-----Original Message----- 

From: Iris Schifeling [mailto:ischifel@independenthealth.com] 

Sent: Monday, May 24, 2010 4:37 PM 

To: EBSA, E-OHPSCA - EBSA 

Cc: Lawrence DiGiulio; Tonya Azzaretto 

Subject: MHPAEA Interim Final Rules 

Independent Health is a not-for-profit heath plan in Western New York 

which provides a variety of health products including HMO and PPO 

coverage. Independent Health has received national recognition for its 

customer service and its commitment to quality. 

Per my conversation with Heather Mitchell, I would like to express 

Independent Health's concern with the application of the formula for 

determining equity of financial requirements which is contained in the 

Interim Final Rules (IFR) to the Mental Health Parity and Addiction 

Equity Act. I realize that the final comment period is over, however, I 

would appreciate a review of our concerns. The portion of the IFR which 

only allows consideration of six broad classification when determining 

parity of financial requirements does not recognize the complexity of 

the health care services which a health plan can cover. The result is 

not parity but an "absurd" result just as noted in the comments to 

the IFR (II.2.a Fed Register page 5413) 

In particular the classification outpatient services covers a very 

broad range of services from a simple lab test to a complex ambulatory 

surgery. When health plans are designed there is generally an attempt 

to match the cost of the service to the financial requirement. There is 

also an attempt to keep the premiums affordable, which is balanced 

against the desire to make a wide array of benefits available. In this 

endeavor lab services usually have low or no financial requirements. 

Ambulatory surgery benefits usually have the highest financial 

requirements of outpatient services. Combining all these benefits in 

one calculation has resulted in some cases with having to eliminate any 

financial requirement for mental health and substance abuse services. 

In other cases plans are designed with both copayments and coinsurance 

for in-network outpatient services. The coinsurance generally applies 

to the ambulatory surgery benefits, while the copayments apply to 

office visits. This results in a more affordable product by making the 

financial requirements for ambulatory surgery reflect the cost of the 

procedures; while encouraging office visits by making the financial 

requirement for office visits a predictable flat sum. The regulatory 

formula in the IFR requires co-payments and coinsurance to be measured 

separately. This leads to the result that neither financial 

requirement can be considered predominant. Under the IFR if a financial 

requirement is not predominant it cannot be applied to mental health or 

substance abuse. Thus outpatient mental health and substance abuse 

apparently cannot have any financial requirement while medical surgical 

benefits continue to have financial requirements. Thus those persons 

who have need for medical and surgical benefits will be subsidizing the 

mental health benefits. 

It was suggested that this later problem could be solved by making all 

outpatient benefits subject to either co-payment or coinsurance. 

That suggestion does not take into account that these plans exist now 

in the market place and have current membership who are not expecting a 
major shift in benefits and/or rates. To make such a major change 

cannot be reasonably accomplished in the time given for implementation 

of the IFR requirements. The result of making such a change would be to 

phase out these existing products and develop and market entirely new 

ones in their place. All such new products would also need to be 

approved by the New York Department which cannot be expected to provide 

instant turn around. As it is, amendments will have to be filed for 

many products changing the mental health and substance abuse financial 

requirements. 

Independent Health is committed to complying with the law and we have 

no objection to mental health and substance abuse benefits being given 

parity with medical and surgical benefits. The application of the 

formula in the IFR however should not result in there being zero 

financial requirement for mental health and substance abuse benefits 

when medical and surgical benefits continue to carry financial 

requirements. 

We would like to see the IFR revised to have ambulatory surgery 

considered as a separate classification and to allow co-payments and 

coinsurance to be counted together to make the determination of whether 

financial requirements are predominant. Thank you for your attention. 

Iris B. Schifeling 

Senior Deputy Counsel 

Independent Health Association 

511 Farber Lakes Dr. 

Buffalo, New York 14221 

(716) 635-3718 (800) 247-1466 

 

Independent Health is the highest rated health plan in the nation for 

customer service according to NCQA's Quality Compass® 2009. 

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