of the Mental Health 

Parity Act in 1996 that required parity, but only for annual and lifetime dollar limits. Since 1996, various bills have been introduced—some of which made progress— 

to require full parity, i.e. by adding durational treatment limitations (limits on inpatient days and outpatient visits that apply only to mental illness) and financial limits (higher cost sharing, deductibles and out-of-pocket limits that apply only to mental illness). 

Mr. Chairman, as you know there are separate House and Senate parity bills (S. 

558 and H.R. 1424) that have broad bipartisan support. While there are differences 

between the bills, they are remarkably similar. 

The separate House and Senate bills contain a number of major similarities. Both 

bills: 

1. Expand on the limited 1996 Mental Health Parity Act that requires equitable 

coverage for mental illness only with respect to annual and lifetime dollar limits. Both expand on these requirements by requiring parity for treatment limitations (limits on inpatient days and outpatient visits that apply only to mental illness and substance abuse) and financial limitations (higher cost sharing, 

copayments or deductibles that applied to mental illness or substance abuse 

treatment). 


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2. Impose a parity standard as a coverage condition, i.e. neither bill mandates 

coverage of mental health or substance abuse treatment, but instead requires 

that if mental health and substance abuse benefits are offered, they must be 

on equal terms with medical surgical benefits. In other words, both bills allow 

employers and health plans to avoid the parity requirement by simply dropping 

mental health and substance abuse coverage altogether. 

3. Amend the laws governing self-insured ERISA plans and fully insured plans 

regulated by the States. This means that parity would reach the 82 million covered lives in self-insured plans that are beyond the reach of State parity laws. 

Likewise, both bills amend the Federal Public Health Services Act (PHSA) to 

reach fully insured plans in States that have not passed parity laws. By 

amending both ERISA and the PHSA will ensure that parity reaches an estimated 130 million Americans (82 million covered lives in ERISA plans and 45 

million in State regulated plans under the PHSA, 25 million of whom are in 

the 42 States with parity laws). 

4. Achieve parity for both mental illness and substance abuse disorders, a major 

step forward for individuals with co-occurring mental illness and substance 

abuse disorders. 

5. Exempt group health plans sponsored by small employers, those with 50 or 

fewer workers, from the requirements of parity coverage. 

6. Allow for employers or group health plans to seek an exemption if costs rise 

more than 2% as a result of compliance with the parity requirement. Both require health plans to first comply with the law for 6 months before seeking this 

cost increase exemption, and both would require plans getting an exemption 

to come back into compliance the following year. 

At the same time, there are differences between the House and Senate bills on 

a number of important issues. These differences include: 

• Scope of Benefits—Whether or not to define a list of required mental health and 

substance abuse diagnoses that must be covered by all health plans, or whether 

to defer to health plans and employers to define mental health and substance 

abuse benefits as under current law. • State Preemption—How a new Federal standard for mental health and substance abuse parity should interact with the existing 42 State parity law, i.e. 

whether or not a new Federal standard should displace all or part of a State 

law. • Out-of-Network Coverage—Both bills require parity for out-of-network benefits 

(i.e., equal treatment limits and equal cost sharing). However, the House bill 

goes further and requires plans to have an out-of-network benefit for mental 

health and substance abuse if it exists on the medical-surgical side. 

Mr. Chairman, NAMI has endorsed the Senate bill. It is a product of significant 

work by all sides in this debate and has already been reported by the Senate 

Health, Education, Labor and Pensions (HELP) Committee by an 18–3 vote. The 

Senate bill also has the support of groups representing employers and health plans 

that have fiercely resisted parity legislation in the past. The House bill also has 

broad support, with more than 250 cosponsors. 

In NAMI’s view, these circumstances create an enormous opportunity for agreement from all sides— 

• Democrats and Republicans in both the House and Senate, 

• President Bush, 

• Groups representing employers and health plans, and 

• NAMI’s colleagues among the advocacy groups representing consumers, families, providers and professionals. 

