Docket: CMS-2009-0040 

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 

Comment On: CMS-2009-0040-0048 

Interim Final Rules under the Paul Wellstone and Pete Domenici Mental Health Parity and 

Addiction Equity Act of 2008 

Document: CMS-2009-0040-DRAFT-0069 

Samuel Knapp, Ed.D. Director of Professional Affairs 

Submitter Information 

Name: Samuel Knapp 

Address: 

Harrisburg, PA, 17102-1748 

Organization: Pennsylvania Psychological Association 

General Comment 

Attachments 

PUBLIC SUBMISSION 

As of: April 28, 2010 

Received: April 27, 2010 

Status: Draft 

Category: Association - Other

Tracking No. 80ae158d 

Comments Due: May 03, 2010

Submission Type: Paper

CMS-2009-0040-DRAFT-0069.1: Samuel Knapp, Ed.D. Director of Professional Affairs

Page 1 of 1

file://C:\Documents and Settings\gelman.beth\Local Settings\Temporary Internet Files\OL... 4/28/2010
PENNSYLVANIA PSYCHOLOGICAL 

ASSOCIATION 

41 6 Forster Street Harrisburg, Pennsylvania 17102-1 748 Telephone 71 7-232-381 7 Fax 71 7-232-7294 

An ajiliate ofthe 

American P'chological 

Association 

April 21, 2010 

Officers 

Centers for Medicare and Medicaid Services 

President 

Steven R. Cohen. P~.D. Department of Health and Human Services 

President-Elect 

Mark A. Hogue, Psy.D 

Attention: CMS-4140, PO Box 8016 

Baltimore, MD 2 1244- 1850 

Past President 

Nancy H. chubb, MBA, P~.D. RE: CMS-4140-IFC (Interim Final Rules Under the Paul Wellstone and Pete 

Secretary Domenici Mental Health Parity and Addiction Equity Act of 2008). 

Cheryll Rothery-Jackson, Psy.D. 

Treasurer Dear Sir or Madam: 

Vincent J. Bellwoar, Ph.D. 

Board Chairs On behalf of the Pennsylvania Psychological Association, we are 

Communications commenting on the Interim Final Rules under the Paul Wellstone and Pete 

David J. Palmiter Jr., P~.D. Domenici Mental Health Parity and Addiction Equity Act of 2008. We urge the 

Internal Affairs adoption of the current interim regulations. 

Eric H. Mspring, Ph.D. 

ProfeSSional Psychology 

Adam C. Sedlock Jc, M.S. 

Program &Education 

Tad T. Gorske, Ph.D. 

Public Interest 

Bruce E. Mapes, Ph.D. 

School Psychology 

Gail R. Karafin, Ed.D. 

PPAGS 

Marie C. Weil, M.A 

APA Representatives 

Donald McAleer, Psy.D. 

Dianne S. Salter, Ph.D., J.D. 

Executive Director 

Thomas H. Dewall, CAE 

Director of Professional Affairs 

6 Deputy Executive Director 

Samuel J. Knapp, Ed.D. 

These interim final regulations address two important issues related to . insurance discrimination against persons with mental illness or substance abuse 

problems that violate the Mental Health Parity law: the use of prior approvals to 

discourage utilization; and the lack of adequate access to services because of t 

inadequate provider panels. Each of these issues will be discussed below, 

although the issues overlap. 

Both of these issues are considered in the portion of the regulations 

dealing with nonquantitative treatment limitations. According to the regulations, 

"a nonquantitative treatment limitation is a limitation that is not expressed 

numerically, but otherwise limits the scope or duration of benefits for treatment" 

and includes a non-exhaustive list of treatment limitations that include "medical 

managed standards limiting or excluding benefitsn (p. 5412). We will describe in 

detail below how the nonquantitative treatment limitations have been used to 

contravene the goals of parity. These have implications for the costs of parity 

which are also described below. 

Government Rehtions 

Consultant 

Susan M. Shanaman, J.D 
Prior Approval Requirements Not Applied to Physical Health Care 

We urge the Department of Health and Human Services to retain the prohibition against 

nonquantitative treatment limitations as they pertain to medical management or prior 

authorizations. The regulations give an example dealing with prior approval (Example 2, (iii), p. 

5426) which holds that a plan violates parity if it denies the entire payment of services based on 

lack of prior approval, whereas they would reduce the payment by 25% of what they would 

otherwise pay for the lack of prior approval for medical or surgical benefits. 

Another example related to medical management is the requirement for authorizations 

(also called pre-certifications) for mental health or substance abuse care when similar prior 

authorizations are not required for physical health care. Authorizations for mental health 

treatment limit the ability of patients to access the services that they or their employer have paid 

for, and similar or comparable requirements are not required to access physical health care. 

