Legal and Government Relations 

 One Kaiser Plaza, 27th Floor 

 Oakland, CA 94612 

 Kaiser Foundation Health Plan, Inc. 

Program Offices

May 28, 2009 

Submitted electronically via http://www.regulations.gov 

Centers for Medicare & Medicaid Services 

Department of Health and Human Services 

Attention: CMS–4137–NC 

P.O. Box 8017 

Baltimore, MD 21244–8010 

Office of Health Plan Standards & Compliance Assistance 

Employee Benefits Security Administration 

Room N–5653, 

U.S. Department of Labor 

200 Constitution Avenue NW 

Washington, DC 20210 

CC:PA:LPD:PR (REG–120692–09) 

Room 5205, Internal Revenue Service 

P.O. Box 7604 

Ben Franklin Station 

Washington, DC 20044. 

Re: Request for Information regarding the Paul Wellstone and Pete Domenici Mental 

Health Parity and Addiction Equity Act of 2008 (Division C of Pub. L. No. 110-343) 

Department of Labor, Employee Benefits Security Administration, RIN 1210–AB30 

Department of Health and Human Services, Centers for Medicare & Medicaid Services [CMS–

4140–NC] 

Dear Sir or Madam: 

Kaiser Permanente offers the following comments in response to the Request for Information

(“RFI”) regarding the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 

Equity Act of 2008 (“MHPAEA”) issued on April 28, 2009 in the Federal Register. The RFI is a 

collective request from the Departments of Labor, Health and Human Services and Treasury 

(“Departments”) to solicit public comments in advance of future rulemaking regarding issues 

raised by MHPAEA. 

The Kaiser Permanente Medical Care Program (which offers services to the public under the 

Program’s trade name “Kaiser Permanente”) is America’s largest private integrated healthcare 

delivery system, comprising Kaiser Foundation Health Plan, Inc. (and its local subsidiaries, 

collectively “Health Plan”), the nation’s largest nonprofit health plan; the nonprofit Kaiser 
Kaiser Permanente Comments 

RFI: MHPAEA 

May 28, 2009

 2

Foundation Hospitals (“Hospitals”); and the Permanente Medical Groups (“Medical Group”), 

eight independent physician group practices that contract exclusively with Health Plan to meet 

the health needs of Kaiser Permanente’s 8.7 million members in nine states and the District of 

Columbia. 

We support the objectives of MHPAEA to achieve consistent minimum parity for mental health 

and substance use disorder benefits. As an integrated health care delivery system, we also 

recognize the many challenges in meeting the extensive parity requirements under MHPAEA. 

We appreciate the opportunity to respond to this RFI. Our comments and recommendations 

follow: 

We recommend that the Departments provide clear and concise guidance as soon as 

possible 

MHPAEA will impact benefit design and bidding for health plans that include mental health or 

substance use disorder benefits for large groups of over 50 employees. Health Plan will need to 

determine what constitutes comparable benefits or “predominant” financial restrictions or 

treatments limitations for medical and surgical benefits in order to apply the correct deductibles, 

copayments, limits on days of coverage, or other similar restrictions on mental health and 

substance use disorder benefits. 

There are additional challenges for state-regulated products, such as Health Plan’s HMO plans 

that fall under various applicable state parity/benefits mandate laws. For these products, 

substantial contract revisions may apply to large group plan contracts. Contract negotiations 

regarding benefits and premiums are well underway for plan years beginning in 2010. Thus, it is 

critical that all health plans and health insurers receive this information as soon as possible, so 

that they can make any necessary benefit modifications, fix any incorrect assumptions and 

communicate accurately to customers seeking information about the impact of MHPAEA. 

Moreover, as a provider of health care services, Kaiser Permanente may have to modify health 

care delivery and operations to address anticipated higher utilization of mental health and 

substance use disorder resources by its members. Therefore it is imperative that guidance be 

issued as soon as possible to ensure continued access to care. 

We recommend that the Departments allow plans reasonable flexibility in meeting the 

parity requirements of MHPAEA 

Within Kaiser Permanente, copayments or coinsurance limits apply for many medical and 

surgical services as well as for mental health and substance use disorder benefits. Copayment 

and coinsurance amounts may vary among benefits for in-network versus out-of-network 

coverage. Treatment limitations may be determined by medical necessity. For example, 

coverage may be discontinued for a treatment that fails to deliver improved or expected 

outcomes. Current limitations on mental health and substance use disorder benefits conform, as 

required, to applicable state and federal law, and may include frequency of treatment, number of 

visits and days of coverage. 
Kaiser Permanente Comments 

RFI: MHPAEA 

May 28, 2009

 3

Meeting the parity requirements of MHPAEA may be relatively straightforward for categories of 

mental health or substance use disorder benefits with comparable services or classes of service 

for medical and surgical benefits. Similar or reasonably equivalent benefits (e.g., inpatient stays, 

outpatient visits) can be re-designed to achieve parity for financial limits (e.g., per stay/visit 

copayment or coinsurance) or for treatment restrictions (number of days or visits) when 

compared on a service-by-service basis. 

