Defending Lilltir~y 

------- Pursuing just icc 

Office of Health Plan Standards and Compliarlcc Assistance 

Ernpluyet. Bencfirs Srcurily Administratinn, Room N-5h53 

U.S . Dcpartmcot of I-ahor 

Atterlfion: RIN 1210-A830 

200 Constitution Avenue, N.W. 

Washington, DC 202 10 

Clc~itcrs for Medicare BL Med~caid Services 

U.S. Department of Health and Human Services 

Arbenrion: CMS-4140-IFC 

P.0. Box 80 I6 

Baltimore. MTI 21244-1X50 

CC:PA:LPD:PR (REG- 120692-091, room 5205 

Internal Revenue Service 

P.O. hux 7603 

Ren Franklin Station 

Washington. UC 20043 

Re: Interim Final Rules under the Paul Wellslone and Pele Dumeniri Menhl Health Parity 

and Adrlic tion Equity Act of' 211OH 

Dear Secretary Solis, Secretary Sebelius, and Curnmissivnrr Shulrnan: 

On bchalf 01 lhc Ar~lerica~l Rar Associatioil (ABA) and its more tI1a11400,000 members, 1 am pleased 

tr, submit our enclosed Comments in response to the Departments' Interim F~nal Rules request for 

additional comments (Interim Final Rules, 75 Fed. Reg. 54 10) published on Februaty 2, 201 0, and in 

response to the Departments' rrqtrrst Trir sddilion;il commrrits as prcscntcd cluririg thc Dcpar~rncrics' 

January 29. 2010 co~istituc~lcy br irfing on rhe Interim Final Rules. 

Thank you for considering our view on this important subject. 

H. Kobert Fiebach 

Chair. ABA Standing Cornrniltcc on Substancc Ahusc 

cc: Thomas Susman, Director. ABA Governmental AfFiiirs 0TTic.c. 

Lilliari Gaskin, Senior- Legislative Counsel, ABA Gove~nmental Affairs Office 

Jared Hess, Legislative Assistant, ABA Governmental Affairs Office 
ABA Standinp Committee on Substance Abuse Response tn Departments' Interim 

Final Rules Request fur Additional Comments re: MHPAEA Irnplerne~ltation 

In thc lnteriin Final Rules issued hy thc Dzpart~nent of the Treasury, Departmc~lt of 

Labor and Department of Health and Hutnan Services (the Dcpartmcnts) 011 Jaiiualy 29, 

20 1 0 ar~d published in the Federal Regisier on Fcbn~ary 2, 201 0 (tlie regulations), the 

Tlepart men ts invited coinrncnts on whether and to what extent MHPAEA addresses the 

scope oS scrviccs or cnntinuurn of care provided by a group health ])Ian or health 

insul-ai~ce coverage. 75 Fzd. Reg. 54 17. 'I'he Departments also invited commenls on 

additional esarnplcs that may be helpful to illustrate the application of thc nonquaiititative 

Ireatmcrlt I irtiitat~on rille to other features of medical rnar~agernent or geiiernt p Ian design. 

75 Fed. Reg. 5416. 

In addition, during the Departments' Jruluary 29, 201 0 tclcptloi~ic constituency group 

briefing on the regulations, the Departn~cnts requested additional comments regarding Blc 

issue of adequacy of provider networks. The issues of state law preemption alld 

~mccrtainry aver the applicability of the regulaljons to Medicaid managed care 

01-gan izations were also prescr~rcd, and me comniented on herein. 

Comment 1 : Continuum nf Carelscope of Services 

A. I .eve1 of Care Exclusions u~der the NlHISUD Benefit are Tmper~~~issible u~ldcr 

MHPAEA and the Kep~ilations. 

1. Statutory and Regul-atorv Background 

EKTS A 57 1 ?(a) [24 USC 1 185a (3)(A){ii) and (B)(ii) and (iii) were addcd to rcquire that 

in the case ol'a group health plan (or health insurance cuvcragc offered in cont~ection 

with sirch a plan) that provides both mcdical allif s~~rgical bellefits and mental health or 

suhstauce use disorder bcrlcfits, the treatii~ent limitations applicable lo mcntal hen1111 or 

substance irsc disorder bellefits arc no more restrictive th(rt~ tllc predonlinaiit treatment 

lirrlitatio~~s applied to substanti;illq' all mcdical and surgical bellefits covered by the plan, 

and that here are no sep~wltre li-~litr~etit Ei~tzitr~ti~r~s thaf arc clpplic~rble wl(v with respect 

ID nrcn tul health up. substar~re list disorder bencfirs. A Ircatmcnt limitation is considered 

to bc predamitiant if it is the mvsl cunlmorl or fi-equeilt of such type of limit. "Thc tcrm 

'treatment limilatior~' ir~cludes limits on the frequency of Ircatmcrit, ~~un~ber of visits, 

days of colverage, or arhcr similar Ii~~lits on rhe scop~ or ciuration of treatmenf." 

(Emphasis supplied.) 

I'he preamble to the Inrerim Final Rules (hereillafter referred to as "the regulations") 

pruvidcs: "These reelations specify, in psragraph (c)(Z)jii j, six classificatjons of 

benefits: inpatjenl, in-nctwork; ii-rpatient, out-of-network; ui~tp~~tient in-network; 

uutpatiet~t nut-of-network; emergutlcy care; atid prescription drugs.. . .Thcsc rcgu latioils 

providc [hat the parity requirements for financial rcqui renlents and treatment limitations 

are generally applicd on a classif cation-by-cIassifica1i011 basis and these are the only 

classificatiol~s used for purpuscs of satiqfj4ng the parity requiremcrlts of the Act." 75 Fed. 

Reg. 541 3. 'The preainble also states thitl: "Thc P)epa~.ltments recognize that no1 all 

Page 1 or17 
treatments or Lreatnlcrlt settings for mental heal111 cunditions or substance use disorders 

correspond to those for medi calisurgical beneiits. l'tle L)epartmz,tts also recognize that 

MkIPAEA prohibits plans and issucrs from inlposing treatmen1 limilations on n~etltal 

health ;mcl substaincc use disnrder benefits thal are IHCITC restrictive than those applied to 

mcd~calfsurgical hensfits." 75 Fed. Rcg. 541(;. 

2. (a) Recummendstion 

The Departments' implementing regulations should specify that group health plans 

are required to cover under tllc MHlSUD benefit, all levels alld typcs of 

rnedicaVsrlrgica1 care covered for substan tially all mcdicallsurgical benefits (i.e., 

continuum of care) that are largely analogous under the hIII/SUD benefit. 'I'hus, 

exclusiuns of levels of care or services along the contir~uunl of care, such as inpatient 

rehabilitation and/or residential treatment andlor partial hospifalixalion andlor 

intensive outpatient services, under the MHlSUD benefit, where thcrc are no such 

exclusions of analogous le\.eIs of care along the corltinllum of care under the 

n~edicallsurgicnl benefit, should constitute a violation of MHPAEA's "tlo more 

~~estrictive'' standard and "separate treatment limitation" prohibition. Croup 

health plans 5hould be required to cover a scope of serviccs and continuum uf care 

r~rldcr the MHISUD benefit that is largely comparable to the scope of services and 

continuum 01 care provided for substantially ail of the rnedical/surgical benefits 

under that group plan. 