The authorizations for mental health services often include restrictions that do not apply in 

physical health care. These restrictions may include limiting the time period in which the service 

must be provided (sometimes within vely narrow time frames), specifjing the procedure codes 

that must be used, and placing such a large administrative burden on providers that they 

discourage psychologists from accepting patients with policies that have an authorization process. 

Below we present brief information on authorizations and then describe how they have been 

implemented with mental health care in a manner that is not done with physical health care. 

Background on Authorizations 

A survey conducted by the Pennsylvania Psychological Association in 2008 revealed 

widespread use of "authorizations" by health insurers. These authorizations permit beneficiaries to 

use their mental health benefits for a specified number of sessions (usually 8, but one insurer in 

Pennsylvania currently restricts the number of sessions to 5 and cases have been documented 

where they have authorized one 1,2, or 3 sessions at a time). Payment is denied if the insurer 

does not have a copy of the authorization on record 

Interviews with psychologists revealed that most psychologists have had never had an 

authorization denied because of medical necessity reasons. Several psychologists reported that 

they have received literally thousands of authorizations without one single denial. This is 

consistent with the report of one managed care company, Value Options, which reported less 

than 1 of authorizations were denied, however, they did not speajr if they were denied for 

clinical purposes or for administrative purposes (Ledsky, 2000). a 

Authorizations May Put Arbitrary Restrictions on the Period of Time in Which the Service # 

Must Be Provided 

In contrast to ensuring medical necessity, often the authorizations place medically 

contraindicated restrictions on services. For example, a company may vary the length of the 

authorization from two months to a year. If the services cannot be delivered within the restricted 
time period, then the providers have to resubmit authorizations, again resulting in unnecessary 

paperwork and the potential for a disruption in treatment. We Know of no plans which place 

similar limitations on access to physical health care. 

Authorizations May Restrict the Procedure Codes That May Be Used 

Some authorizations restrict the type of service that can be offered. For example, an 

adolescent patient may receive authorizations for four sessions of individual therapy and four 

sessions of family therapy during a limited time period. If the psychologist were to deliver five 

sessions of individual therapy during this time period, then that psychologist could not collect 

payment for the 5" session of individual therapy. Of course, no mental health professional can 

always predict on the basis of one initial interview what the optimal mix of family and individual 

therapy sessions should be. We question whether the prior authorizutions for physical health 

problems put such restrictions on the procedure codes that can be used. 

Authorizations May Include Other Unique Requirements That Discourage Patient Care 

One insurer requires psychologists to get outpatient authorizations for all inpatient 

consultations. Often these consultations were for neurological evaluations or competency to 

consent to treatment evaluations that required a quick turnaround. These authorizations are never 

denied, but they do delay implementation of a health care service in a setting where timeliness is 

very important. Physicians do not have to get similar authorizations for inpatient services related 

to physical health. 

Another insurer reported that they required the psychologist to exhaust the 8 authorized 

sessions before she could apply for 8 more sessions, thus resulting in an intenuption in treatment. 

This problem was eventually corrected, but it is yet another example of a process applied to 

mental health that was not applied to physical health. 

Authorizations Place Such a Large Administrative Burden on Providers That They 

Discourage Utilization of Benefits 

Authorizations may take anywhere fiom 5 to 15 minutes to complete, but the larger 

problem comes from the laxity of insurers in storing these authorizations. The provider's 

administrative time for authorizations includes both the time the secretarial or professional staff 

need to create the authorization, submit it, input it into the billing sohare program, and file a 

hard copy of the approval. The provider's administrative cost must also include time spent to 

correct the authorizations that get lost by the insurer, and time spent taking with patients about 

lost or delayed authorizations, or incorrect information on the authorizations. At least three steps 

are required to correct a clean authorization (where payment for an authorized service has been 

denied because of an error on the pan of the insurer). The professional or clerical staff must 

double-check paperwork to ensure that the claims are indeed clean, call the insurer which then 

must search their records and update their systems, and then send the documentation to the 
insurer. One group practice estimates that this takes 30 minutes per adjustment (assuming that the 

total cost of an hour of clerical staff is $36 [including salary, benefits, work station costs, etc.], 

then it costs $18 to "clean up" an authorization). Furthermore, providers need to assume some 

services will never get paid for because of authorization problems. ' 

These cumulative burdens placed on mental health care, which are not placed on physical 

health care, have the impact of discouraging psychologists fiom treating patients with certain 

insurance policies. 

