Understanding Behavioral Health Insurance Parity: History, Overview and Interactive Discussion of Federal and State Parity Requirements

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1 Understanding Behavioral Health Insurance Parity: History, Overview and Interactive Discussion of Federal and State Parity Requirements John V. Tauriello, Senior Counsel, Brown & Weinraub PLLC 6/29/15

2 Mental Health Parity Act of 1996 Required parity between Mental Health insurance benefits and medical/surgical health benefits ONLY in: -Aggregate lifetime and annual dollar limits -for group health plans and coverage offered in connection with a group health plan -Mental health only (not applicable to SUD benefits) - Important because first parity law, but largely symbolic MHPA expired on Dec. 31, 2002.

3 Timothy s Law (2006)- Overview Timothy s Law requires most group health insurance policies to provide a minimum of 30 inpatient days and 20 outpatient visits for the treatment of mental, nervous or emotional disorders or ailments(previously only a make available for such coverage) The law also requires large group health insurance policies (more than 50 employees/members) that provide medical/physical health coverage for insured beneficiaries to provide "comparable" mental health coverage (i.e., the same benefits, copays, deductibles, limits, etc.). Two categories: adults diagnosed with biologically based mental illness and children with serious emotional disturbances ).

4 The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) MHPAEA-amended the Public Health Service Act, ERISA (private self-insured plans), and the Internal Revenue Code. The Departments of Labor, HHS, and Treasury (IRS) share enforcement jurisdiction over MHPAEA (muh PEA uh) Interim final rules under MHPAEA were published on February 2, 2010 and rules generally became applicable for plan years beginning on or after July 1, Final rules were published on November 13, Effective Date of Final Rules -generally applicable for plan or policy years beginning on or after July 1, 2014.

5 Mental Health Parity and Addiction Equity Act- Overview (45 CFR Part 146) Applicability included SUD service parity for the first time Financial Requirements & Treatment Limitations Non-quantitative Treatment Limitations (NQTLs) -Final regulation removed the clinically appropriate standard of care exception in interim regs. Disclosure Requirements Enforcement (Federal and State )

6 Who is Exempt from the MHPAEA Small employer exemption -Small private employers employing 50 or fewer employees. -Non-Federal governmental plans with 100 or fewer employees. Individual plans. Opt-out for self-funded non-fed governmental plans Increased cost exemption-formula 2%/ 1% increases

7 Affordable Care Act Impact on MHPAEA The ACA extended MHPAEA to apply to non-grandfathered individual and small group health insurance policies and contracts (already in effect before March 23, 2010) The ACA also required qualified health plans (QHPs) under the Health Exchanges to include mental health and substance use disorders as one of the ten categories of Essential Health Benefits (EHBs). Generally, individual and small group health insurance coverage delivered or issued for delivery in New York that is required to include EHBs, also must comply with the requirements of MHPAEA.

8 Mental Health Parity and Addiction Equity Act (MHPAEA) General Rule Insurers must ensure that the financial requirements and treatment limitations for MH/SUD benefits in a classification are no more restrictive than the predominant financial requirements or treatment limitations of the same type as is applied to substantially all covered med/surgbenefits within the same classification. Compliance with MHPAEA requires a comparison between MH/SUD benefits within a specific classification with medical/surgical benefits in the same classification.

9 Terms to Remember: Classification of benefits Financial requirements (deductibles, copayments, coinsurance, and out-of-pocket maximums) Quantitative treatment limitation (annual, episode, and lifetime day and visit limits) Level of a type of financial requirement or treatment limitation (i.e. magnitude, such as different levels of coinsurance or copayments), Coverage unit (e.g. self-only, family)

10 Mental Health Parity and Addiction Equity Act Six Benefit Classifications: Inpatient in-network Inpatient out-of-network Outpatient in-network (office visits and all other outp t) Outpatient out-of-network (office visits and all other) Emergency services Prescription drugs

11 Sub-classifications The two sub-classifications permitted are: (A) Office visits (i.e., physician visits); and (B) All other Outpatient (items and services, such as outpatient surgery, facility charges for day treatment centers, laboratory charges, or other medical items). Separate sub-classifications for generalists and specialists are not permitted.

