—=EBMS

Employee Benefit Management Services, Inc.

May 27, 2009

U.S. Department of Labor

Office of Health Plan Standards and Compliance Assistance
Employee Benefits Security Administration, N-5653

200 Constitution Ave NW

Washington, DC 20210

Attn: MHPAEA Comments
Dear Sir or Madam:

Employee Benefit Management Services, Inc. (EBMS) is the Third Party Administrator for self-
funded ERISA employee welfare benefit plans. On behalf of its employer clients, EBMS submits
the following comments regarding the Paul Wellstone and Pete Domenici Mental Health Parity
and Addiction Equity Act of 2008.

The majority of EBMS’ employer clients offer mental health and substance abuse benefits
through their employee welfare benefit plans. Benefits are typically available for both eligible
employees and eligible dependents, but may have certain limitations on treatment as has been
permitted by the Mental Health Parity Act of 1996. Plans have limited mental health treatments
to a certain number of outpatient visits or inpatient days per benefit year. While not subject to the
Mental Health Parity Act of 1996, benefits for chemical abuse treatment programs have been
similarly limited.

As EBMS assists its employer clients with a review of their employee welfare benefit plans for
compliance with MHPAEA, EBMS notes the following area where additional clarifying
guidance is requested:

Under Section 1185a(a)(2)(A) of Title 29, Chapter 18, Part 7, the plan may not impose an annual
limit on mental health or substance use disorder benefits, if the plan does not have an annual
limit on substantially all medical and surgical benefits. Or in the alternative under Section
1185a(a)(2)(B), if the plan does have an annual limit on substantially all medical and surgical
benefits, the plan can impose that same limit upon mental health and substance use disorder
benefits. Under Section 1185a(a)(2)(C), the Secretary is granted authority to establish rules to
address situations in which (A) or (B) do not describe the plans or where the plans may have
different limits on different categories of medical and surgical benefits.

EBMS suggests that the Department of Labor issue additional guidance defining the term
“substantially all medical and surgical benefits”. Employee welfare benefit plans may impose
limits on certain treatments and remain in compliance with ERISA Section 702 (a)(2).
Accordingly, nothing should prevent a plan from establishing limits or restrictions on the

BILLINGS SALTLAKE CITY PORTLAND DENVER
P.O. Box 21367 _ Billings, MT 59104-1367 406-245-3575


—EBMS

Employee Benefit Management Services, Inc.

amount, level, extent, or nature of the benefit, if done so for all similarly situated individuals
enrolled in the plan, and not based upon a health status-related factor of an individual. To that
end, annual monetary limits are frequently imposed upon such treatments as inpatient and
outpatient therapy and rehabilitation benefits, skilled nursing care, home health care, hospice
care, and chiropractic care. These treatments are typically provided for longer periods of time to
treat a chronic condition or injury. Annual monetary limits on these treatments can give
discretion to a treating provider to manage resources for his/her patient without the extra step of
worrying what “criteria” may be applied to determine “medical necessity”. Mental health and
substance use disorder treatments are analogous in that treatment is often recommended for a
longer period of time in order to adequately treat the participant’s underlying condition.

A reasonable interpretation of the phrase “substantially all medical and surgical benefits” is to
consider only those treatment categories that are analogous to treatments for mental health and
substance use disorders. Treatment categories that could be considered analogous to treatments
for mental health and substance use disorders would be other therapies or inpatient rehabilitation
programs. These treatments may be longer in duration and are often measured by progress made
towards stated goals. We think it reasonable that if the plan imposes annual limits on treatment
categories similar to treatments for mental health and substance use disorders, the plan may
impose annual benefit limits no less restrictive on treatments for mental health and substance use
disorders.

Similarly, the plan should be able to impose the predominant treatment limit on mental health or
substance use disorder benefits if it imposes the same limit on substantially all medical and
surgical benefits, as permitted under Section 1185a(a)(3)(A) of Title 29, Chapter 18, Part 7. This
assumes that the phrase “substantially all medical and surgical benefits” is defined as suggested
above. For example, in lieu of imposing an annual monetary limit on certain treatments, a plan
may choose to impose limits such as a certain number of visits per benefit year (ex: chiropractic
care) or a certain number of days or months per year or lifetime (ex: home health care or skilled
nursing care). We think it reasonable for a plan to continue to impose limits on treatments for
mental health and substance use disorders as long as they are no more restrictive than limits
imposed on other analogous treatment categories.

On behalf of its employer clients, EBMS appreciates the opportunity to submit comments to the
Department of Labor.

Singerel:
#6 fog4h, ID, MBA

Employee Benefit Management Services, Inc.

BILLINGS SALTLAKECITY PORTLAND DENVER
P.O, Box 21367 _ Billings, MT 59104-1367 406-245-3575