In our earlier remarks, we noted the implications of plans that utilized alternatives to hospital and
other institutional-based 24-hour care. The cost implications are obvious but it should also be
noted that among all the research studies on alternatives to hospital-based acute care, there is no
case where the outcomes of hospitalization were more positive than alternative treatment.

Thank you for your attention to this matter and please let us know if we can provide you any
additional information.

Sincerely yours,
Betty Dahlquist

Betty Dahlquist, MSW, CPRP
Executive Director


guidelines and principals can be further reviewed at California Health and Safety Code section
1374.30.

4. Denial of Reimbursement or Paymen

Providing to the patient, and the health care practitioncr, the reasoning behind a denial of
reimbursement or payment is essential in protecting a patient’s right to treatment. In California
for example, throughout the California Health & Safety Code and Insurance Code, language is
utilized to mandate clear reasoning behind plan or insurer decision making. We would suggest
mimicking this language in federal regulation such as: [reimbursement or payment is denied by
the health care plan/insurer, the decision shail be in writing, and shall include a clear and
concise explanation of the reasons for the decision.

5. Out-of-Network Coverage:

Allowing the patient to receive services out-of-network is often necessary based on exigent
circumstances. Putting into regulation the following concepts protects the patient, while not
creating undue hardship on the health care plan or insurer:

e For continuity of care purposes, if the patient's plan/insurance changes, allow patient to
continue with their existing behavioral health care practitioner, provided that practitioner
is willing to accept the new health care plan/insurer’s rate of reimbursement;

* To assure timely access to care, if an in-network provider is not available to a patient
within a timely manner, the plan/insurer shall reimburse the out-of-network practitioner;

e To assure timely access to care, if an in-network provider is not available to a patient
within their geographic area within a limcely manner, the plan/insurer shall reimburse the
out-of-network practitioner;

e A definition of “timely access to care” needs to be developed and vetted by stakeholders
including mental health providers and consumers, as well as health care plans and
insurers; and,

e  Plan/insurer to reimburse for any reasonable costs associated with urgent care or
emergency services, or other extraordinary and compelling health care services, when the
patient’s decision to secure those services outside of the plan network was reasonable
under the urgent or emergency circumstances;

6. Cost Exemptions:

Model notices would be helpful in facilitating disclosure to agencies, enrollees and beneficiaries
regarding the plan or insurer’s election lo implement the cost excmption. In addition, regulation
should be adopted mandating that the plan or insurer notify the enrollees and beneficiaries before
they clect to take the cost exemption so that those directly affected by the exemption have the
ability to select other coverage that includes their given diagnoses. Additionally, regulation
should mandate strict enforcement of plan/insurer reapplication for cost-exemption so that
plans/insurers cannot continue with exemption without cause. Lastly, whatever evidence a
plan/insurer utilizes to support an application for exemption should be transparent to the
consumer so that advocacy groups may appeal or rebut a flawed application.


California Association of Social Rehabilitation Agencies

P.O. Box 388, 815 Marina Vista
Martinez, CA 94553
925-229-2300

www.casra.org

Re AMh.tearon ARNCIES

May 26, 2009

Department of Labor

Employee Benefits Security Administration
Room N-5653

200 Constitution Avenue, NW

Washington, DC 20210

RF: Paul Wellstone & Pete Domenici Mental Health Parity & Addiction Equality Act of
2008 (Public Law 110-343)

To Whom It May Concern:

On behalf of the California Association of Social Rehabilitation Agencies (CASRA), I want to
thank you for the opportunity to express our views about the Paul Wellstone & Pete Domenici
Mental Health Parity & Addiction Equality Act of 2008 (the “Act”}. CASRA is a state-wide
association of not-for-profit, community-based organizations dedicated to promoting and
strengthening community-oriented rehabilitation services that support recovery from the
disabling cffects of serious mental illness.

For over thirty years, CASRA member organizations have provided an array of community-
based, rehabilitation and recovery-oriented services to persons experiencing significant
behavioral health symptoms. Based upon the collective expericnce of our members, we offer the
following comments.

Our first ovcr-arching observation and concern is that the private insurance sector has severely
limited experience with services based upon psychosocial rehabilitation goals, values and
principles. Most private insurers only cover hospital-based acute care and traditional outpatient
services. If day services are allowed, thcy are not rehabilitation oriented but, rather, day
treatment programs focused exclusively on symptom alleviation. In order for services to be truly
equitable, insurers must expand coverage for an array of rehabilitation programs, including both
facility-based and in-home services.

Our second observation is that the private sector does not promote the use of alternatives to
hospitalization and other institutional 24-hour care settings. Specifically, crisis residential
treatment programs provide comparable, if not better, outcomes than hospital-based acute care,


at % to % the cost ($300 per day v. $1000 per day). ‘lhis is important in the context of
calculating cost excmptions. Benefit packages that utilize such alternatives will be significantly
less expensive than the traditional hospital-based benefit.