This is the moment for mental illness and substance abuse insurance parity. The 

differences between the House and Senate bills are narrow and can easily be 

bridged if the political will is there among all sides. More importantly, the broad 

bipartisan support for this legislation exceeds that for any other major health care 

proposal in the 110th Congress. Enactment of mental illness parity will demonstrate 

that Congress and the President can come together to produce meaningful health 

care reform for the American people. It is imperative that equitable coverage for 

mental illness treatment reach the 82 million Americans in ERISA self-insured 

plans that are beyond the reach of the 42 State parity laws. 

Conclusion 

Mr. Chairman, thank you for convening this important hearing. NAMI looks forward to working with you to achieve enactment of both H.R. 1663 and S. 558–H.R. 

1402 this year. 

f 


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Statement of National Association of Anorexia Nervosa and Associated 

Disorders 

The National Association of Anorexia Nervosa and Associated Disorders (‘‘ANAD’’) 

is the Nation’s oldest nonprofit organization dedicated to education, early detection, 

and prevention of anorexia nervosa, bulimia nervosa, binge-eating disorder, and obesity. ANAD was founded in 1976 by Vivian Meehan, RN, DSc. At that time, there 

was literally no information for sufferers or families and no support systems for people with eating disorders. 

Over the past 30 years, ANAD has grown into a national and international association with education and support systems in 50 States and several foreign countries. ANAD responds to over 5,000 hotline calls yearly, provides counseling 

and referrals, sponsors a national network of free support groups, and offers education and prevention programs to promote self-acceptance and 

healthy lifestyles. Together with over 250 support groups, victims, families, 

laypersons, and health care professionals, ANAD advocates on behalf of the countless individuals and families who have been or will be impacted by eating disorders 

in their lifetimes. 

Eating disorders are at epidemic levels in America. An estimated seven million 

women and one million men suffer from eating disorders, and they impact all segments of society—the young and old, the rich and poor, and all ethnic groups including African American, Latino, Asian and Native American. Eating disorders cause 

tremendous suffering for victims and families. Anorexia nervosa has the highest 

mortality rate of any mental illness; the most frequent causes of death, according 

to the NIMH, are complications of the disorder, including cardiac arrest or electrolyte imbalance and suicide. Eating disorders are treatable and sufferers can recover 

provided that they receive adequate treatment. 

ANAD receives hundreds of calls from individuals and their families who have 

been denied health insurance coverage and are desperately seeking access to appropriate treatment for their illnesses. If not properly treated, victims, like Amy 

Kuehn, Co-leader of ANAD’s Indiana Eating Disorders Coalition, suffer irreparable harm and find themselves requiring more and more costly health services 

throughout their lives. 

Amy Kuehn actively suffered from eating disorders for over 20 years. Her personal account illustrates how discriminatory insurance practices pose major barriers 

to appropriate mental health treatment. All too often the burden of inequitable mental health coverage is unfairly borne by individuals like Amy resulting in devastating personal and financial losses. Amy may have been more fortunate than people in the majority of States in the U.S. who have no health care coverage for their 

eating disorders. But if Amy had access to appropriate care at the onset of her illnesses, she may have avoided more than 20 years of costly and inadequate treatment for her eating disorders. 

With the overwhelming number of personal tragedies that occur absent or with 

unequal mental health coverage, ANAD urges passage of H.R. 1424, the Paul 

Wellstone Mental Health and Addiction Equity Act of 2007. Federal mental health 

parity now can make the difference between life and death for a person with an eating disorder. The inclusion of eating disorders under the Paul Wellstone Mental 

Health and Addiction Equity Act of 2007 means the removal of major restrictions 

and limitations throughout the Nation to early detection and access to treatment, 

which offers the best chance for recovery and prevention of the lifelong effects of 

these potentially chronic and disabling illnesses. 

