"Request for Information: Mental Health Parity and Addiction Equity Act page 5

Question 6: Which aspects of the increased cost exemption, if any, require additional guidance?
Would model notices be helpful to facilitate disclosure to federal agencies, state agencies, and
participants and beneficiaries regarding a plan’s or issuer’s election to implement the cost
exemption?

Although plans that experience certain cost increases as a result of the mental health parity
regulation may opt out of compliance with MHPAEA, plans that choose this cost exemption
should be required to send paper notices to enrollees and contracted medical providers. Along
with disclosure of the change to their benefits, plan enrollees should be provided with a transition
advisor provided by the plan and mandated by the federal government. The transition advisor
would help ensure that the enrollee does not experience disruption in care.

CHA recommends that regulators require plans to send a paper notification to plan enrollees
and contracted medical providers should the plan opt out of compliance due to the cost
exemption. Further, we recommend that, upon opting-out of parity, plans be required to
provide the enrollee with a transition advisor to ensure continuity of mental health and
substance use disorder care and coordination of care between physical and mental health
providers.

Thank you for the opportunity to comment on these designated elements of the MHPAEA. CHA
members are committed to ensuring access to care for all patients experiencing mental illness or
substance use disorders, and commend CMS and the Department of the Treasury for laying the
foundation for meaningful ERISA plan parity. If you have any questions about these comments,
or if you wish to discuss these matters further, please contact Sheree Kruckenberg at 916-552-
7576, or skruckenberg@calhospital.org.

Sincerely,

Sheree Kruckenberg John Rigg

Vice President, Behavioral Health Vice President, Federal
Regulatory Affairs

1215 K Street, Suite 800, Sacramento, CA 95814 Telephone: 916-443-7401 Facsimile: 916-552-7596 Website: www.calhealth.org,

Corporate Members: Hospital Council of Nontem and Cerra California, Hospital Association of Souther Califia, and Healtheare Assaciston of San Diego and Imperial Courts



Request for Information: Mental Health Parity and Addiction Equity Act page 4

receive coverage in California, medical providers must demonstrate necessity of treatment to
individual plans with differing standards for medical necessity that can be at odds with each
other.

CHA recommends that regulators develop or endorse the use of a uniform, evidence-based
medical necessity clinical decision process in order to evaluate and standardize mental health
and substance use disorder treatments and care.

Question 4: What information, if any, regarding the reasons for any denial under the plan (or
coverage) of reimbursement or payment for services with respect to mental health or substance
use disorder benefits is currently made available by the plan? To whom is this information
currently made available and how is it made available? Are there industry standards or best
practices with respect to this information and communication of this information?

In California, plans may only deny coverage based on lack of medical necessity or a non-parity
diagnosis. Due to the nature of mental illnesses, patients frequently depend on medical providers
to advocate on their behalf and demonstrate medical necessity. Unfortunately, each plan is
individualized and complex, making it difficult for consumers and providers alike to determine
denial rationale.

The stigma surrounding mental illnesses and substance use disorder also impact the ability of
plan enrollees to determine information regarding their plan coverage and reasons for denial.
Most employees would be hesitant to ask employers about mental health benefits, making it
difficult to gauge the quality of the ERISA plan. Appropriate appeals may not be made due to
ignorance about plan details and fear of inquiring. A national entity that protects the anonymity
of patients should be created to receive complaints about plans that enrollees may otherwise be
afraid to make.

CHA recommends that regulators develop transparent and consistent medical necessity
criteria. Further, insurers should be required to provide transparent and consistent criteria
for denial, and that a uniform, meaningful, transparent, and expeditious process for
contesting a denial be established.

Question 5: To gather more information on the scope of out-of-network coverage, the
Departments are interested in finding out whether plans currently provide out-of-network
coverage for mental health and substance use disorder benefits. Ifso, how is such coverage the
same as or different that out-of-network coverage provided for medical and surgical benefits?

The use of out-of-network providers is commonplace in California for medical and surgical care.
However, this practice is not allowed for mental health treatment.

CHA recommends that regulators mandate that mental health patients be permitted to use out-
of-network providers when a plan network provider is inadequate to meet the needs of the
patient and for emergency care.