Tn addition the above general observations, CASRA has identified specific responses to the
request for information surrounding Public Law 110-343:

1. Treatment Limitation:

A, ___ Coverage of Mental Health Iness Diagnoses: Regulation must be ercated specifying
which diagnoses from the Diagnostic and Statistical Manual of Mental Disorders (“DSM”) will
be mandatorily covered under the Act. It is our interpretation of the Act that all diagnoscs under
the DSM will be covered. If this coverage is left open to interpretation, there will be extreme
disparity from plan to plan, as well as state to state. Consumers, enrollees, and employers must
be able to understand what mental health diagnoses will be part of their coverage.

Many state health care plans and insurers currently have “treatment limitations” based upon their
respective parity law, which officially mandates treatment of only ten diagnoses in the DSM.
Plans and insurers may reimburse for treatment above and beyond the statutorily mandated ten
diagnoses. The problem with this open ended ability of plans and insurers to cherry pick the
diagnoses which they cover is that the variance is immense and there is no consistency.
Consumers, enrollees, and employers are left to sclf-cducatc on the treatment limitations of their
coverage. Putting forward clear language in regulation as to which diagnoses fall under the
Act’s treatment limitations is absolutely necessary.

B. Utilization Review: Ilealth care plans and insurers have “utilization review” policics to
assess (reatment limitations on individual enrollees. Generally speaking, mental health and
substance use treatments are placed under heavier scrutiny than medical/surgical treatments.
Unfortunately, in practice, some insurers/plans will place a limit on the number of mental health
visits when none exist in the contract. Clear language must be included in regulation as to the
plan’s/insurer’s responsibility to adhere to the Act and not place treatment limitations on their
enrollees’ access to medically necessary mental health or substance abuse treatment.

2. Term Clarification:

A. Mental Health IIness and Substance Abuse Disorder: Regulation must clarify that the
purpose of the Act is to serve both those suffering from mental health illnesses and substance
abuse disorders. All three amendment sections: (a)-ERISA, (b)-Public Health Service Act, and

{c)-IRS Code at sub-section (3) state:

(3) Financial Requirements and Treatment Limitations.

(A) IN GENERAL—In the case of a group health plan (or health insurance
coverage offered in connection with such a plan) that provides both medical and
surgical benelits and mental health or substance use disorder benefits, such plan
or coverage shall ensure that—



(i) the financial requirements applicable to such mental health or substance use
disorder benefits arc no more restrictive than the predominant financial
requirements applied to substantially all medical and surgical benefits covered
by the plan (or coverage) and there are no separate cost sharing requirements
that are applicable only with respect to mental health or substance use disorder
benefits; and,

(ii) the treatment limitations applicable to such mental health or substance use
disorder benefits are no more restrictive than the predominant treatment
limitations applied to substantially all medical and surgical benefits covered by
the plan (or coverage) and there are no separate treatment limitations that are
applicable only with respect te mental health or substance use disorder benefits.

Although the legislative intent behind the bill is to serve both those suflering from mental illness
and substance abusc disorders, the way the language is currently written is open to interpretation
by health carc plans and insurers, as well as each individual state. Our recommendation is to
clarify, through regulation, that Public Law 110-343 is to cover both mental health illness and
substance abuse disorders, not either.

B. Preliminary Diagnosis: Through regulation, it must be clear that the initial mental health
provider's diagnosis, the preliminary diagnosis, stands until another mental health provider
declares otherwise. Plans and/or insurers routinely, and inappropriately, void the initial
provider’s preliminary diagnosis without provider input (knocking the patient out of parity
coverage.) Clarity needs to be given that the preliminary provider’s diagnosis stands until
another provider amends that diagnosis (not the plan or insurer.)

Cc. DSM-Scope of Mental IMness: Clarification within regulation that the entire DSM is
covered by the Act is essential. See prior discussion under “Treatment Limitation” heading.

3. Medical Necessity:

Currently, each plan and insurer ercates its own medical necessity criteria. For obvious reasons
this creates a lack of consistency, as well as a lack of clarity. It is imperative that there be a
federal model put forward defining “medical necessity” so that the provider, the enrollee, and the
consumer can all comprehend whether “medical necessity” applies to their mental health or
substance abuse situation. In putting forward a model, it is crucial that the definition be created
and vetted by all stakeholders, including mental health providers and consumers in addition to
health care plans and insurers.

Moreover, medical necessity criteria is not generally made readily available to the enrollee, but
only to the providers. Putting forth regulation encouraging transparency as to medical necessity
critcria would be bencficial to the enrollee and consumer.

Tastly, creating an independent medical review system (“IMRS”) to evaluate contested denials
of treatment based on “medical necessity” would protect the patient from inappropriate or
unlawful plan or insurer denials of coverage based on medical necessity. Sample IMRS