A Personal Account: How Inequitable Mental Health Coverage Creates Major 

Barriers To Appropriate Treatment for Eating Disorders 

My name is Amy Kuehn. I am 36 years old, a mother of two, college graduate, 

and in recovery from anorexia nervosa and bulimia nervosa. I actively suffered from 

my eating disorders for over 20 years before I started my long-term recovery. My 

eating disorders have caused short-term and chronic medical complications. I have 

suffered from kidney failure, bleeding ulcerations in my esophagus and stomach, 

and extremely low blood pressure and heart rate. I was diagnosed with osteoporosis 

at age 30, and with chronic anemia, chronic GERD, gastric ulcers, dental erosion, 

and heart conditions. 

My eating disorders began when I was 10 years old. Under my parents’ insurance, 

I received treatment that was misguided and inadequate as a result of existing discriminatory insurance practices. I entered an adolescent psychiatric inpatient facility for 6 weeks during my senior year of high school. I spent that time with other 

adolescents who carried diagnoses of conduct disorder, drug addiction, alcohol addiction, oppositional-defiant disorder, and depression but nobody else there shared my 


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diagnoses of anorexia and bulimia, except for one nurse who confided in me that 

she often vomited after eating. 

While in college in 1991, I was no longer eligible for my parents’ insurance and 

had to obtain my own. Between 1991 and 2003, when I started my long-term recovery, I had numerous psychiatric hospitalizations for anorexia nervosa, bulimia 

nervosa, severe depression with and without suicidal ideation, and suicide attempts. 

Insurance dictated whom I could see which meant that at times, I still had to settle 

for extremely unqualified psychiatrists and doctors and inpatient psychiatric hospitalizations designed for persons with bipolar, schizophrenia and other mental illnesses unrelated to my eating disorders. 

While my insurance covered parts of those hospitalizations, there were enormous 

expenses that were not covered. I was married in 1993 so this became marital debt. 

I also had my children in 1995 and 1998 so finances became difficult to manage. 

Finally, in January 2001, we had no choice but to file for bankruptcy on my approximately $200,000 of bills related to care, however inadequate, for my eating disorders. 

I can only imagine how things could have been different for me if my insurance 

would have covered eating-disorders specific treatment when I was young. The enormous personal and financial costs incurred for years of suffering from my illnesses, 

expensive, unnecessary, and inappropriate psychiatric hospitalizations, physical deterioration caused by my anorexia and bulimia, and the emotional toll of fighting 

with my insurance company could have been avoided if only I had insurance coverage that provided access to treatment for eating disorders. 

I do not consider my own story to be better or worse than others’ stories, just representative. I am one of many persons who either have no health insurance coverage 

for eating disorders or insurance coverage that restricts access to treatment for my 

life-threatening conditions. While I cannot regain over 20 years of disability or reverse the permanent physical effects of my eating disorders, this Federal mental 

health parity legislation before you can offer the increasing number of victims, including children as young as 6 years of age, equitable access to early and specialized 

care and the promise of early recovery that was so unavailable to me. 

For more information, please contact Mary Elsner, ANAD’s Director of 

Advocacy and Government Affairs. 

f 

Statement of National Association of Health Underwriters, Arlington, VA 

The National Association of Health Underwriters (NAHU) is the leading professional trade association for health insurance agents and brokers, representing more 

than 20,000 health insurance producers and employee benefit specialists nationally. 

Our members service the health insurance policies of millions of Americans and 

work on a daily basis to help individuals and employers purchase health insurance 

coverage. As such, we know first-hand how much the cost of health insurance coverage is impacting our Nation’s employers and the overall economy. NAHU feels 

that any measure to expand Federal mental health parity requirements should take 

into consideration the impact that such legislation could have on the cost of group 

health insurance and the ability of employers to continue to provide coverage for 

their employees. 

NAHU believes that the current Federal law for mental health parity has served 

group plans well. The current efforts in Congress to craft a new parity requirement, 

however, have come a long way to bridge the differences that have stifled passage 

of changes to the current parity requirements in the past. We are particularly 

pleased with the provisions in both S. 558 and H.R. 1424 to preserve plan medicalmanagement practices and the exemption for individual and small-group plans from 

the proposed requirements. 