Patient Access to Services 

The interim regulations state that nonquantitative treatment limitations could include 

"standards for provider admission to participate in a network including reimbursement rates" (ii 

(D), p. 5436). This is an important element that needs to be retained in the regulations. 

Regrettably, some insurers and managed care companies offer rates so low that they effectively 

deprive beneficiaries of the opportunity to use the mental health benefits included in their health 

care plans because of the unwillingness of providers to accept such low reimbursement rates. For 

example, in Pennsylvania the rates for the Procedure Code 90806 under Medicare are $90, but 

commercial insurers pay anywhere fiom $105 to $50. Access to health professionals is a factor 

influencing utilization. Culy, Tolpin, Hnderson, Jimenez, Kunick, & Peterson (2008) looked at 

more than 410,000 VA patients and found that travel distance impacted the likelihood that 

individuals would attend psychotherapy. 

Cost Implications 

Page 5424 of your commentary discusses the cost implications associated with the 

increased utilization of mental health and substance abuse disorder benefits. Many of the points 

that you make in your discussion are valid; however, the discussion fails to address the fact that 

the nonquantitative medical management controls placed on behavioral health actually increase 

costs and waste huge amounts of money. We believe that your cost analysis should include ways 

that the elimination of unique and discriminatory medical management controls will increase 

the moneys spent on actual patient cure. 

1 Although a study by Wilk et al. (2008) did not deal with commercial policies covered by mental 

health parity, it nonetheless shows the impact of nonquantitative procedures on access to care. 

Wilk et al. (2008) studied implementation of Part D of Medicare for patients who had dual 

eligibility (for both Medicare and Medicaid) and found that, 'in many cases, for every one hour of 

direct patient care there was one hour or more of administrative time for psychiatrists and their 

staff when certain drug plan policies applied" (p. 37). The increased administrative burden 

diverted psychiatric time away fiom direct patient care. 
We have documentation that, for some insurers, at some points in time, almost 50% of 

money allocated for outpatient mental health are spent on administrative purposes because of 

medical management procedures that are not applied to physical health. In 2005, we reviewed the 

administrative costs for insurers in Southeastern Pennsylvania using a behavioral health carve out. 

The behavioral health provider reported that 80% of its revenue went toward direct services and 

the rest for administrative services and profits (although the definition of direct services is 

questionable, since they considered 'case management" calls to be direct services, when we 

viewed them as a form of medical management). Also, we assume that the primary insurer had 

some administrative costs associated with its oversight of the behavioral health subcontractor. 

Nonetheless, even if we accept the intlated 80% figure to represent their direct services to patient 

and even if we assume NO administrative costs for the primary insurer, wefind that only 52% of 

the money allotted for outjmtient behavioral health actually gets spent on health care. This is 

derived by multiplying the 33% of the moneys that group providers have to spend on 

administrative costs and multiplying it by the 80% of the money that the managed care company 

claims that it spends on behavioral health care. 

If we exclude moneys spent on case management and spent by the primary insurer on their 

own administration and oversight of the carve-out company, and recognize that much professional 

time is spent in administrative tasks related to authorizations and other medical management 

procedures, we reach a figure where perhaps only 40% of the moneys allotted for outjmtient 

behavioral health actually get spent on health care. The waste in administrative resources was so 

huge that, in those policies that required a $40 copay, the copay covers all of almost all of the cost 

of service and the health insurance premiums contribute nothing or almost nothing to the health 

care service. 

We argue that parity in nonquantitative features will increase moneys spent on actual 

health care. Authorizations save money only to the extent that they deny payment for services 

based on administrative reasons, or discourage the utilization of medically necessary services. 

Also providers are more reluctant to accept patients who are represented by programs with 

authorizations, thus making it harder for patients to access their benefits. 

Thank you for your consideration of our concerns. 

Director of Professional AfEairs 
References 

Cully, J., Tolpin, L., Henderson, L., Jimenez, D., Kunik, M., & Peterson, L. (2008). 

Psychotherapy in the Veteran's Health Administration: Missed opportunities. 

Psychologrcal Services, 5, 3 20-3 3 1. 

Ledsky, K., Reynolds, E., V., Weissman, M., Ball, J., Rabinowitz, M., Collins, C., James, J., & 

Mansheim, P. (2000). Practice patterns for the outpatient treatment of depression in a 

case-managed delivery system: A utilization study. Professional Psychology: Research 

and Practice, 31, 543-546. 

Wilk, J., West, J., Rae, D., Rubio-Stipec, M., Chen, J., & Regier, D. (2008). Medicare 

Part D prescription drug benefit and administrative burden in the care of dually 

eligible psychiatric patients. Psychiatn'c Services, 59, 34-39.