 

However, certain other mental health services have no obvious corollary services on the 

medical/surgical side, such as residential treatment for substance use disorders. In addition, 

numerous states have adopted mental health parity laws, so plans may be subject to different 

tests or standards imposed by various state regulatory schemes for determining compliance. 

Some state statutes formulate how certain services may be exchanged or converted.1 Other states 

require that certain financial limitations on mental health services be “actuarially equivalent.”2 

Adding to the complexity are state laws that mandate certain benefits be covered. MHPAEA 

leaves these state requirements in place but requires a broad level of parity – 

Because health plans and insurers are required to meet the complex requirements under state 

parity laws and mandates, we urge the Departments to permit broad flexibility in meeting federal 

parity requirements that still support the intent of MHPAEA. In particular, we strongly urge the 

Departments to issue clear guidance on how MHPAEA interacts with state law. Variations in 

state law make the Departments’ views on the MHPAEA’s preemption scheme especially 

important as we move towards implementation of both federal and state requirements, as 

applicable. 

We encourage the Departments to expressly address how health plans and insurers can satisfy the 

federal parity requirements for benefits that cover treatment of mental health, behavioral and 

substance abuse disorders, which are particular to that field and for which there are no clear 

comparisons to medical or surgical benefits offered under the same benefit plan. However, we 

also recommend that the Departments avoid developing a rigid scheme for meeting parity 

requirements that will create potential conflicts with existing state parity laws. 

We recommend that the Departments clarify that MHPAEA does not apply to “retireeonly” group health plans. 

ERISA, the IRC and the PHSA include provisions that exempt the application of MHPAEA in 

the case of “any group health plan (and health insurance coverage offered in connection with a 

group health plan) for any plan year if, on the first day of such plan year, such plan has less than 

 

1 See e.g., Haw.Rev.Stat.§431M-4 “Each day of in-hospital services may be exchanged for two days of nonhospital 

residential services, two days of partial hospitalization services, or two days of day treatment services....Each day of 

in-hospital services may also be exchanged for two outpatient visits under this chapter; provided that the patient's 

condition is such that the outpatient services would reasonably preclude hospitalization.” See also Va.Code § 38.2-

3412.1. Coverage for mental health and substance abuse services. 

2 See for example Md.Ins.Code 15-802. 
Kaiser Permanente Comments 

RFI: MHPAEA 

May 28, 2009

 4

2 participants who are current employees....”3

 Therefore, implementing regulations should 

clarify that those separate group health plans (and any health insurance offered by such plans) 

that provide benefits for retirees and their family members and have fewer than 2 participants 

who are current employees should not be subject to MHPAEA. 

We recommend that guidance be given regarding how MHPAEA affects the currently 

required 190-day limit for inpatient psychiatric hospital services during a Medicare 

beneficiary’s lifetime. 

According to CMS regulations and policy manual provisions, payment may not be made for 

more than a total of 190 days of inpatient psychiatric hospital services during the patient's 

lifetime. The limitation applies only to services furnished in a psychiatric hospital.4 Given this 

limitation, and the apparent conflict between the two federal laws, we are requesting that the 

Departments provide guidance on whether or how MHPAEA applies to the 190-day limits for 

large group health plans that do not impose similar day limits on inpatient hospital stays. 

Conclusion 

Implementation of MHPAEA is a huge undertaking and benefits design for 2010 is already 

underway. We need clarification in how parity will be determined and urge the Departments to 

be flexible in their approach. Finally, we ask the Departments to confirm that MHPAEA does not 

apply to retiree-only plans and to provide guidance regarding the impact of MHPAEA on 

Medicare’s 190-day limit for inpatient psychiatric services. 

We appreciate the opportunity to provide you with information. We would welcome the 

opportunity to discuss these matters with you further. If you have questions or concerns, please 

contact me at 510-271-6621 (email: lori.potter@kp.org). 

 

Sincerely, 

Lori Potter 

Counsel, Legal & Government Relations 

Kaiser Foundation Health Plan, Inc. 

 

3

 See 26 U.S.C. §9831(a)(2), 29 U.S.C. §1191a(a) and 42 U.S.C. §300gg-21(a)). 

4 See e.g., 42 CFR 409.62 and Medicare Benefit Policy Manual, CMS Pub. 100-02 , Ch. 4, Section 50. 

.