However, NAHU is concerned about provisions in H.R. 1424 that differ from the 

Senate bill and would use the DSM–IV for purposes of coverage determinations. We 

believe such a Federal coverage mandate on employers would drive up costs, and 

is unprecedented in terms of other medical specialties. The DSM–IV was developed 

as a teaching tool; it was never intended to be a diagnostic coding guide for reimbursement. Furthermore, many of the most comprehensive plan designs maintain 

differences between categories of mental health conditions, and only provide coverage to biologically-based mental illnesses, as opposed to some of the more arbitrary problems outlined in the DSM–IV like caffeine addiction and jet-lag. Employer-sponsored health plans need the flexibility to experiment with differing coverage options to control costs, and mandating coverage like this would take this 

needed flexibility from employers. NAHU feels that the language in S. 558, which 


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allows insurers and employers to decide which mental health benefits they will 

cover, is far preferable. 

As you consider this important legislation, please keep in mind that employers are 

struggling to continue to provide health insurance benefits to employees, as costs 

continue to increase each year. Parity requirements will not benefit consumers if 

their cost creates a barrier to entry and causes employers to drop coverage. The language in S. 558 reflects a fair and carefully crafted compromise involving all interested parties, including employers, insurers and mental health parity advocates. It 

provides needed consumer protections in a way that won’t cause excessive cost increases. NAHU urges the Committee to consider making changes to H.R. 1424 so 

that it will more closely mirror its counterpart legislation, S. 558. 

Thank you for the opportunity to provide comment on H.R. 1424. If you have any 

questions, or if NAHU could be of further assistance, please do not hesitate to contact me. 

f 

National Association of Pediatric Nurse Practitioners 

March 27, 2007 

The Honorable Pete Stark, Chairman 

Ways and Means Health Subcommittee 

1136 Longworth House Office Building 

Washington, D.C. 20515–6349 

Dear Chairman Stark: 

The National Association of Pediatric Nurse Practitioners (NAPNAP) represents 

approximately 7,000 members as the professional association for pediatric nurse 

practitioners and other advanced practice nurses who care for children. Pediatric 

nurse practitioners are registered nurses with advanced education and clinical experience and provide primary care services to children from birth to 21 years of age. 

We write to you today to provide support for the Subcommittee’s March 27 hearing on mental health parity. Although the hearing’s focus was predominantly on 

mental health and substance abuse parity for the Medicare program, we understand 

all too well that Medicare coverage decisions often have a profound effect on commercial health coverage decisions. 

The incidence of children and adolescents with mental health problems in the 

United States is significant—with as many as one in five children with a 

diagnosable mental, emotional or behavior disorder. An estimated two-thirds of all 

young people with mental health problems are not receiving the help they need. The 

National Association of Pediatric Nurse Practitioners is working to raise public 

awareness of these problems, correct common misperceptions, and implement preventive interventions targeted in children through its KySSsm Program (Keep your 

children/yourself Safe and Secure). NAPNAP strongly values educational-behavioral interventions to teach children, 

youth, and their parents all aspects of physical and emotional safety and to build 

self-esteem, as well as other developmental assets. The KySSsm Program promoted 

the mental health of children and adolescents through: 

• integration of mental health promotion, screening, and early evidence-based 

interventions; • health care that includes prevention, early recognition and treatment of mental 

health problems in childhood; 

• promotion of optimal level of functioning and development that will form the 

foundation for productive adult years. 

We have not yet had the opportunity to review your legislation, H.R. 1663 to address mental health parity, but look forward to offering our support. We support 

H.R 1367 by Representative Patrick Kennedy, a bill that requires equity in the provision of mental health and substance-related disorder benefits under group health 

plans. 

If we can be of assistance to the Committee on this issue, please feel free to contact our Washington Representative, Amy Demske. 

