Docket: EBSA-2009-0010 

Request for Information Regarding the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 

Equity Act of 2008 

Comment On: EBSA-2009-0010-0001 

Request for Information Regarding the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 

Equity Act of 2008 

Document: EBSA-2009-0010-DRAFT-0097 

Comment on FR Doc # E9-9629 

Submitter Information 

Name: Rick Pollack 

Address: 

325 Seventh St. NW 

Suite 700 

Washington, DC, 20004 

Email: kshattuck@aha.org 

Phone: 202-626-3754 

Organization: American Hospital Association 

General Comment 

Please see attached PDF 

Attachments 

PUBLIC SUBMISSION 

As of: May 26, 2009 

Received: May 26, 2009 

Status: Pending_Post 

Tracking No. 809b4d87 

Comments Due: May 28, 2009

Submission Type: Web

EBSA-2009-0010-DRAFT-0097.1: Comment on FR Doc # E9-9629
May 26, 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 our more than 5,000 member hospitals, health systems and other health care 

organizations, and our 40,000 individual members, the American Hospital Association 

(AHA) appreciates the opportunity to respond to the request for information from the 

Centers for Medicare & Medicaid Services, Employee Benefits Security Administration 

and Internal Revenue Service (referred to as “the agencies” hereafter) on the Paul 

Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008

(MHPAEA).

The manner in which this landmark legislation is implemented will greatly impact access

to and affordability of mental health and substance use disorder health benefits. This 

request for information takes an important step in making certain that implementation is 

complete, systematic and thoughtful. We have identified several areas where greater 

clarification is necessary, as well as certain policies that would help ensure that those 

who suffer from mental health and substance use disorders can obtain the care they 

critically need. Our detailed responses to those questions in which hospitals have an 

interest follow.
Ms. Charlene Frizzera

May 26, 2009

Page 2 of 6

Question i: What policies, procedures, or practices of group health plans and health 

insurance issuers may be impacted by the MHPAEA? What direct or indirect costs 

would result? What direct or indirect benefits would result? Which stakeholders will be 

impacted by such benefits and costs?

Some health plans will likely aim to improve their networks of mental health and 

substance use-related providers prior to and after the effective date of the MHPAEA. 

While we welcome this effort, such actions in combination with bringing mental health 

and substance use disorder benefits to parity in general, could greatly increase demand 

for and utilization of these benefits, as well as plans’ costs for these benefits. However, 

group health plans that experience certain cost increases as a result of the law – 2 percent 

for the first plan year and 1 percent for each subsequent plan year – can obtain 

exemptions from the law after they comply for one year. Therefore, those plans that 

incur such increased costs can obtain cost exemptions. 

We are concerned that the mental health and substance use disorder health benefit 

structures of certain plans would then fluctuate significantly as they comply with 

and then obtain exemptions from the MHPAEA. This would cause substantial 

indirect costs and disruption in treatments and services for providers and, most 

importantly, for beneficiaries. 

In addition, while the law requires plans that offer mental health and substance use

disorder benefits to offer them at parity, it does not preclude employers from simply 

dropping plans that include these benefits. If plans experience increased costs and shift 

those costs to employers, it could lead employers to drop their mental health and 

substance use disorder health coverage, thereby decreasing access to these services. 

We also are concerned that decreased access to mental health and substance use care 

could result from increased demand and utilization that occurs without a corresponding

increase in providers. In 2008, when Massachusetts significantly expanded health 

coverage, we saw that demand, particularly for primary care, increased substantially and 

beneficiaries had major problems accessing care. While the implementation of the 

MHPAEA is not exactly analogous to Massachusetts’ efforts, we urge the agencies to 

carefully consider the potential for dramatic decreases in access to care as a result of 

increased demand and utilization and reductions in benefits, as discussed above. 

Beneficiaries who suffer from mental health and substance use disorders are among 

the most vulnerable Americans; if they cannot easily access necessary care, or if 

fluctuations in their health benefits occur each year, it will only exacerbate the large 

challenges they already face. 
Ms. Charlene Frizzera

May 26, 2009

Page 3 of 6

Question ii: Are there unique costs and benefits for small entities subject to the 

MHPAEA (that is, employers with greater than 50 employees that maintain plans with 

fewer than 100 participants)? What special consideration, if any, is needed for these 

employers or plans? What costs and benefits have issuers and small employers 

experienced in implementing parity under state insurance laws or otherwise?