1215 K Street, Sui
“Conporate Members: Hospital

‘Sacramento, CA 95814 Telephone: 916-443-7401 Facsimile: 916-552-7596 Website: wwwcalhealth.org,

Hospital Association of Sothem Calfomia, and Healthcare Association of San Diego ad Imperial Counties



CHA Comments on CMS-4140-NC



HOSPITAL

ASSOCIATION
A so Providing Leadership in

Bz, CALIFORNIA
/

Health Policy and Advocacy

May 28, 2009

Ms. Charlene Frizzera

Acting Administrator

Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building

‘200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

RE: CMS-4140-NC, Request for Information Regarding the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008; Request for Information
(Vol. 74, No. 80), April 28, 2009

Dear Ms. Frizzera:

On behalf of the California Hospital Association (CHA) and our nearly 450 hospital and health
system members, we appreciate the opportunity to provide information to Centers for Medicare
& Medicaid Services (CMS), Employee Benefits Security Administration and Internal Revenue
Service regarding the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008 (MHPAEA) published in 80 Fed. Reg. 19157 (April 28, 2009).

In 1999, California passed a mental health parity law (AB 88) requiring private health insurance
plans to provide equal coverage for physical health and selected mental health conditions,
including serious mental illnesses (SMI) in adults and serious emotional disturbances (SED) in
children. The law requires health plans to eliminate the benefit limits and reduce the cost-
sharing requirements that have traditionally made mental health benefits less comprehensive than
physical health benefits. A decade after enactment, the private health plans have implemented
the parity requirements quite well on paper. However, significant barriers to access have
impeded the ability of enrollees to obtain the appropriate care in the appropriate environment.

By assuring that ERISA plan enrollees have equivalent access to care for necessary mental health
and substance use disorder treatment as they do for non-mental health conditions, MHPAEA has
substantial potential to positively affect the nation’s public health. If implemented responsibly,
MHPAEA will better ensure that ERISA plan enrollees (which include employees and their
families at some of the nation’s largest companies) will better be able to receive and afford
quality mental health and substance use disorder treatment. CHA commends the Centers for
Medicare & Medicaid Services and the Treasury Department agencies responsible for MHPAEA
implementation for their thoughtful and deliberative approach to implementation of the mental

499 So. Capitol Street SW, Suite 410, Washington, DC 20003 + Telephone: 202.488.3740 + Facsimile: 202.488.4418
1215 K Street, Suite 800, Sacramento, CA 95814 + Telephone: 916.443.7401 + Facsimile: 916.552.7596 +» www.calhospital.org

Corporate Members: Hospital Councit of Northern and Central California, Hospital Association of Southern California, and Hospital Association of San Diego and Imperial Counties


Request for Information: Mental Health Parity and Addiction Equity Act page 2

health parity provisions of PL. 110-343, and hope that the following comments are helpful as
CMS and Treasury consider how to frame the important upcoming regulatory cycle.

Question 1: The statute provides that the term “financial requirement” includes deductibles,
copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit
and an annual limit. The statute further provides that the term “treatment limitation” includes
limits on the frequency of treatment, number of visits, days of coverage or other similar limit on
the scope of duration of treatment. Do plans currently impose other types of financial
requirements or treatment limitations to 1) medical and surgical benefits and 2) mental health
and substance use disorder benefits? Are these requirements or limitations applied differently to
both classes of benefits? Do plans currently vary coverage levels within each class of benefits?

There are no national standards as to which mental health diagnoses are required to be covered at
the same level as medical and surgical benefits. In California, nine “severe mental illnesses” are
required to be covered. These illnesses include: Schizophrenia, Schizoaffective disorder, Bi-
polar disorder, major depressive disorders, panic disorders, Obsessive-compulsive disorder,
Pervasive developmental disorder or autism, Anorexia nervosa, and Bulimia nervosa. Any other
mental illness or substance use disorder is not required to be covered by health plans. “Non-
parity diagnoses” may still have restrictions on the number of visits, deductibles, lifetime limits,
pre-existing condition restrictions, and gender-based rate setting.