Sincerely, 

Patricia Clinton, PhD, RN, ARNP, FAANP 

f 

President 


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Statement of Kathleen Grant, Portland, Oregon 

The Research Society on Alcoholism (RSA) welcomes the opportunity to submit 

this statement in support of Congress’ consideration of the ‘‘Paul Wellstone Mental 

Health and Addiction Equity Act’’ (H.R. 1424) to improve the overall health of all 

Americans. RSA is a professional research organization whose 1,600 members conduct basic, clinical, and psychosocial research on alcoholism and alcohol abuse. 

RSA’s physicians, scientists, researchers, clinicians, and other experts work closely 

with National Institutes of Health (NIH) and National Institute on Alcohol Abuse 

and Alcoholism (NIAAA) to stimulate critical and innovative research initiatives in 

an effort to address this Nation’s myriad of health problems that are directly attributable to heavy alcohol use, alcohol abuse, and alcoholism. 

Alcoholism is a serious disease that affects the lives of millions of Americans, devastates families, compromises national preparedness, and burdens the country’s 

health care systems. It is beyond cavil, that each dollar spent on alcoholism research will pay huge dividends for all Americans. RSA applauds the efforts by Congressmen Patrick Kennedy (D–RI) and Jim Ramstad (R–MN) to require health 

plans offering mental health benefits to cover an array of mental health and addiction disorders. By increasing access to care, the costly toll on society and the hindrance it places on families can be reduced. 

Epidemiologic studies have shown that substance abuse affects an estimated 25 

million Americans. The monetary cost to the public and the economy because of reduced productivity, property damage, accidents, and health care are astounding. For 

this reason, RSA respectfully urges Members of the Ways and Means Committee to 

ensure that sufficient steps are taken to prevent and treat alcoholism and the illnesses, injuries, and personal loss associated with the abuse of alcohol. 

Parity is needed for the coverage of both mental health and substance use services, because people in all stratums of the population are at risk for serious mental 

illnesses and alcohol problems. According to the National Conference of State Legislatures, 42 States now offer some form of limited parity for the treatment of mental 

health disorders. Although, only 21 of those States include coverage for substance 

abuse, alcohol or drug addiction. 

Alcoholism is a tragedy that touches virtually all Americans. More than half of 

all adults have a family history of alcoholism or problem drinking. One in ten Americans will suffer from alcoholism or alcohol abuse and their drinking will impact 

their families, the community, and society as a whole. Untreated addiction costs 

America $400 billion annually and recent research indicates that alcoholism and alcohol abuse alone, cost the Nation approximately $185 billion annually. One-tenth 

of this pays for treatment; the rest is the cost of lost productivity, accidents, violence, and premature death. 

The Centers for Disease Control and Prevention (CDC) ranks alcohol as the third 

leading cause of preventable death in the United States. Heavy drinking, for example, defined as having five or more drinks at least once a week, contributes to illness 

in each of the top three causes of death: heart disease, cancer, and stroke. 

The CDC also links excessive alcohol use, such as heavy drinking and binge 

drinking, to numerous immediate health risks that pose a menace not only to those 

consuming alcohol, but those surrounding them including traffic fatalities, unintentional firearm injuries, domestic violence and child maltreatment, risky sexual behaviors, sexual assault, miscarriage and stillbirth, and a combination physical and 

mental birth defects that last throughout the life of a child. As a case in point, fetal 

alcohol syndrome is the leading known cause of mental retardation. 

Statistically, alcohol is a factor in 50 percent of all homicides, 40 percent of motor 

vehicle fatalities, 30 percent of all suicides, and 30 percent of all accidental deaths. 

The long-term effects of alcohol abuse are just as extreme, leading to chronic organ 

diseases, bone loss, neurological and cardiovascular impairment as well as social 

and psychiatric problems including depression, suicidality and anxiety. 