Pla111ls should he permitted to either: 1) crcatc 3 new classification of benefi ts in ordcr 

tbr those benefits to fdl ou~sidc the ambit of MHPAEA; or 2) exclude clinically 

recognized 1icenst.d 1cr;cls of cave from the MI VSUD beneiit bascd 011 the p Ian's 

delt.nnina~iori that s~lch level of care does nut Sall wittiin one of the six classifica~iuns; or 

3) not cokTer a level of care under ttlc MH/SUD benefit using the juslificatiorl that there is 

110 directly correspunding medicailsm-gcal het~efit. If a plan is offcring 011ly one or two 

types ul'scr\,icc or levels of care in each MHlSUD classificat~on, while offering many 

M~I thin each medic a1,'surgical classi licat ion, the plan is applying a ~rt.a(mcnt 1 imita~ion to 

the MIIiSUD bencli t that is more restrictive than the predominant treatment linii tation 

applicd to substai~tiall y all rnedical/surgical bcncfits in the same classj fication. The plan 

is also applying separalt. Ircatnlcnt ljlnitatiolls applicable only tu lhc MWSUI) benefit. In 

these cases, thc plan has violated the requiremenls ufboth MHPAEA (also referred to 

horcin as "the Act") and the reg~~lallor~s. 

As lhe Depnrtr-r~ents have recognized, no1 all Ircat rncrlt services arid settings for MK:S UD 

beliefits will correspond lo thosc for rnedicalls~irgical benefits. Mental hcalth and 

substance us2 disorders are often conlplcx a~id chronic, featuring medical, psychological, 

beha~lural and social di~~letlsions, rather ~han strictly med~cal. The Departments havc also 

recognized that the pIain language of MHPAEA prohibits lrcatrnent l inlitations under 

MHiSUD benefits that are more rcstriclivc tha~~ the predominant trealnlent limjtations 

applied to subslantially all n~edical/ surgical bcnefils. In add jtrcri~, the regulations requjrc 

that whell a plan "provides [MHiSUD] betiefits it3 anv classiii'lcalion of benefits" 

described in lhc n~lc, MH/SI JD benefits "rnusl bc pruv~ded ill everv classificat ion in 

Page 2 of 17 
which m~dical~surgical benefits are providvd," 75 Fed. Reg. 54 13. While this slalemc~it 

clcwly req~riits parity across ~Iassificatiorls in the scope of services that art: rlffcrcd for 

particular conditions, thc Act atid the regulatio~~s taken as a whulc, clcarly require parity 

~vilbill c~lassifllcatiol~s awell. 

There have bccn historical group health plan exclusior~s of certain levels of care under (he 

MHISUI) hsnefir design. Since Lhe clTcctive date of MHPAEA, many group hcalth plans 

continue to excludc lrorn caverage entire levels of care lhat arc clinically recogni~rd and 

slak liccnscd, while ccwering what is viewed by many state licensing hoards as 

analogous clii~ical ty recognized lev cls of care under the medicallsurgical bendit. Bccause 

bat11 the Act and lhc: rcg~~lations make clear that the six classificatiurls of benefits are the 

only classifications to he used, and also make clcar that MHYAEA pinhihits treatment 

lj~~~jtatjcrr~s uiider the MHI'SUD bencfit that are inore restr-ictive than imder the 

i~ieJical/surgical benclit, it rlccessaril y fo 1 lotvs that all MH/SUD urzd nr t?niral/'stirgicul 

str vices ull d 1ev~I.r of care musifjf into une uythese sir :rL.ursifications. Moving certain 

sei-vices or lerrls of care outsidu thc six classeq to avoid the requiremenls ol' parity wolr Id 

be a cltu violation of C'oi~gressional intent. 

Tn illustrak the humm consequences of liow this discriminalory plan Jcsjgrl 1s affecting 

tuday's bchav i 01 a1 health marlcetplace, a member obtaining SUU treatment may typically 

be adniitted to dctoxificaiion lcvel of carc, followed by iiltensive inpatient rehabilitat~or~ 

and moniioring, lbllowcd by r4esidei~tia1 treatment, follosved by day trcatment/partial 

hospitaliza~ion, follnn ed by intensive outpalien[ trcatrllcr~t, followed by outpatient 

coui~seling or group ~hcrapy. -Many plans restrict access to MIIlSUD care bs r,rdudir#g 

one or morc oft Ire rehabilitation and:or residential andlor partial hospita!i7ation andlor 

~titeilsive outpatient levels of care. Fox cxample, ail it~sured patient admitted into 

detoxi ficalion niay rcceive authorization for 4 days of treatment at tbat level of care, 

Iollowed by authoi-i7ation for 6 days of intcnsivc inpatient rehabilitation. Tl~ei-eafter, the 

patient's residential treatrncnt, folln~~ed by partial hospitalization/day treahncnt would be 

denied as "intcrnlcdlatc" care not cclvered under MHISUD bcncii t. 'l'he patie~t is thereby 

rclcgatcd to a strictly nutpatient setting for lht: ru[tia~f~dcr of hidher treatlment, regardless 

of 11iedic;ll necessity. In culrtrust, a member under the same plat1 may obtain 

medicallsurgical scrl~i ccs th~t span the full continuum from admission to inpatiell t 

silt-gcry, followed hy intensive c;ue in a monitoring unit, followed hy continued 

hnspi talization in a gencral pati cnt room, followed by rehabilitative thcrap y in a ski I led 

nursing Iacility, follo\ved by outpatient rehabilj~al~on and therapy, without facing such 

treatillent limitations. 

Abscnt equitable coverage across the Itull cor~tinuuln of care, albeit with apprupriatc 

urilization managernen1 protocols, parity is not being realized, This is clcarly not what 

Congrcss intended when it sought to remedy thc discrimination that has existed under 

many golip hcalth plans with respect to MI1 S CrD benclits. The Act clear1 y provides thal 

there be "no separate ea(mcnt liini tations that are applicable only with rcspec t to n~ental 

Iicalth or. substance use disorder benefils." The statute aiso defines the term 'lrcatmcnt 

limitation' lo iliclude "other similar limits on thc: sc.opc or duration of treatment." Thl: 

exclusion of licensed lcvcls of care along the continuum of care oti the M HiSIJD side, 

where a~ialogous 1evels of care arc covcrcd on the n~edical!surgical side, constit~~tes a 
more restrictive li~rijt on the scope and duration of tr-catmeilt and a separate treatnlcr~t 

limitatiorl that violates the parity requirements of the Act. 

2. (b) Recommend;nlion 

The Department's implemta ting regulations should clarify that, in cascs where 

there is arguably no analogue between a MITlSUD treatment service or level of care 

and treatment services or levels for other covcrcd medicaL/surgical conditions, a 

group health plan may not refusc to cnver a hlH/SUD service or lcvel of care 

because there is no medicallsurgical analogue, unless the plan also refuses to cover a 

nledicaVsu~.gical service or level of care hecnuse there is no MHJSUD analogue. 

Otherwise, the exclusion of a lcvel of care or trealment service under the MIIJSUD 

benefit would be dccrned a violatiun of MlIPAEA's "no more restrictive" standard 

and "scparate treatment limitation" prohibition. 

3. (b) Rationale 

Grulrp heal~h plans may justify the exclirsivn uClcvels of care hn? the MH!'SUD bcncfit 

by stating that there is no cul-respondjng medical~surgicalevel of carc, and therefore such 

tl-eati~ient servic,es arc not required to he covered ~111der MHPMA. A plan that refuses to 

cover a MHlSUU sewice or level of care becausc there is no medicaltsurgical analogac, 

on its face limits rile scope or drrration of balefits for treatment under a plati. l'l~us, such 

a decision is a noncluailtitative treatnier~t limitation (NQTLj sub*jcct to the "comparable" 

and "no morc stringei~t" standards set furth in thc regulations. As stated in the 

regulations: 

"Any processes. stralzgus, cvidentiary standards, or other hclors used in 

applying lhc nunquantitative treatment limitation to mental health or 

subsrm~ce use disorder bentfils in a classification must be comparable cu, 

and applied no morc stringeiltly than, the processes, stratcgics, evidentiary 

standards, or othel- factors used in applying tl~c limitatioii with respect 10 

~ncd lcal su~gi cal!benefils in thc classification ." 75 Fed Reg. 541 6. 