12 MHPAEA -General Parity Requirement Health insurance coverage that provides both med/surgand BH benefits may not: -apply any financial requirement or treatment limitationto BH benefit - in any classification - that is more restrictive than - the predominant financial requirement or treatment limitation of the same type that is - applied to substantially all medical/surgical benefits - in the same classification.

13 Financial Requirements and Quantitative Treatment Limitations A group health plan and a health insurance issuer offering health insurance coverage in the group or individual market must ensure that Financial requirements (such as copays and deductibles) and Treatment limitations (such as visit limits) applicable to mental health or substance use disorder (MH/SUD) benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits.

14 Financial Requirements and Quantitative Treatment Limitations- Definition of Substantially all Substantially all : A type of financial requirement or quantitative treatment limitation is considered to apply to substantially all med./surg. benefits in a classification of benefits if it applies to at least 2/3 of all med./surg. benefitsin that classification. If a financial requirement or quantitative treatment limitation does not apply to at least 2/3 of all med./surg. benefits in a classification, then the financial requirement or quantitative treatment limitation of that type cannot be applied to MH/SUD benefits in that classification. (Slide courtesy US DOL, HHS& Treasury)

15 Calculation of All Med/Surg Benefits Determination of the portion of medical/surgical benefits in a classification of benefits subject to a financial requirement or quantitative treatment limitation is based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. Any reasonable method may be used to determine the dollar amount expected to be paid under a plan for medical/surgical benefits subject to a financial requirement or quantitative treatment limitation.

16 Financial Requirements Substantially All Test Example A plan applies different copays to some of its outpatient, innetwork med./surg. benefits. What copay can the plan apply to outpatient, in-network MH/SUD benefits? Step 1 Apply the Substantially All Test using a reasonable method, the plan projects total med/surgplan year payments (outp tin-network) to be $50 million. The plan projects plan payments for benefits that are subject to a copay to be $40 million. Because $40 million is greater than 2/3 of $50 million, a copay may be applied to MH/SUD benefits. (Slide courtesy US DOL, HHS &Treasury)

17 Financial Requirements and Quantitative Treatment Limitations-Definition of Predominant Predominant : If a type of financial requirement or quantitative treatment limitation applies to at least 2/3 of all medical/surgical benefits, and therefore meets the substantially all test, the next step is to determine the predominant level, i.e., the level that applies to more than ½ of the medical/surgical benefits in that classification that are subject to the financial requirement or quantitative treatment limitation.

18 Financial Requirements- Predominant Predominant Test Example Step 2 Predominant Test The plan applies a $35 copay to some of its med./surg. benefits, and a $20 copay to other benefits. Using the same reasonable method as in the Substantially All Test, the plan projects plan med/surgcosts of $25 million for the benefits to which the $35 copay applies and $15 million for the benefits to which the $20 copay applies. The $35 copay is the predominant copay because it applies to more than half of the med./surg. benefits subject to a copay. Conclusion: the plan may impose any level of a copay for outpatient, in-network MH/SUD benefits that is no more restrictive than the $35 copay. (Slide Courtesy US DOL, HHS & Treasury)

19 Financial Requirements and Quantitative Treatment Limitations Coverage Units Application to different coverage units (e.g., self-only, family): If a plan (or health insurance coverage) applies different levels of a financial requirement or quantitative treatment limitation to different coverage units in a classification of medical/surgical benefits, the predominant level that applies to substantially all medical/surgical benefits in the classification is determined separately for each coverage unit. (Slide courtesy US DOL,HHS & Treasury)

20 Financial Requirements and Quantitative Treatment Limitations No separate accumulation A group health plan (or health insurance coverage offered in connection with a group health plan) may not apply any cumulative financial requirement or cumulative quantitative treatment limitation for MH/SUD benefits in a classification that accumulates separately from any established for medical/surgical benefits in the same classification. [Note: not true under proposed MCO/CHIP rules.] Ex. Cannot have a $500 med/surgdeductible and a $500 MH/SUD deductible.