Small entities subject to the MHPAEA face unique challenges. They cover fewer 

participants and therefore have a substantially smaller “sample size.” For those entities 

that are subject to “experience rating” for their health insurance, this smaller sample size 

puts them at great risk because they are more vulnerable to aberrant events or 

circumstantial anomalies that occur among the participants they cover. This risk also

exists for medical and surgical benefits, but is unique in relation to mental health and 

substance use benefits. While the law requires plans that offer mental health and 

substance use benefits to offer them at parity, it does not preclude employers from simply 

dropping this coverage all together. If small entities find their risk levels unacceptable, it 

could lead them to drop their mental health and substance use coverage. There are 

certain states that have addressed this problem by providing small entities with state 

funding if they have incurred costs above a certain threshold. While the agencies likely 

cannot do the same, we urge them to carefully consider this unique challenge for 

small entities subject to the MHPAEA and look to states for possible solutions. 

Again, individuals who suffer from mental health and substance use disorders are among 

our most vulnerable populations, and their access to necessary care should not be 

impeded. 

Question 2: What terms or provisions require additional clarification to facilitate 

compliance? What specific clarifications would be helpful?

We have identified several areas where clarification and additional guidance and detail 

are necessary. 

We request clarification as to the entities and types of benefits to which this law 

applies. While it is clear that the MHPAEA does not apply to Medicare, the law’s 

applicability to several other entities, such as Medicare employer-offered plans, Medicaid 

managed care plans, employee assistance plans and student health plans, is unclear. In 

addition, we would like clarification as to whether this law applies to “carve outs.” 

Employers often “carve out” mental health and substance use disorder health benefits and 

integrate them with employee assistance, disability and other benefits, all under a single 

vendor. Are “carve out” benefits subject to the MHPAEA?

The law also includes an exemption provision for group health plans that experience 

certain cost increases as a result of the law. To obtain this exemption, “a qualified and 

licensed actuary” must determine and certify a plan’s costs. However, it is not clear 

exactly what this means. We request clarification as to the exact qualifications the 

actuary will need in order to satisfy the law. 
Ms. Charlene Frizzera

May 26, 2009

Page 4 of 6

We request a more detailed definition of “parity” as it is used in the law.

Specifically, we would like the agencies to explicitly state that parity means “equal to or 

better than.” Certain employers have inquired as to whether or not they can have lower 

copayments for mental health benefits than for medical and surgical benefits, and we 

would like the agencies to make it abundantly clear that such benefits are acceptable. 

We also would like more detailed definitions of other terms, including “no more 

restrictive than,” “predominant” and “substantially all.” For example, the law 

defines the “predominant” financial or treatment limit as “the most common or frequent” 

type of limit, but what is the unit of analysis? Does a plan determine the most common 

limit by counting the copayments for each distinct type of benefit as one (e.g., physician, 

inpatient hospital and outpatient hospital)? By looking at how often beneficiaries utilize 

each distinct type of benefit and its associated copayment? By another method? It would 

be extremely helpful if the agencies created a quantifiable definition of this term, as well 

as a quantifiable definition of the term “substantially all.” Similar additional guidance on 

the other terms also would be useful. 

In addition, the law states that financial requirements and treatment limits for 

mental health or substance use disorder health benefits can be no more restrictive 

than the predominant financial requirements and treatment limits applied to 

substantially all medical and surgical benefits covered by the plan. However, we 

request clarification on how this comparison should be made. For copayments, for 

example, would each plan compare a certain medical and surgical benefit to its analogous 

mental health or substance use benefit and then apply that same or better copayment to 

the analogous mental health or substance use benefit? This approach seems to be the 

most appropriate method for making the comparison. 

Some mental health and substance use treatment settings are not directly analogous to 

medical and surgical treatment settings. We request that the agencies provide a formal 

crosswalk that links medical and surgical benefits to their most analogous mental health 

or substance use benefits. Table 1 gives our suggestions of the most appropriate linkages.

While this is not an all inclusive list of mental health and substance use services, it 

provides examples along the continuum.