Thc regulaliorls require NQTLs to be "comp~ablc." A treatment lini tation that prohi bits 

covcrage for MH!STJD treatments that have no medicnl:'surg~cal analogue, but does not 

pahihi t coverage iilr 1ncdica1:surgicaI services that have nu MH;S UL) a~ialopue, is not 

comparable on its face. Tf group health plans do not apply this treatment limi~aliorl 

co~tlpal-al~lg, the plan wu~rlrl bc irl violation of the regulations. Morcovcr, the treatment 

limitations scc t ion of MHP AEA stat tes that heall11 plans nlust ensure that "there art? no 

scparate treatment limitations lhal arc applicable only with respecl lo mcntal healtll nr 

suhsrauce use disordcr benefits." A plan that ref~rses lo covcr a MH/SI;rD service that 

has no ailalogue in medicaUsurgica1, but does not apply a similar standard to 

~nedicalisur~ical benefits, violates the parity rcqujreme~~ts ofthe Act becausc it in~poses a 

sepal-ate treatment lirnirntion "applical3le only will1 rcspcct to" MH:'SlrD benefi~s. 
B. Treatment Setting/Facility Tvae Exclusions Constitute Impermissible Limitation 

on Scopc of Services a~id Jmpermissiblc NQTL 

1. Statu torv and Regulatory Background 

ERISA $712(a) 129 L'SC 1 1 85a] (3)(A)(ii j mJ (B)(ii) and (iii) were added ro require that 

in he casc of a group health plan (or 11calth ii)surai~ce coverage olli-rcd in connection 

with sucli a plan) that provides both nledical and surgical benefits and mental health or 

substance use disorcies hei)ef ts, the treatmcrlt Iirnltations applicable lo mcrltal t1ealtl-1 or 

substance use disorder bynefits arc no more restrictive lhan thc predoni inan t treatmen! 

limitations applicd to substantially all medical and surgical benefits covered by thc plan, 

and tlut there are 1at1 separczte tretrlment Eimitarrrlons that arc crpplior4ble otriy wirh rcspcci 

rrl nac~ital dacaJ/J~ 01. suhsmwre use clisor~ic?~. bcnejils. A treattnei~t limitation is c.onsidcrcd 

10 be prcdvrnina~~t if it is the masl ctlmniurl or frequent of such type 01 limit. "The tenn 

'trea t~i~ent limitation' ~ncludcs limj ts oil rhe frequency of trcatnlent, number of visirs, 

days of coverage, ur ofller similir~. limits otz the scup or ritcr- tion on of tr'cntj>tnrt." 

(Emphasis s11pyl l i ed.) 

The przatnblc to the regulations states that: "Thc llepartments recognize that riot all 

trcattnents or. rrcafnaenl settings lor mental health condj tions or substance use disorders 

correspond to ~hosc for medicaI/surgjcal bznelits. Thc L)epartinents also recoLni~e that 

MHPAEA prohibits plalls md issuers from iniposil~g treatment limitations on n-tental 

health and substance usc disoider henefi ts that are more rcstrictive than those applied lo 

medicallsurgical benefits." 75 Fed. Reg. 53 16. (Emphasis supplied). 

The Departmeuts' implementing regulations should require that group health plans 

recogniae and include as covered healthcare providers under the MHlSUD benefit, 

appropriately state licensed non-hospital facilities, such as freestanding psychiatric 

arid sabstnnce abuse treatmert facilities ond freestanding residential treatment 

centers, which are aniquely appropriate lo provide treatment services under the 

MHISUD bcnefit. 

3. Rationale 

With [he evolution of MH/SUD trealment, standard clinical treatmen[ rrlodalities and 

trvatment settings have changcd dramatically from early days. As nored in a 2009 Heallh 

Affairs issue, thc: Prcside~~r of CIGNA Health Solutions stated that a major challenge for 

hua It11 plarls in implemen~ing mcnt a1 health parity and addiction equity is the eliminalio~l 

of "any vestiges 01-str-uctural differences beiw~v~l coverage of h1WSUD Irralrncnt 

berietits and benefits fur gulcral rnedical care." ' Decaclcs ago, those suffering frum 

MHlSUD's were placed in psychialric wards nf hospitals, oflen in lock-down, or in 

detoxification beds ir~ hospitals. Much has changcd regarding the medical corr~rnu~~ity's 

cli111cal understanding of such disorders, and along with knowledge, trearment sellirlgs 

' Keith L)~son, "Trnplcn~ruting Mz~~tal Ilealrh T1arily: Thr Clrallenge For 1 lealth Plans", Health :\ tfairs, 

28{:z):bh.<(May-Juri 2009). 

Page 5 or17 
and pi-ogams have ch:~nged as ucll. As of 2007, in the Unitcd States more than 13,000 

substance abuse Ireaimcrit facilities provide medicalion, counseling, behavioral therapy. 

case managcrrlcrlt, and nthrr types of serviccs to persons with substance usc disurder~.~ 

Of these over 13,000 facilitics, merely 1.000 were hospilal-bas& treatment providers.3 

Eadl state has its own substance abuse licensing agency, with a codified regulatory 

licer~sure scheme lo cnsure clinical quality standards of treatment facilities and llic Icvels 

of cart: and servjces they are licensed to provide.J hi addition. just as with hospitals on the 

nrcdical!'surgical side, MHISUD frcestai1rlii7g treatment facililies [nay also be Joint 

rommission accrcditcd to demonstrate compliance wit11 national accreditation standards. 

Such starc licellsed freestanding treatmcnt facilities, rather than general hospitals, are the 

far more typical and avuiiublr inpatient treatment setting fur thc psuvisio~ of MHISUD 

treatment swviccs, These freestanding trealment hcilities are specifically licensed lo 

provide the appropriate levels orcarc along the continuum of care fur MH/SUL> 

treatment, inchding n~cdical detos ification, in tensitc inpatiellt rehabilitation. residential 

Ircatmcrlt, partial I~ospi talization and intcusive outpatient care. Thus, jre~slrlttdinfi 

.ruh.utancc lrhtrsc tre~rtmen~ Jircilities thnr urtl properly licmcwsed for ec~ck level c$cwrc fl~cj, 

provirlc. irre she eqzfivcnlrri, ufproper(~ (ieeizserl Iiuspita1.s on the rncdirnl/surgi~w/ side. 

The 2010 Govcrr~nicnt Employees Health Asbociation: Lnc. (GFHA) Benefit Plan ~mdcr 

lhc Fcderal Employees T Ieal~h Bend) ts (FEtiB) Program is high1 y jnstructivc on this 

point. Tn compliance with MHPAF4, the 2010 CEHA FEHB Plan made changes to its 

benetil plan design, specifically providing that: "Admissions to out-of-network 

..S Rcsidenti a1 Treatment Centers arc now covel-ed subject to niedical ncccssity review. 

This is cortsister~t w~tll the added provisiorl thal: "Liccnsed Professional Counselurs.. .are 

now covered providers when serviccs are perfonxed within the scopc of their 1 ica~se."" 

With respect to more intcrlsjve i~~~)atiet~t levels of care, thc 2U10 GFHA FEHB plan also 

defines Huspital to inrlucl~ duly licensed kcstanding substance abuse facilitics that meet 

clirlical staffing and cli~licaI serviccs rsquisi te~.~ 

fIistorica1 incquities in benefit design incl~~dc, t~lost markedly, the exc\usiar~ of 

lkccstarlding adult and adolescent substance ahuse treatment facilitics, freestanding 

residential treatment facilities wd freestanding adulcsce~lt psychiatric treatment hcilities 

' SAMHSA 2007 National Survey of Substance Abuse: Treatmcn; Scrvices (N- SSiVL'S): available at: 

httv:i:~\r\rw.oas.samhsa.gn~~~nts3k7,Sl'Sih Scc also, Natio~lal instlh~te on Dn~g Abusc, 

Pril~clples of Drug Adriictio~i Treati~iei~t: A Research Tlascd Guide, Second Ed1~1ot1 (2008) available at: 

~~ttp:i~tvww.dru~ah~1s~~~ov!PODAT~Tre;1tmen~~S html. 

