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C. Additional Comments

While the implementation of parity does not necessarily imply development of integrated care |
models and the coordination of care, it certainly creates the opportunity for this. Over time, the |
integration of care, which may result from the decoupling of behavioral health care from stringent
utilization limits, could lead to clearly superior results in physical health and behavioral health. The |
impact of care coordination on outcomes is most positive in the context of an integrated care model.

There currently exists significant tension between behavioral health and physical health providers in
determining responsibility for cases that are not clearly one or the other (¢.g., a suicide attempt with
sublethal amounts of medication or trauma). In a unified model without treatment limits, the best,
most cost-effective care setting and discharge arrangements become available.

Thank you for the opportunity to comment on these important issues. : :

Sincerely, j

Locate mM Marbeno ts
Joseph M. Molina, MD

CEO and Chairman
Molina Healthcare, Inc.



May 28, 2009

Attn: MHPAEA Comments

Office of Health Plan Standards and Compliance Assistance
Employee Benefits Security Administration

Room N-5653

U.S. Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

Attn: CMS-4137-NC

Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8017

Baltimore, MD 21244-8010

CC:PA:LPD:PR (REG-120692-090)
Room 5205

Internal Revenue Service

P.O. Box 7604

Ben Franklin Station

Washington, DC 20044

Submitted via the Federal eRulemaking Portal: www.regulations.gov

Re: Request for Information Regarding the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008 (74 Fed. Reg. 19155, April 28, 2009)

Dear Sir/Madam:

Molina Healthcare, Inc. is writing to comment and offer recommendations regarding
implementation of the Paul Wellstone.and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008 (Pub. Law 110-343, the “MHPAEA”). We are responding to a Request for
Information (RFI) published in the Federal Register on April 28, 2009 (74 Fed. Reg. 19155).

Molina Healthcare, Inc. is a multi-state managed care organization that arranges for the delivery of
health care services to persons eligible for Medicaid, Medicare, and other government-sponsored
programs for low-income families and individuals. Molina Healthcare's ten licensed health plan
subsidiaries in California, Florida, Michigan, Missouri, Nevada, New Mexico, Ohio, Texas, Utah
and Washington currently serve approximately 1.3 million members.

Molina Healthcare, Inc. * 200 Oceangate, Suite 100, Long Beach, CA 90802
Phone: 562-435-3666 * www.MolinaHealtheare.com * Fax: 562-951-1505



Page 2 of 4

We understand that Medicaid managed care plans that offer mental health or substance use
disorder benefits are required to comply with the Mental Health Parity and Addiction Equity Act
of 2008 (MHPAEA) insofar as such requirements apply and are effective with respect to a health
insurance issuer that offers group health insurance coverage. We, therefore, appreciate this
opportunity to provide comments on the implementation of the MHPAEA.

A. Comments Regarding Economic Analysis, Paperwork Reduction Act, and Regulatory
Flexibility Act

Currently, all states provide behavioral health services for Medicaid beneficiaries and most provide
coverage for some substance use disorder benefits. As a result, each state has in place specific
policies and procedures to correspond with its covered benefits. If states are now required to
broaden the offered mental health benefits to match medical care benefits and that responsibility is,
in turn, passed.on to managed care companies, then policies and procedures would need to be
adjusted and/or added accordingly regarding utilization management and prior authorization
requirements and review timelines. The current process in place will largely remain the same, but
will be on a much broader scale to incorporate additional benefits. Such addition of benefits may
lead to enhanced burden of oversight, administration, and claims adjudication commensurate with
the increase in benefits and utilization.

Additional clinical reviews will also be necessary for ongoing outpatient or inpatient care, likely
resulting in the need for added clinical review staffing. This impact may be minimal, however,
with regard to adult outpatient services. While parity will end the setting of arbitrary limits, this
may not yield significant increased utilization among adults. However, we anticipate that children
may use extended benefits to a greater degree as they have adult advocates ensuring their
continued treatment engagement.

B. Comments Regarding Regulatory Guidance

Coverage levels for behavioral health and substance abuse vary but are dictated by the state.
Under the MHPABFA, states may no longer be able to set budget driven limits on care, such as 12
outpatient visits. Particularly in this current economic downturn, states may find this an excessive
burden. As a result, the central issue may become determining which Medicaid members qualify
for these benefits and which ones will be diverted to community mental health services funded

through blended dollars.

We are also unsure of how states will choose to care for Medicaid members who fall between
current benefit limits for the sub-chronic or sub-acute populations versus those who fall into
comprehensive services for Severe and Persistent Mental Illness. Furthermore, inpatient
management is variable by state, as some states manage this benefit directly, and others contract
with managed care organizations (MCOs) for prior authorization and concurrent review. Typically
amember’s inpatient care does not reach a technical benefit limit, but his or her hospital stay may
be closely monitored for when and how to transition him or her into long-term placement such as


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state hospital care. Consequently, the greatest impact of the MHPAEA may be on outpatient
utilization dollars rather than inpatient.

Substance abuse treatment coverage also comes in all shapes and sizes. For example, MCOs often

carry responsibility for medical detoxification as a medical benefit, although in some instances it
remains a substance abuse cost carve-out to the state unless medical complications of the detox
convert it to medical coverage (e.g., seizures). Subsequent residential or outpatient substance abuse

care can be divided along the continuum between what the MCO is contracted to cover (and with
what limits) versus what is covered by the state’s substance abuse funding allocation and delivery
system. The shift to state substance abuse services often involves a wait-list, so again, there will be

additional burden placed on the state budgets in bridging the gap.

Furthermore, we believe that Medicaid MCOs should be given the flexibility to structure their
provision of mental health and substance use disorder benefits such that the determination of any
treatment limits may take into account whether any additional services are available through the
Medicaid program once such limits are reached. Guidance should be issued to clarify that when
determining parity, Medicaid MCOs may consider whether additional services are available to the
beneficiary through the state with respect to treatment limits applicable to mental health or

substance abuse disorder services.

In addition, necessary changes to the regulatory structure in the Medicaid program to facilitate
compliance will lic primarily with the state’s structure of the benefit coverage mandate. The

amount of responsibility given to MCOs from the state as opposed to the benefits the states will

continue to manage themselves or through community mental health organizations will determine

the amount of regulatory guidance needed. It is important to note that there is significant
opportunity for improved quality and coordination of care when one entity manages the entire

spectrum of behavioral health and works as a team to maximize health, functional level and cost.

With respect to the criteria for medical necessity determinations made under the plan (or coverage),
es and clear standards for medical necessity of

we believe there are existing best practice guidelin:
mental health benefits. These are available as they are for any medical care need. In addition,

denial procedures remain the same for behavioral health/substance abuse services as with any
medical care need. Denial information is sent to the member and provider and the appeals process

is the same for both.

In your Request For Information, you asked whether plans currently provide out-of-network
coverage for mental health and substance use disorder benefits. For most health insurance plans,
out-of-network coverage is allowed when necessary. This provision is the same for behavioral
health/substance abuse needs and medical care needs.

Finally, comments were solicited about which aspects of the increased cost exemption, if any,
require additional guidance. Cost exemption is an essential safety clause. In the case of Medicaid,
jt will be essential to the states to be able to determine whether costs exceed the 2% of total medical
and behavioral health/substance abuse costs. Any added coverage mandate may result in additional
burden to already stressed budgets. The states will rely upon MCOs to demonstrate the costs

incurred to see if they meet exemption status.