The NIAAA, along with the National Institute on Drug Abuse (NIDA), and the 

Substance Abuse & Mental Health Services Administration (SAMSHA), have conducted research that demonstrates that substance abuse is particularly problematic 

in younger adolescents because it is the time when individuals are most vulnerable 

to addiction. According to the CDC, people aged 12 to 20 years drink almost 20% 

of all alcohol consumed in the United States. The NIAAA’s National Epidemiologic 

Survey on Alcohol-Related Conditions (NESARC) states that 18 million Americans 

(8.5% of the population age 18 and older) suffer from alcohol use disorders (AUD), 

and only 7.1% of these individuals have received any treatment for their AUD in 

the past year. According to SAMHSA, in 2005, 20.9 million Americans needed treatment for AUD but did not receive it. 


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The U.S. scientific community is addressing alcoholism and addiction disorders at 

many different levels, starting at the earliest stages of human development. For instance, the NIAAA’s NESARC survey sampled across the adult lifespan to allow researchers to identify how the emergence and progression of drinking behavior is influenced by changes in biology, psychology, and in exposure to social and environmental inputs over a person’s lifetime. Scientists at NIH are supporting research 

to promulgate preemptive care for fetuses, early childhood, and adolescents; since 

children who engage in early alcohol use also typically display a wide range of adverse behavioral outcomes such as teenage pregnancy, delinquency, other substance 

use problems, and poor school achievement. 

NIAAA has been working closely with SAMHSA to play a leading role for the 

work of the Interagency Coordinating Committee for the Prevention of Underage 

Drinking established under the Sober Truth on Preventing Underage Drinking Act 

or STOP Act (P.L. 109–422), and for the forthcoming Surgeon General’s Call to Action on underage drinking. 

The data on alcohol abuse are particularly disquieting in a subsection of the population that is unique for observing the effects of alcohol over a large cross-section 

of individuals. In the military, the costs of alcoholism and alcohol abuse are enormous. The 2005 results of the Department of Defense’s (DoD) 2005 Survey of Health 

Related Behaviors among Active Duty Military Personnel demonstrate that the 

rates of heavy drinking remain elevated among U.S. military personnel. This was 

the first time that this survey series has evaluated behaviors related to mental wellbeing, work stress and family stress associated with deployment to Iraq, Afghanistan, and other theaters of operation. 

The prevalence of heavy drinking is higher in the military population (16.1%) 

than in the civilian population (12.9%). About one in four Marines (25.4%) and 

Army soldiers (24.5%) engages in heavy drinking; such a high prevalence of heavy 

alcohol use may be cause for concern about military readiness. Furthermore, each 

individual Service branch showed an increasing pattern of heavy drinking from 2002 

to 2005. These patterns of alcohol abuse, which are often acquired in the military, 

frequently persist after discharge and are associated with the high rate of alcoholrelated health disorders in the veteran population. 

The Department of Veterans Affairs (VA) states that 10 to 33 percent of survivors 

of accidental, illness, or disaster trauma report problematic alcohol use, especially 

if they are troubled by persistent health problems or pain. Also, individuals with 

a combination of posttraumatic stress disorder (PTSD) and alcohol use problems 

often have additional mental or physical health problems. According to the VA, as 

many as 10 to 50 percent of adults with alcohol use disorders and PTSD also have 

one or more of the following serious disorders: anxiety disorders (such as panic attacks, phobias, incapacitating worry, or compulsions), mood disorders (such as major 

depression or a dysthymic disorder), disruptive behavior disorders (such as attention 

deficit or antisocial personality disorder), addictive disorders (such as addiction to 

or abuse of street or prescription drugs), and chronic physical illness (such as diabetes, heart disease, or liver disease). 

While the high rates of use and abuse of alcohol are alarming, the good news is 

that this Nation is poised to capitalize on unprecedented opportunities in alcohol research, opportunities which must be seized. Scientists are currently exploring new 

and exciting ways to prevent alcohol-associated accidents and violence. Importantly, 

prevention trials are developing methods to effectively address problem alcohol use. 

Further, scientists have identified discrete regions of the human genome that contribute to the inheritance of alcoholism. Our improved genetic research will accelerate the rational design of medications to treat alcoholism and also improve our 

understanding of the interaction and importance of heredity and environment in the 

development of alcoholism. 