Table 2.J of SAhlHSA 2007 Nat~onal St~rvey of Suhstancc Abuse Treatment Serr-lcrs (K-SSATS), 

a>-ailable at, http:iiw~p.t~as.saml1sa,g~~~/11~~~~~2ki~NSSATS2k7TbL2,3.I~t1n. ' See SA.1MlISA 's nircclu~y of State Substance Ab~is? .4gcncles: available st. 

~~!~find~culrrim1.~s~.n111sa.eov!uftrs. ' 20 10 Covernillent Lmployees Hcallh .4ssvciatin11, Inc. I~l!llU Plan, Sccliou 2: p. 9. 

id. 

Id at Srcr~nn 3, p. 12, definition of "Ilosp~ral" includuu: "(3) An institution which is 0pcruit.d gilrsmnt to 

13~~. IIII~UI. I~C supervision of' a staff of doctors urid rvjth 24 hours a day nursing scrvice and w-l~ich pmv~des 

serviccs uri the p~r:dses tar the diagnosis, irratrrlent, and care of persons wl~h rrwntalislibstance abuse 

tii..;t,rdcr s and 111s fbr each patient a \wiltell treatm211t plan which must indude diagnostic assersmcnt o C 1t1e 

ptltirr~t and a descrlptlon of thc rrcalrrleot to be rendered and provides Cor follohb-up assrssmcnts by or 

under the direction of tlic supurvisi~lg doctor " 

Page 6 of 17 
[born cwcrage under a plan's MH/SUD bcoefit.' Many plans conlinrle to rcstrid 

MH/S UU benefits to services reltdcrcd only by hospitals or facilities affi Iiated wi tll 

l~ospi tals. As a resull, niany group health plans do nu1 includc appropriately licensed rmd 

accrccl~tcd fi-eestaildii~g treatment fdcilitics in their definition of "hospikd" or "qualified 

trearinent facility." Oih~r plans expl-essl y exclude freeslandir~g psychiatric and substance 

abuse lrealn~cnt facilities at~dor freestanding rcsidcntial faci lilies from the scope of 

coverage, notwithstanding appropriate state licens~ire andlor national accr+editation. For 

example, unc of the largest ~iational employer goup plans containing both inpatient arid 

ourpatient medicallsurgical mJ MH!SUU benefits, effective January 1, 201 0 provides: 

"Treatment receivrd at a freestanding residenrial substance abusc treatmer~t center or at a 

freestanding psyc tliatric residential trealmenl Sac~lj ty is not a covered benefit." This 

~tleqi~ity in health plan benefit desigi dcprives participaiits and beneficiaries of thc ability 

to access covered lrealrncnt tiom the very heal theare providers lhal spccialize in and me 

specilicallql licensed to vender those services that mctnbcr- requires. 

Not on1 y does 111c exclusion of properly licensed faciliiles ibm the scope of coverage 

under the MHiS I!D benefit conslitiilc a trcatrneilt 1 imitation applicable to MH/SUD 

benefits that is rnorc: restrictive tha~ the predominant treatment limitations applied to 

sc~bslarltially all medicnl/'surgical bentfils covercd by the plan, as well as a separate 

treatment: limitation npplicablc only with respect to hII4,SUD benefi~s. il also corlstitutes 

a prerzulhvri~alio~~ dctcrn~ination hased 011 the settillg in which the care is provided, rather 

than whether or not the service is medically Ilcccssary. Parity cannot be achieved j f [he 

implsn~enting regulalions do not prohibit this t-vpe of treatment lirnilalion on thc scope of 

servlccs. Without cjnsing this signifjcanl loophcllc in plan benefit design, plan 

partici1.1ants are lefl wi lh a ~rcmcndous obstacle in accessing their MHlSUD bcnclits. 

A. The Need for Consistent Processes, Strategies and Evidentiary Standards in 

3ledical Management 

1. Statutory and Rcpulotwy Background 

ERIS.4 $712(a) [29 CISC' 1 185a] (3)(A)(ii) and (B)(ii) and (~ii) were added to require that 

in the case of a group heallh plan (or hcal th insurance coverage offered in cwnnection 

1t.i th such a plan) that provides both medical and surgical benecks and nlcntal health or 

substance use disorder benefits, the (reatmcnt l i mitations applicahl e to mental health or 

substance use disorder br.ncfits are no more restrictive than the preduminant trcatmerit 

limitatiotls applied to sul~stantially all medical and surgical benefits covered by the plan, 

and that there are PIO scpnrlrte trriilment /irr/itiztiorrs thut rat.C applicable onh wilh rrqlecr 

ro t~letitul helrl~h ur v~,tbcrr~~ice ttse riisortlcr bcnejrs. A lroa tmcrlt limitation is considered 

to be predomin~n~ if il is thc most common or frequent of such lypc of' lirrlit. L'?'lie tern 

'treatment limitation' includes lin~ils 011 the frequency of treatment, number uf visits, 

days ul'covcrage, or orirer si~tltlar I~nrrts on the scmupe or rlr~rrr~iot~ of t~~att?tc~r.'' 

(Cniphasis suppliccl . ) 

' SAMHSA's ru'ational Expenditures for Mcn~al Henlth Se~vices and Substance Ahi1.i~ Trcaimenl publislled 

it1 20O?shed l~ght on the lack af acccvs lo hese treatmeid settings. 

Page 7 of 17 
The regulatiot~s slate that: "A group health plan rnay [lot impose a nonquantitrztive 

Lrealrncnt Limitation with respect to mental hen lt t~ or substance use disordcr bcnefi ts in 

ally classification unless, undcr he tenns of the pIan as wrillcn and in operation, any 

processes, stratcgies, evidentiary standards, or othct factors used in applying (he 

nonquanti tati, e treatment limilatior~. to mental health or substmct: ~~sc disorder benefj ts in 

the classificsriun arc cornparah le to, and are applied no morc stringently than, the 

proccsscs, strategies, evidentiary standards, ur other factors used in applying Ihc 

limitation with respt.c.1 to mcdical!su~gical benefits in the classification, except to the 

exLen1 that recognized clinically apprvpriale standards nf care n-lay permit a di fkrencc." 

75 Fed. Reg. 5336. The rcgulatjotls i l l ustrate tl~at: **,Vot~quantitilrive ir-eatmewc Einzitatzons 

zndlrike - lzi) Medirol r~~u~lngcmcnt standuriis Iitjri(i~lg or ~xrlzcrhng hencjts based u?l 

rlr~cliral iiacessify OP m~ilid rrl upproprint~nco.. . " 75 Fed. Reg. 5436. (Ernphasls 

supplied). Thc rcg~~lstions hrtller state explicitly that thc no more stringently standard 

rvas "included to ensure that any prucesscs, strategies, etidaitiary standards, or othcr 

factors that are conlparablc on tlmr face are applied in the smme manncr to 

medical/surgical and to hTH!SUD benefits." 75 Fed. Rcg. 541 b. 

2. Recommendation 

'I'he Departments' implementing regulations should require group health pians to 

use consistent praccsscs, strategies and evidentiary standards by which medical 

uecessity criteria are to be utilted and applied for both medicaYsurgica1 treatment 

services and MH/SUD serviccs alike. 

Agencies within the Departl~le~rt ofHealth on d Human Services, private health 

plaos, lhe American Soricty of Addiction Medicine, and the Substance Abuse and 

Meutal Health Services Administratio11 (SAMSHA) funded and participated in the 

development of an ew idence-based managed care approach to providing the 

appropriate level of services across the co11tilluu111 of care. In the SUD area, this 

continuum uf care is represented by the Patient Placement Criteria of the American 

Society of Addiction Medicine ASAM AM").^ These critcl-in. initially published in 

1991, provide a nationally recognized standard, using curnmon language, for 

appropriate plac~mcnt of individuals within the contitiuum of care for treatment uf 

SUDS. Such a nationally recognixed standard utilized in the implementation of 

parity, would result in far greater consistency in the processes, strategies and 

evidentiary standards used in applying medical maaagemcnt standards that limit or 

exclude benefits based oti medical necessity or medical appropriateness. 