Table 1: Suggested Linkages of Medical and Surgical Benefits to Their Most Analogous Mental 

Health or Substance Use Benefits

Medical and surgical benefit Mental health or substance use benefit

Primary care physician visits Psychiatrist visits

Inpatient general acute hospital treatments Inpatient psychiatric hospital treatments

Outpatient hospital treatments Partial hospitalization program

Intensive outpatient program

Electroconvulsive therapy treatments

Skilled-nursing facility treatments Psychiatrically based residential treatments 3
Ms. Charlene Frizzera

May 26, 2009

Page 5 of 6

In addition, this type of crosswalk would encourage plans to integrate their mental health 

and substance use disorder benefit and medical and surgical benefit structures into one 

benefit structure, where an inpatient hospitalization is simply considered an inpatient 

hospitalization, whether it is for psychiatric or general acute care. By no longer thinking 

of mental health and substance use and medical and surgical as two distinct types of 

health care benefits, we can make progress toward overcoming the stigma and 

discrimination often associated with mental health and substance use disorders. 

We also request that the agencies clarify how plans will be required to treat 

deductibles under the MHPAEA. The financial requirements for mental health or 

substance use disorder benefits can be no more restrictive than the predominant financial 

requirements applied to medical and surgical benefits. However, under this provision, 

can plans continue to have separate deductibles for both mental health or substance use

disorder benefits and medical and surgical benefits, as long as they are at parity? If this is 

the case, we urge the agencies to carefully consider what alternative protections they can 

provide to help ensure that this additional deductible does not impair beneficiaries’ access 

to these critical mental health and substance use disorder benefits.

In regard to the preservation of state law under the MHPAEA, the current Health 

Insurance Portability and Accountability Act of 1996 pre-emption standard will still 

apply. This standard is extremely protective of state law, and only a state law that 

“prevents the application” of the MHPAEA will be pre-empted, which means that 

stronger state parity and other consumer protection laws will remain in place. However, 

in many cases it is not clear whether a state law will be pre-empted. For example, there 

are certain state laws that address parity for mental health benefits, but do not address 

parity for substance use disorder benefits – what is the relation of the MHPAEA to this 

type of state law? Therefore, we request the agencies provide guidance to the states 

on which state laws are and are not pre-empted. 

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?

The law exempts group health plans that experience certain cost increases as a result of 

the law. When plans obtain this cost exemption, they do not have to comply with the 

provisions of the parity law. However, we urge the agencies to clarify that this 

exemption does not mean that these plans must stop offering mental health and substance 

use disorder benefits, but rather that they simply do not have to offer them at parity to 

medical and surgical benefits. 

Plans must comply with the law for at least the first plan year in which the law applies

because determinations are made after the first six months of the plan year involved, and 

the exemption applies for the following year. If a plan obtains an exemption for the 

second plan year, it will then have to comply with the law for the third plan year in order 
Ms. Charlene Frizzera

May 26, 2009

Page 6 of 6

to obtain an exemption for the fourth plan year, and so on, because, again, determinations 

are made after the first six months of the plan year involved and the exemption applies 

for the following year. Therefore, the potential exists for certain plans to change their 

mental health and substance use disorder health benefit structures every other year as 

they obtain a cost determination and exemption in one year and then have the exemption 

in place for the next year. This cycle of compliance and exemption could put an undue 

burden on providers and cause significant and inappropriate disruptions to beneficiaries, 

as also discussed in response to “Question i,” above. We urge the agencies to give 

careful consideration to the potential for such increased administrative burden and 

disruption.

These cycles of compliance and exemption will likely increase plan costs; however, these 

increased costs should not be permitted to be included in the costs considered when 

seeking an exemption. In addition, given the substantial disruptions that these cycles 

could cause, we ask the agencies to provide a detailed outline of the process by which 

plans will notify employers, providers and beneficiaries of the exemption, including 

the timeframes in which these notifications must be made. We also urge the agencies 

to consider mandating that beneficiaries in plans that obtain an exemption for the 

following year must have an open enrollment period that will allow them to change plans 

for the following year.

Finally, model notices would be useful to facilitate disclosure of the plan’s election to 

implement the cost exemption. We thank the agencies for making this effort.

If you have any questions, please feel free to contact me or Joanna Hiatt, senior associate

director for policy, at (202) 626-2340 or jhiatt@aha.org.

Sincerely,

Rick Pollack

Executive Vice President