The field of neuroscience is another important and promising area of alcohol research. The development of more effective drug therapies for alcoholism requires an 

improved understanding of how alcohol changes brain function to produce craving, 

loss of control over drinking behavior, tolerance to alcohol’s effects, and the alcohol 

withdrawal syndrome. NIAAA is testing therapeutic agents that target different 

neurobiological substrates of alcohol dependence. 

The Research Society on Alcoholism believes that enactment of the legislation proposed by Congressmen Kennedy and Ramstad will provide the appropriate health 

coverage for those individuals who are in need of urgent care and treatment of alcohol use disorders. 

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Therapeutic Communities of America 

March 27, 2007 

The Honorable Fortney ‘‘Pete’’ Stark, Chairman 

U.S. House of Representatives 

Committee on Ways and Means 

Subcommittee on Health 

Room 1102 LHOB 

Washington, DC 20515 

The Honorable Dave Camp, Minority Ranking Member 

U.S. House of Representatives 

Committee on Ways and Means 

Subcommittee on Health 

Room 11139 LHOB 

Washington, DC 20515 

Dear Chairman Stark and Representative Camp: 

As you know, only 18.2% of all Americans over the age of 12 needing treatment 

actually receive it. This is a startling statistic and shows the need for public policy 

and community efforts to end discrimination and provide access to quality care earlier for individuals with substance use and mental health disorders. Equity legislation can assist with closing this treatment gap. 

Thank you for holding the hearing on March 27, 2007 on Mental Health and Substance Abuse Parity. Therapeutic Communities of America (TCA) provides the following comments for your consideration. The introduction of the bill last week, to 

require parity in mental health services for Medicare beneficiaries and eliminate a 

190-day limit on inpatient treatment and lowering the copay requirements will improve access for seniors to receive needed services that are client-based and will 

allow for better outcomes. It confirms the necessity to establish in publicly-funded 

programs equity for access and effectiveness. 

TCA member programs are mostly publicly funded through an array of public programs that weave and leverage public funding to provide client-based holistic addiction and mental health services to low income Americans. TCA member programs 

treat low income Americans from pregnant women to seniors in need of mental 

health and addiction services. TCA appreciates the importance of equity for mental 

health coverage for Medicare recipients and is respectful of the efforts of your Committee. 

Therapeutic communities receive limited third party private payer reimbursement 

and although not directly impacted by health plan parity bills our members through 

their experience know the importance to develop consistent bills that would not 

place additional limitations or consequence on public services by permitting reimbursement to be based on costs and not be based on patient-based clinical criteria 

and quality indicators. TCA has attached a list of safeguards that should be considered as any legislation is advanced for private health plan parity bills. Those concerns include preemption, medical necessity criteria, managed care, disclosure, and 

equity. The Paul Wellstone Mental Health and Addiction Equity Act of 2007 recently 

introduced addresses those concerns and we hope that the bill is not amended to 

weaken any of its current safeguards, and as such, those provisions in the bill remain through final passage. Your hearing demonstrates the Committee’s understanding for policy that advances appropriate care to all our citizens. 

We respectfully request that as you work toward equity for mental health and 

substance abuse treatment and prevention services that you consider the principles 

of the National Institute on Drug Abuse (NIDA) for drug treatment effectiveness. 

NIDA research shows the importance of length of stay in treatment and other principles that should be protected to assure equity with other chronic illnesses. Some 

of those principles include: 

• No single treatment is appropriate for all individuals. 

• Effective treatment attends to multiple needs of the individual, not just his or 

her drug use. 

• Remaining in treatment for an adequate period of time is critical for treatment 

effectiveness. 

• Recovery from substance abuse can be a long process and frequently requires 

multiple episodes of treatment. 

• Treatment of addiction is as successful as treatment of other chronic diseases 

such as diabetes, hypertension and asthma. 


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1 Based in part on Principles of Drug Addiction Treatment—A Research-Based Guide, National 

Institute on Drug Abuse, National Institutes of Health, and NIH Publication No. 004180. 