Medics[ neccssity detern~inations are a critical aspect oScstahlislUng equity and parity 

between medica1:surgical and MH/S UD beiiefi ts. l Jnder the MI-I/SUD bcnciit, 

deternlinatju~~s are made in the context of specilic Icveis of care along the continuum oS 

care. One of the most diSlic111t and frustrating aspects of MH/SUD n~eclical ilecessjty 

9 A~l~rriccl~~ Society of' Addrction Medicinr Paliuri~ Placernr~lt Criteria tor the 'Creatmcnt or Substat~ceRzlatcd Disorders (2nd rd~l~nn) ASAM PPC-2 (1996), ASAM PPC'-211 (200 1). 

Pagc 8 of 17 
dctcrrtlinations is tlis fact thal the dcfiniriotls of ternls and the various djrr~crlsions Illat are 

co~~sidered as part of a dctcnnjnation vary widely across health plarls a~~ri en~ployer 

groups. A critical issue for the implementing rcgulatiol~s to pl-ovide guidance on is thc 

need for pt ans to have arl qui table and consisrent process as to he rrlcdical crir eri a used 

under rhz tx~cdical,'surgical and MHlSUD b~n~fit alikc. 

45 MH!SUD pruvidurs continlie to be faced with a n?ulli(udc of widely varied rnedical 

necessily critcri'~ both within and among plans, Ihc opportunity for the Departments lo 

pro\ide guidance as to consislency in the context of MHPAEA implementation is both 

highly approprialc and timely. Of note are the observatiorls made in the SAMHSA 

sponsored Special Report on Medical Ncccssity in Piivate Health Plans: Tmpl~cations for 

Bel~avioral Health Carc ("SAMHSA Special ~e~ort").'"ht: Spccial Keport provides an 

exhaustive ~eview of research findings and casc law as well as state and federal laws 

pertaining to medical ~~cccssi ty reviews and determinations. In [he Executive Sunirnary, 

thc authors note that: "Ratl~er than turning simply on whether a proposed treatment meek 

pro tessional medical standards, tllc prevailing defii~i ton of nledical necess~l y is broad1 y 

framed, m ~~l~idimcnsioual, and cnr>trolled by the insurer, not thc treating professional."' ' 

The SAMILSiZ Special Rcport suggests that a major challenge in rrlaking medical 

nevessily dctcnnin~~tions for MH/SUD services, conlparcd to ~nedicalisurpical services, is 

all uriderlying debate among hcalth plans and review organizations as to whethcr 

"medical ncccssl t y" is the appropriate term, or, whelhcr "clinical appl-oopr.iateness" is a 

tnore accurate term for evaluating scrviccs under the MHlSUD benefit. This is becausc 

medicid nzcessily rcv~cas tbr MHjSTJD benefits focus less on Lhc clinical services to be 

rcl~dcrcd and nlore on at1 assessment of "whal levcl of services in whicl-I settings are most 

cliuically appropriate for a gjt cn paticnt it1 light of his or her clinical social needs."r2 

Thus. medical necessity dete~mit~ations of MHI'SUD services ol'tcn lbcus on the "foi-171 

and manner" of treatment, mther than on whothur treatment sei~ices will be provided. 

Tl~c SAklSHA Special Report also noles thal in "bchnvioral health. uidike general 

medicine, most inpatient admissions are uriplani7ed and occur becausc a person (or family 

rnernbcr or provider on behalf of that person) seeks cmcrgcncy cr~sis admission.'' 

Althnugl~ these types of servic,us may bc approved initially. disputes about the rnrd~cal 

necessity 01 subsequent services are cornmot1 and are relattd to thc rcview criteria which 

arc considered the "guideposts" usr.d by utilization review staff. Nationally recognixcd 

criteria, such as Ihe ASAM Patient Placeinent Criteria, would providc opcrarional 

consistcrlcy In medical ina~~agement processes, ~tr~~tcgics and evidentiary standards thal 

limit or exclude benefits bascd on medical al~prnpriateness. 