CHA recommends that all Diagnostic and Statistical Manual of Mental Disorders (DSM)
diagnoses be covered at the same level as medical and surgical benefits or regulators should
develop a standard minimum benefit package.

Treatment limitations for mental illnesses and substance use disorders are difficult to determine.
This is due to the fact that access to information regarding treatments covered by a given plan is
limited. For mental health professionals to provide affordable and high quality care to their
patients, they must have access to the plan’s benefit package and “evidence of coverage”
information. This information is often complex and difficult for enrollees to discern, especially
enrollees with mental illnesses. Providers are frequently depended upon to assist enrollees with
understanding a plan’s benefits.

CHA recommends that regulations regarding prescriptive disclosure requirements should
require current plans to make “evidence of coverage” available on request to potential and
current enrollees as well as contracted medical providers.

Billing of treatment for mental illnesses and substance use disorders is extremely burdensome
administratively. CHA recommends that agencies develop one standardized form (similar to
the UB92) to streamline billing, lower administrative costs, and help providers run more

efficiently.

Question 2: What terms or provisions require additional clarification to facilitate compliance?
What specific clarifications would be helpful?

1215 K Street, Suite 800, Sacramento, CA 95814 Telephone: 916-443-7401 Facsimile: 916-552-7596 Website: wwwcalhealthorg,

‘Corporate Members: Hospital Couneil of Northen and Certral California, Hospital Association of Souther California, and Healthcare Aswociction of San Diego and Imperial Counties



; Request for Information: Mental Health Parity and Addiction Equity Act page 3

The term “psychiatric emergency condition” requires further clarification. CHA is currently
working on a state bill to better define this term. The lack of a consistent definition causes
confusion about which treatments require prior authorization and which do not.

Treatment authorization can be extremely complicated and time consuming, and frequently
detracts from providers’ ability to treat a psychiatric illness that may be considered an
emergency. This additional time spent seeking authorization may pose a detriment to patients.
Doctors and enrollees must frequently spend hours on the phone being sent back and forth from
the department of the health plan which underwrites or administers the plan for physical health
conditions and their contracted “carve out” mental health administrators. Sometimes, clinicians
are required to call back at very specific times of day that (due to clinicians’ high patient load)
are inconvenient and may conflict with their patient care schedules. Frequently, the
authorization ultimately is determined by a health plan employee who is not a mental health
professional. CHA members especially report being sent back and forth from the physical health
departments and the mental health departments of health plans when seeking authorization for
imaging techniques, such as MRIs, to determine presence of brain injuries.

CHA recommends that regulatory agencies broadly define the term “psychiatric emergency
condition” and clarify that prior authorization is not required, aligning this with current
Emergency Medical Treatment and Labor Act (EMTALA) requirements.

Question 3: What information, if any, regarding medical necessity determinations made under
the plan (or coverage) with respect to mental health or substance use disorder benefits is
currently made available by the plan? To whom is it made available and how is it made
available? Are there industry standards or best practices with respect to this information and
communication of this information?

In California, it is currently difficult for both providers and enrollees to determine coverage
benefits and the definition of “medical necessity.” Evidence of coverage information is
considered proprietary by most plans. Although enrollees have depended on providers to explain
benefit packages and advocate on their behalf, medical providers have limited access to benefit
package information. The information that is often made available to providers is vague, lacks
detail, and frequently differs from the information enrollees may access.

CHA recommends that regulators mandate that medical providers and enrollees have access to
evidence of coverage information in order to better advocate on behalf of themselves or their
patients.

Medical necessity varies by plan in California and is based on diagnoses. The term “medical
necessity” is poorly defined and frequently causes confusion between medical providers and
plans. No industry standard exists to classify treatments. The lack of a uniform care
determination system can result in a wide variation in treatments. An evidence-based tool should
be developed to standardized and evaluate treatment and level of care needs in order to
determine best practices and medically necessary treatments. Currently, in order for enrollees to

1215 K Street, Suite 800, Sacramento, CA 95814 Telephone: 916-443-7401 Facsimile: 916-552-7596 Website: wwwealhealth org,

‘Corporate Members: Hospital Come of Norther and Cental California, Hospital Association of Southem Califomia, and Healtheare Associaton of San Diego and Imperial Courties