• Substance abuse treatment programs should be constructed on evidence-based 

methodologies that are outcome based and meet performance measures.1

Depending on the stability and support an individual with a substance use disorder has within their environment; and the progressive stage of their disease, a patient will need criteria that understands the type, kind, duration, and multiple 

treatment needed by that person for recovery. It is important that a skilled service 

provider with specific training in addiction should do assessment, referral, placement, clinical determinations, and treatment of an individual with substance use 

disorders. Substance abuse treatment is a process that moves from motivation and 

stabilization to recovery as it is with other chronic diseases. 

TCA appreciates your commitment and your leadership on this important issue. 

Please contact us if we can provide additional information at (202) 296–3503. 

Sincerely, 

Linda Hay Crawford 

Executive Director 

Therapeutic Communities of America (TCA), founded in 1975, represents over 600 

programs across the country dedicated to serving those with addiction and mental 

health disorders. Therapeutic Communities provide a comprehensive continuum of 

care to patients, many of whom have multiple barriers to recovery, such as co-occurring mental illness, the homeless, adolescents, pregnant women, and HIV/AIDS. 

Therapeutic Communities also strive to help individuals secure family unification 

and successful welfare-to-work outcomes. 

The Therapeutic Community methodology of treatment was established in the late 

1950’s, addressing the entirety of social, psychological, cognitive, and behavioral factors in combating alcohol and drug abuse. Traditionally, Therapeutic Communities 

have been community-based long-term residential substance abuse treatment programs. 

In recent years, TCA members have expanded their range of services, providing 

outpatient, prevention, education, family therapy, transitional housing, vocational 

training, medical services, and case management in addition to long-term residential programs. Additionally, many therapeutic communities are involved with drug 

courts, in-prison programs, offender re-entry programs, and continuing care. 

Attachment 1 

Safeguards for Equity for Mental Health and Addiction Prevention and 

Treatment 

Preemption 

Approximately 42 States have current laws that require some form of addiction 

and/or mental health coverage which mostly focus on addiction treatment protection 

and coverage. TCA strongly recommends that any legislation not preempt any State 

law or State provision that provides greater protection than Federal language. Such 

assurance needs to be correctly stated in Federal language. The House of Representatives, Paul Wellstone Mental Health and Addiction Equity Act of 2007 bill, currently has language that safeguards for preemption so that any State laws that provide greater consumer protections, benefits, rights or remedies are not impaired or 

deemed not enforceable. 

Medical Necessity 

Criteria for medical necessity should be based on uniform clinical criteria to be 

developed based on quality indicators, patient assessment, and effectiveness of care 

and not cost alone. Managed Care plans should not be given the discretion to define 

uniform criteria as part of their authority. It is recommended that uniform clinical 

patient placement criteria are developed and that other criteria currently used by 

a State or the American Society of Addiction Medicine (ASAM) should be considered 

as a floor and a minimum in any legislation. 

Managed Care 

Any policy that does not recognize the unique nature of addiction and our experience with the difficulty of providing necessary services for individuals covered under 


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managed care plans or schemes, which cause delays, denials, and have negative consequences to individuals needing help, should not be considered. Equity legislation 

should include safeguards to protect individuals with mental disease and substance 

use disorders from delays and denials. 

Transparency and Disclosure 

Any legislation should require that all plans be made available to providers and 

plan participants’ with copies of their medical necessity criteria, procedures, appeal 

process, and exclusions under such plans publicly available in advance to providers 

considering coverage under the plan, employers considering coverage with a plan, 

and participants considering or currently within a plan. 

Disease Equity 

Any legislation should require group health plans to provide mental disease and 

substance use disorder treatment benefits in parity with other diseases, illnesses 

and medical conditions. The timeliness of treatment can impact the early identification and recovery of an individual seeking treatment. Unfortunately, TCA members 

often see clients after they have lost their jobs and families. An individual with access to treatment earlier in their addiction should be given every chance to be treated with equity and without clinical discrimination. 

Æ 


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