'" Rusenbwm, S., Kamore, 11 , Maiiery, D.R. I'i'aliit, B. Medical hccessity in Pnvatc Hcallh Plu11~ 

~~~~lications for Belnvioral Heal111 (7~, Subst~llce Abuse and .Mental Health Scr\.icc.s Adrllinisti-ation 

(ShhlHSA) LlllllS Pub. Lo. (SMA) Q3-3790 (Nov. ?OO3). 

I' Itl. 

I,/. Bf 14. 

" Id at 15. 

Page 9 of 17 
B, The Need For Clear Definition uf "Recoo,nized" C:linically Appropriate Standard 

1. K~~ulatory Bnckpround 

The rugulations state that: "A group health plarl may not impose a not~quantitatik e 

treatment limitation with respccr tu n~ental health or substance use disordcr bciiefits in 

any class~lication unless, under tlie terms of the plai~ as written and in operation, my 

processes, strategies, evidentiary standards, or other factors used in applying the 

not~qua~titative treatnlunt linlitatiotl to meiital health or subsiance usc disorder bellefirs in 

the class] iicotion are coi~lparable to, and rue applied no more stringer1 tl y than, the 

processes, strategies, evidentimy slafiddrds, or other factnrs used in applying ll~e 

limitation uiih respcct tu medica~fsurgical benefits in the classilication, cxrept m the 

e.r/etlf {hat r~coguized clzfrictll(v ccppropricrte s!rirrdi~rtls of care nrrzj. pe~niil ~2 L!I~~CIICIIC~." 

75 Fed. Rcg. 5436. iEnipl~asis supplied). 

2. Recomrnenda tiun 

'rhc Departments' implementing regulations should provide a clear definition of 

"rccogrrizc.rl" in the analysis of whether a NQTL is permitted because "recognized 

cfiuically appropriate standards of care may permit a difference." In so doing, CMS 

shfiuld adopt retognixed best practices in dcfining "recognized clinically 

appropriate sta~dards of care." 

The regirlalions provide usefid guidance in defining the lerm "recognized" clinical l y 

appropriate stai~dards of care, and do indicatc that the st(mdatds inust meet a basic 

threshold. Example 3 of Scctiu~l (c)(4) of the regulations discusses a plan illat uscs 

evidenliary standarcls in deten~iiniua whether a trealmenl is nlcdically appropriate. 75 

Fcd. Keg. 5436. The standards are developed bascd or1 "recomi11endntions made by 

panels of experts with appropriate training and experience in the fields ul'mcdicine 

involved." Id. The plan in this instance complies wilh parity, in pa~t because "[tlhe 

processes for developing the evidcntiary statldards" are comparable and applicd no more 

stringenll y bc(~vcc11 nledi callsurgical and MI L'SL9 beneiits. id. In addition, other parts 

of the regulation provide a useCi11 guidc for how to detenmine whicl~ standards arc 

"recogni~cd.~ Tbc regulations state that plan terms delinirlg bcllcfits for MH/SIID 

conditioi~s must be consislent with "gcncrally recognized independent standards of 

current inedical practice." 75 Fed. Keg. 54 12. In defining these Icrms, the regulatioiis 

stattc that n plan "n~ay follow the most currcr:rlt version of the Diagnostic and Statistical 

Manual of Mental Disvrdcrs (DSM), the most current version of the International 

C'lnssificatiou of Diseases (ICD), or a State gl~ideliile." Id. Thus. the regulslions 

demunslratc that there are a number of recogli~~d sources for defining which standards 

are ''recognized." 

CMS also psuvides useful guidance. CMS r~gularly relies on independo~t expertise 

when making its covcragc determinations. For example, lhcrc is cleai- ~-ri.ecedel~t for CMS 

tcr take a rigorous view o i the evidentiary basis for Medicare reimb~wemcnl of dnigs, 

Page 10 of 17 
devices and procedures. 111 the Natioilal Coverage Delerminatiol~ (XCD) process, CMS 

evaluates all pertinent data, including the scjenli lic data that requesters submit, peerrcvicwed medical, technical and suienti lic literature, and recomn~entlations from cxpert 

~~aiiels. The Medicart: Coverage Advisory Committee (Tc-1CAC) plays a role in assisting 

the ugcncy in rtlakirlg sound coverage decisiuns, MC'AC' provides independent, experl 

advice hased upon the reasonabll: applicatiol-I of sciei~tific evidence thro~~gh nicmbers 

who possess thc scientific and technical compelt.nct: lo provide these assessment^.'^ 

It is foreseeahlc that, absent the estahlisl~ment of adequate requircmcnts for when a 

standard is recognized, the parity req~riwmcnts [nay be readi 111 evaded. Attempts to 

circurmvent the parily recluircmalts will simply involve finding a "recugni~rd clinically 

apy rvpriatu" sta~~dard of care. Far example, a plan could clairn the exception si~l~ply 

bccause its own ernplo yees or hired consultants dczrn a standard "recognized with no 

independent verification. This poter~tial loophole would weaken parity prutcctions, and is 

11ol whal Cungrcss intended. Congress intended to ensurc meaningful parity hetween 

MH/SIJT) and medical:surgical benelits arid was clear that treatment limitations sl-rould bc 

"no more reslriclivc" in MHiSCrn benefits than in medjcal!'surgical benelits. Permitting 

an cxceptior~ to parity based on a plan's inlemal rcvicrv alorle would sure1 y weal<en this 

intended protection. 

Eased on the intent of the Act, olher dcti~~jtioils in these tegulatiotls and other I1HS/CMS 

praclices, tht: regulators s t~ould clear1 y define "recognized" standards oS carc. Various 

bcst practices exist for developing recogni~ed slandards of care, includiilg: (1 ) gathering 

input from multiple stakehuldcrs and experts such as academic researchers, serlior 

practrc,itlg clinicians, and consumer and advocacy leaders wilh subjuct iriarter expertise; 

(2) ensuring that the standard has acceptance fiurn inu ltiple pl-ovider and national 

consumer urganizarious; (3) basing the standard on objective scieniilic cvidcncc in the 

Geld, such as published controlled research krials or cxpcr-t consensus panels; and (4) 

approvjnp Q-le slanclard through accredititlg or CI-edentialins organizations, such as thc 

Nat ior~al Quality Forum (NQF) Srandards of Care, Naliunal Standards for the Treatment 

of Substai~ce Use Conditions; Evidence-Bascd Practices. To ensme the strong parity 

protections erlvisiurlcd by Congress, CMS sl~nuid adopt these or other recugnixcd bcst 

practiccs in defining "recognized clinically appropriaie standards of care." 

C. KOTL's Must Meet Both Predominant and Substantially All nrzd [he 

"Con~varablc" and "No More Stringently" Tests. 

1. Stat~rtory and Repulatory Background 

ERISA jj7l'l(aj 129 USC 1 I 85a] (?)(A)(ii) and (B)(ii) and (ii~) rvcre added to require that 

in the case of a group heallh plan (or Ilcalth insurai~ce cox erage offered in conneclim 

wit11 st~ch a pla11) tllat provides both ~nedical and surglcal benefits and nieiltal health or 

subs~ance usc disorder benefits, the treatment limitations applicable to ~nental t~ealth 01- 

substance use disorder bene fils arc no more I-esrr.~ctive tlAlan the predolnirlanl lrealrncnt 

Ijni~tations apl~ lied to substantially all medical arid surgical benefits covered by the plan, 

and that lhcrc arc Iln separate treatment limitations that arc applicable only wit11 respect to 

-- 

'"ti~ Fcd. Rcy. 53440. 

Page 11 of 17 
niental health or s~rbstancc use disorder benefits. A treatmen1 Iirnitatioi~ is considzred to 

be predominant il' ~t is tlie 111ost cnmmon or frequenl ol'such type of lin~it. "The term 

' treatment limitation' includes limils on the frequency of treatment, numbcr of visits, 

days of cowrage, or other si~nilar limits on the scope or duration of treatment." 

The regulations stale lhat: "A group health plan may not impose a 11011quantj ta:ive 

ttTatmeni limitation wj th respect to mental health or substance use disorder benefi 1s in 

any classi fication unless, under lhc tcrms of the plan as writ ten and in operation, any 

processes. strategies, cvjde~~tiary standards, or other factors uscd jn applying the 

nonquarititative treatment limitation lo lncr~tallealtll or substance use disorder bcncfits in 

the classificatic~n arc: cornparable to, and are applied no mure strirlgcntly than, the 

p t'uccsscs, stsarrgi es, evidentiarv st axidarcls, or other factors used it-I applying the 

limitation witl.1 respecl to mcdicalls~rrgical her~efits in the classificaljon, cxcept ro the 

ex lenl lhal recognized clii~ical l y appropriate slandards of care may pertnit a di fference." 

75 Fed. Keg. 5436. 

The nepartments' implementing regulations should clarify thal, consistent with the 

plain language and il~tcnt of MHPAEA, the regulations should be interpreted to 

apply both the "predominant7' and "substantially all" standard under MHPAEA, 

and the "cumparable" and "no more stringenlly" standards of the rcgulntions to 

NQTLs. 

MIIPAEA scl fonh that treatment limitations applicable to MHISUTI txuefits must be 

"no more testl-ictive than the predominant trcatn~ent limitations applied to substantially 

all" medical/surgical bcnc fits covered hy the plan. This phrase contains three separate 

!~sts: ( 1 ) is the limitation applied to substantially all medical/surgical benefits; (2) is it thc 

predominant trea(menl limitation; and (3) is it Inore restrictive in Ihc M HIS UL) benefit 

lhan in thc medical/surgical benefit? The reg~~latlons adopt this test as the "general parity 

requlremenr" and use this stalutory language rel~eatedly. 75 Fed. Reg. 5412-13,5419, 

5440, 5446. MHPAEA applies the three-part test to all trratrncrlt limitations, which ". . . includes limits on the frequency of treatment, ni1111bcr of visits, days of coverage, or other 

similar limits on the scope or duration of treatment.'' The use of the word "includes" 

means that the listcd treatment limitations are examples, not an extiaustive list of all 

possiblc treati~~ent linkitions subject to parity. 'I'hus, the regulations' inclusion oC both 

quant itative trealment lirrlitatiol~s (QTl,s) and NQTLs under thc dc finit ion of treatn~e~~t 

limilalions is cor~sistent with MIPAEA. 75 Fcd. Rcg. 541 3. 

'l'he r-egu lations also establish a rncthodology for implementing the predomiani~t 2nd 

s~rbstanlially aIl standards. The regulations statc that s tl-eatrnctlt limitation applies to 

substantially all benclits in a classiCic;ltion if "it applies tu at least two-thirds of the 

bcrlcfits in that classification." 75 Fcd. Reg. 5414. Jf the treatmenl limitation does not 

meet Ihjs icst, it cm1110t he applied in the MHiSUD benefit. The next step involvcs 

identif)-ing the predunii~~arlt treatment limitation. The predominant treatment limitation 

js tllc level that applies ro more than unc-half of medicallsurgical benefits subject to 

Page 12 of 17 
treatnlenl limitations in that class. Id. Once thc predominant treatment limilatjon that 

applies tu substantially all n~sdical/surgjcal bcnefits is identified, a plan is prohibited 

from implementing a "morc rcstrictjve" trzatn~ent limj t ation. 

U tlller the regulations, tht: ''morr; restrictive" test for QTLs is exprcsscd and applied 

nurneiically (c.g., a plan coverit~g 25 outpalienl days per year under the MIL;SUD bc~lcfit. 

and 44j outpatient days per yea undcr the medicallsurgical benefi~, is applying a more 

restrictive QTL). Becausc NQT1,s are not expressed ~~umcrically, the regulations apply 

the comparable and no more stringently standards to determine whether a NQTL is more 

rr3strictive. For example, pre-ccrtificntion processes can be a limited or nwitifaceted 

process applied dillcrcnt [ally ai~d with very differen1 rcsults. 'I'he comparable and 

applicd no nlore shingently test operaliorializcs MHPAEA's tlo more restriclivc star~dard 

for NQTLs by ensuring lhat prc-certificatii)~~ requirements are demonstrably cnmparablc 

in opera ti or^ and applicatinn. Under this intcrprctatiorl of the regulations, the cornparablc 

and t~o Illare stringently standards arc irl additin11 to the predominani and substalltially all 

standard. 11th~. prctlomir~ai~t and substantially all tesl is not applied to NQTLs, a plan 

could apply a NQTL to a nvininal pcrccntage crf nledicnllsurgjcal benefits and tllcrl apply 

the same NQTL lo a rnucl~ gleater percentage of bentfi 1s on thc MWSUI) side. This is 

inconsistent with the clear language of h1HPAEA wll~cii applies the predominanl and 

substantially all standards to uil trcatnlent limitations. 

Comment 3: Adeqnacv of Provider Net~vorks 

I. S_latutorv Background 

ERISA $7 121a) [29 lJSC 1 185al (3)(A)(i) aitd (B)(i) and (ii) were added lu rcquire that in 

the case ofa group healrh plan (or health ir~surance coverage al'forded in connection with 

such a plan) that pi-ovides both medical and surgical benefits and rmental health or 

substance use disorder benefils, (hc iinancial requirements applicable lo mcntni l~ealth or 

substance use disorder bcricfits are 110 more restrictive lhan thc predon~iiiant financial 

req uiremcnts applied to substanti ally all medical and surgical heilefits covered by lhc 

plan, and if there are no separalc cvst sharing requi txments that are spplicablc only wi 111 

respect to mental hcalth or substance use disorder benciits. A fiuancial requirement is 

conside~+ed to be predominant if it is thc mnst common or frequent of such ~ypc of 

requirement. The 1ct-m "financial requirement" incl udts dcducti bles, co-payments, cojnsurarlce slid out of pocket expcnscs. 

The llepartments' implementing regulatioas should clarify that ~II order to achieve 

parity, grnup health plans should be required to provide an in-network selection of 

quality i~ipaticm~t and outpatient providers that is cnmparable to the availability of 

in-network providers for inpatient and outpalient medical/surgical benefits. 

The grcalcst out-of-pocket expense now illcurred by plat1 participants rcquiri~lg access to 

their- h.IH!SUD benefits, is the gap he tweet^ what is covc~.ed and what is not covcrcd, in 

terms u S thc cxpejlstls incurred when accessing out-o f-nstwork pruviders. '17hus, the 

Page 13 of 17 
optimum way for member< 1-equiring these scr~~iccs to reduce that out-of-puchet cxposrire 

is lo utilizc an in-network provider. Howcver, under present group heallh plans, FI great 

disparity exists between thc abundance of options available Ibr in-netwol-k pl-oviders of 

medical;si~rgical set~ices as opposed to the scdrcity of options for in-network providcrs 

ofMH/SWD services. 

Limitation of network providcrs is a means of imposing both ljnancia! rzyuireinents and 

trearmenl limitatluns on MHISTJ'D benefils that arc trlore restrictive than the predominar~t 

treatment limitatiot~s and financial requirements placed on substantially all of the 

n~edical:s~rrgical benclits. ?'he exi steilce of a sufficienl quantity and quality n f network 

pi-oviders is vital to the efficacy of MI-IPAEA. Many pfarls si~nply lack adequake ne~work 

pruvlders for the treatment of MH/S U Ds. 'I'he ten11 "pl~antom nelworks" is often used 

to describe netwurks offcred by pla~is that 1ac.k m ;rcceplablc quantity, quality and 

geographic placenieilt of providers lo ui1i.r rcal options fnl- treatment services Ibr those 

su fferjll~ from MH!SUD disorders. 

There are a ri~linbcr or steps that plans could take lo ensurc that the size and quality of 

tllcir providei- networks are adequate. For cxample: I) expanding provider n~tworks to 

el-lsure adequrzte geugrapiiic coverage, taking into account 1hc location of A plail's insured 

populalion; 2) allo~~~ng a period of time during which all nonparticipating providers arc 

invited to apply for membership in the provider network; 3) evaluating not only the size 

of a plan's provider nct~vork, hut also the quality of clinical providers jii that tietwork to 

ensure that the iletwark includes a sufficient 11urnber of liceilsed facilities for all lcvcls of 

care, sufficient relative ncmibcrs of psychiatrists, psychologists, mcntai health coui~selors 

and clinical social workers. Plans should be encouraged to have flexibility in the plans 

pxmleters in order to locale lhe quantity and quality of providers (hat arc willing to worlc 

within a plan's paramctcrs. Providing plan participants with a network under the 

h,IH SUD b~nefithat is relatively comparable to the network provided under Ihe 

rntdical/surgical benefit is vilal to rcal parity in benefits as Congress so itltended. 

Comment 4: Co~~sidcr Fut-ther Guidance on MHPAEA Preemption of State Parity 

and Mandate 1,aws Onlv to the Extent that They Prevent the Application of 

hl HPAEA - e,g. Geographic J.ncation of Facility Restrictio~~s 

1. Statu torv anrl Kepulatorv Background 

ERISA $73 1 [29 USC' 1 191 (a)] provides that ERISA supcrscdes provisio~~s ofstate law 

which cst ablis h, implement or con tinut: in cffect any stai~dard or requiremen1 rclat i~lg to 

health ii~surnnce issi~ers in cunnectiol~ wi tll group health plans wbcn such state law 

standards or requiremznts prevent the applicaliutl of 5 7 12. 

ERISA $7 12(s) [?'I 1 JSC 1 1 bSa] (3)(A)(ii) and (B)(il) and (iij 1 were added to rcquire that 

in the case of a goup hcnlth plan (or l~ealrh insurance covcrage offered in ctlnnectiun 

wit11 such a plan) that provides both medical and surgical benefits and mental health or 

subs~ancc: ilsc clisoriier- be~~efits, the treatmcrlt liln~tatioi~s applicable to merltal health or 

substance use clisordcr bcnefi ts are no more resrtic live than the predominant treatmcrl t 

lirrlitations applied to s~lbs~antially allrnedical and sursical bcnclits covered by the plan. 

and that there arc 110 separate treatment Iirn~tations that are applicable on1 y with respect to 

Page 14 of17 
tnental health or substance use disnrder benefits. A lreatn~cnt lirni tation is considered lu 

be predomiriant if it is the most common or ircquent of such type of limit. "Thc term 

'treati~ient limitation' incl udcs lirnirs nn tlie frequency of trealmcnt, numbel- of visits, 

days of coverage, or other similar linlits on the sc.opc or duration of treatment." 

I'he regulations slale that MHPAFA requirements are not to be "const~ued to supersede 

any provislori of State law which eslab Iishcs, implenlz~~ts, or continues in clTcct any 

standard or requil-ement.. .e,~~.rpl 10 rhe extent fllccr suck st~lrlril~rd or rt.gui~*e~~rt.irt prevents 

flte appllcatlon uj'a r~qz4ire~11twt of MIIP.1Ei4.'' 75 Fcd. Keg. 541 8. (Emphasis supplied). 

The repuialiuns statc that: "A group health plan may rlut impose a not~quantitatjve 

Irealmcnt lirnitnti on with respect lo mcrltal heal t11 or substance use disordcr bcnefits in 

any classification unless, urldcr the terms of the plan as writtcn and in opel-ation, any 

processes, hirategics. cvjdentiary standards, or uthcr factors used in applying Ihe 

nonquarltltative treatment limitatjun to mcntal helzltll or substance use disordcr bellsfits in 

thu classificntio~~ are comparable to, and are applied no mure strirlgently than, the 

processes, stralegics, evidentiary standards, or uthcr factors used in appiying the 

limitation with respect to medicallsurgical benefits ill the ctassificailon, cxcept to the 

extent that recogni~cd clinically appropriate standads of care may permit a dififrenc~." 

75 Fcd. Keg. 54-3h. 

The Departments sl~ould consider develvping ahid implcnienting regulations that 

would providc for the enhancement of state insurance laws (including parity laws 

and group plan benefit desigus that follow said state laws) that currently contain 

requirements which prevent the application oTMHPAE.4 because they provide for 

treatment liniitations that are more rcstrictivc than the predorniaant treatment 

limitations applied to substantially all the medicallsurgictll benefits, andlor they 

include separate treatment limitations applicable only to MHISUD bc11 cfi ts (e.g. 

geographic lvration of facility restrictions). 

3. Rationale 

Group flcaltll plans often include rcstriciions as prompted by slate mu~dlztes and parity 

laws. Such mandates and parity laws arc not preernptcd ouly to the extent that they do not 

prevenl the appljcatioti of MEIPAEA. For cxample, a State law thal mandates the 

inrlusio~i of MH.iSUD bendits in fillly insured group health pIms clearly "does not 

prevent ~ht. application of X4kIPAEA." Hcrwcver, that State mandate may include 

rcquirements for stat e-speci l<c facility and clinician liccnsure for coverage under (he 

MII/SUD bcncfit, wtii le state-specific hospital and clinician licenscae is nut 1-equired 

under the rneciical/surgicn 1 benefit. Thus, under lhc plan, members are covered under* r lie 

MH/SLILI betleti t only if hey rcccive treatment from facili tics and/or clinicians licenscd 

by the slate in wllicl~ the plan is issued. The ~nedicalfsurgical benefit irl such plans 

requires that facili~izs and/or clmicians are appropriately licei~sed by the statc in which 

lht: hcaltll care provider is localcd and, accordingly, the statc in which the services arc 

rendered. S uc tl licetisure restrictions iirldcr the M HJSl JD benefil rcsu It 111 geographic 
restrictions on participants, thereby resulting in Lrealment limitations that do nnt exist 

(arid arc therefore in no comparable) ~rnder thc rncdical/surgicnl benefit. 

Tu illustrate, a paflicipant in a group health plan issucd in the state of Kansas, that 

cot~tains an out-of-network bcnclit. may ubraii~ covered medical!surgical trcattncnt fro111 - 

an out-of-stak ccntcr of t~ealthcare excellence licensed md locatcd in New J'ork. 

Hoxvcver, that participant under the same plat] callnot leave the state of Kansas in ordcr to 

obtain covered MH'SUD treatment frnni a repc~table, licensed pru\ idcr of hidher 

cllousing, because the state mandate and hence thc plan benefit design requires that the 

MHiSlTD treatmen1 fi~ilily bc licensed under Kansas statutes. In this case, thc pottian of 

lhe slatc law ~tlandate [hat prevents the application ur MHPAEA could be required to be 

enh aiiced to provide par- ty belw ecn thc mcdicaVsur~ical out-of-network bene fil and thc 

MI-USLD uul-olL11ctwork beuefit, and the plan benefit design cuuld bc r.cquited to 

clirninate such geographic restrictions according1 y . 

Comment 5: Medicaid Manaped Care Organizations (bZCOs) are Reqrrircd to 

Comph with the Regulations 

1. Statrrtory and Regulatory Backxruund 

The Social Sccurjty Act, Section 1932(b)(8) specifies lhal "Each Mcdicaid managed care 

ol-galliz;ttion shall comply with ~hc r~quircmcnts of subpatt 2 af Part A of title XXVII or 

the Public Hcalt11 Service Act [42 T.;.S.C.A. 300gg-5 et seq.] insolir as such rcyuiren~ents 

apply and are effective with respect to a health irlsuraricc issuer that offers group health 

insurance coverage." 42 U.S.C. 1396~-2(h)(8)(2i)Oo). The statute quoted, 42 U.S.C.A. 

30l)gg-3 et seq., is the 1996 Mental Ilealth Parily Aci (MHPA), as modlfjed in 2008 114' 

MHP.4EA. 

2. Recommendation 

'I'l~e Llcpartmen t's implementing regulations should clarify that Medicaid man aged 

care plans (MCOs) are required to cotnply with the parity provisions of MHPAEA 

and the reg~~lations aissued by the Departments. 

3. Rationale 

The Act, its legislatii c history, and the regulatory history of the 1996 Mental Hcaltl~ 

Parily Act (MHYA) inake clear that Medicaid MCOs must comply with the parity 

requir'e~~~ents as set furth in thc regulations. 111 1997, the Balanced Budget Act (BBA) 

made il nu~ttbcr of changes to the Medicaid statute including adding Section 1932(b)(8), 

quoted to above, which requires that MC'O plans c0111p1y with the parity tequirements ol' 

the I OOh MHPA. ' "he I Ieal th Care Financing Admini strat inn (HCFA) (predecessor to 

CMS), subscqt~cntly released a number of Ierters lo State Mcdicaid Ilirectors explaining 

the effect of the B DA un Mcdicnid managed care organizations. In a lellcr dat cd Ja~iuat-y 

20, 191-18, Sally Richardson, the Director oClhc C'cntel- for Medicaid and State Operations, 

stated Illat Ihc: panty requirements uf the 1996 MIIPA "apply to Mcd~caid nia~~aged care 

-- 

I5 42 r: s c. 1396~-2(b)(s} (1000). 

Page 16 of 17 
nrganizations wi tl~oat cxcmptions."l~his is so because Section 1932(b)(6) "speci tically 

requires Medicaid rtlanaged care nrganizations tu cumply with MHPA by treating them, 

Sir that pui-pose, like health insurar1c.e issircrs oftknng ~oul-, health insurance coverage." 

V'li~lc Director Richardson's letter was written during in~plementation of the 1996,4ct, 

its reasoning conli~~ues to apply with respect to the 2008 Act. Thc Icgislative histoiy of 

MHPAEA is consistent with this conclusion. In thc Sc~late C:otnmittee on Health, 

Education, Labor, and Pensiutls (HELPJ'S Report accompanying Ihe bill lssucd on April 

1 1, 2007. the Committee stated tlm "[tlhe bill's requiremcnts for issuers of psoup health 

jns~rance would apply to managed care plans in the Medicaid pmgram."'' Bccausc thc 

7,008 MHPAEA simply addcd a sectiot~ to the original 1996 MHPA. this new section 

falls within thc scope of Section 1932(b)(8)'s reclcrircrrlcnt that mainaged care 

organi7ations must comply with thc parity requirements. Moreover, the rcgulatjolls state 

that !key art: "irnpleme~~ting" the Acr and do aoi cunlain an exelnptioil for MCOs from 

conipli ailce with the requirements thcrein. Since the Act's requiremenls apply to 

Medicaid MCOs, and since the regulations that implcmcrit the Act give 110 indication ha! 

scpmate rules apply to Me0 pIans, IZICOs must coti~ply with these regulalions. 

I h T.c!ti.r Cro~rl Sally Richardson. Tlirector ul the Health Care 1;inancin~ Administmtion, to State Med~caid 

Dircc lor s (Ja~uary 2C). 1998)- available at, llttp.:/www.cms. hhs.~0v!~n1d~~do~vi~1oads~SMI~ 1 2-O9Xd.pdf. 

" S, REP. Nrj. 1 10-53, ar 5 (2007) (Sen. Co~ntn. on Health, F.duc. & Labor, 2007). 

Page 17 of I?