21 Financial Requirements and Quantitative Treatment Limitations - Multi-tiered tiered Drug Benefits Special rule for multi-tiered prescription drug benefits: If a plan applies different levels of financial requirements to different tiers of prescription drug benefits based on reasonable factors and without regard to whether a drug is generally prescribed with respect to medical/surgical benefits or with respect to MH/SUD benefits, the plan satisfies the parity requirements with respect to prescription drug benefits. Reasonable factors include: cost, efficacy, generic versus brand name, and mail order versus pharmacy pick-up. (Slide courtesy US DOL, HHS & Treasury)

22 Non-quantitative Treatment Limitations (NQTLs) Limitations on coverage that are not quantifiable. Insurers may not impose NQTLs on MH/SUD benefits in any classification unless any processes, strategies, evidentiary strategies, or factors used in applying the NQTL to MH/SUD benefits are comparable to and are applied no more stringently than those applied to medical/surgical benefitsin the same classification, except to the extent that recognized clinicallyappropriate standards of care permit a difference.

23 Non Quantitative Treatment Limitations Examples Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative; Formulary design for prescription drugs; Network tier design or plans with multiple network tiers (such as preferred providers and participating providers); Standards for providers-admission to participate in a network, including reimbursement rates; Plan methods for determining usual, customary, and reasonable charges;

24 Non Quantitative Treatment Limitations Examples Fail-first policies or step therapy protocols; Exclusions based on failure to complete a course of treatment; and Restrictions based on: -geographic location(in and out of network) -facility type, -provider specialty, or -other criteria that limit the scope or duration of benefits or services provided under the plan or coverage.

25 Non Quantitative Treatment Limitations - Examples limitations on inpatient services, ex. threat to self/others, or exclusions for court-ordered or involuntary holds, experimental treatment limitations, service coding, exclusions for services provided by clinical social workers, and network adequacy.

26 NQTL Reimbursement Rates Plans and Insurers may consider many factors in establishing reimbursement rates for providers, including: service type; geographic market; demand for services; supply of providers; provider practice size; Medicare reimbursement rates; and training, experience and licensure of providers.

27 NQTL Reimbursement Rates con t However, these factors must be applied comparably to and no more stringently thanthose applied with respect to medical/surgical services. Disparate results alone do not mean that the NQTLs in use fail to comply with these requirements. The Departments (Labor, Treasury and HHS) may provide additional guidance if questions persist with respect to provider reimbursement rates.

28 NQTL Network Tier design Multiple network tiers. If a plan or health insurer provides benefits through multiple tiers of in-network providers (such as an in-network tier of preferred providers with more generous cost-sharing to participants than a separate of participating providers), the plan may divide its benefits furnished on an in-network basis into sub-classifications. Such tieringmust be based on reasonable factors (such as quality, performance, and market standards) and without regard to whether a provider provides services with respect to med/surg benefits or MH/SUD benefits.

29 Network Tier design After the sub-classifications are established, the plan or issuer may not impose any financial requirement or treatment limitation on mental health or substance use disorder benefits in any sub-classification that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the subclassification.

30 NQTL HHS Example: Prior Authorization Permissible prior authorization criteria: A plan could establish prior authorization criteria for inpatient treatment based on a service being high cost, experiencing rapid growth in costs from historical trends, and high variation across providers in terms of lengths of stay. Consistent application of these prior authorization criteria could result in permissible differences in management of MH/SUD and med/surg. benefits within a given classification. (However, differences also may shine a light on areas to review more closely.)

31 NQTL Q&A from DOL, HHS and Treasury Q6: A plan applies concurrent review to inpatient care where there are high levels of variation in length of stay (as measured by a coefficient of variation exceeding 0.8). In practice, the application of this standard affects 60 percent of mental health conditions and substance use disorder conditions, but only 30 percent of medical/surgical conditions. Is this permissible? Yes. The evidentiary standard used by the plan is applied no more stringently for mental health and substance use disorder benefits than for medical/surgical benefits, even though it results in an overall difference in the application of concurrent review for mental health conditions or substance use disorders than for medical/surgical conditions.

32 Special Rules Under MHPAEA A plan scriteria for medical necessity determinations, or reasons for denialof MH/SUD benefits must be made available to any current or potential participant, beneficiary, or contracting provider upon request. Intermediate level of services (e.g., skilled nursing, home health, residential treatment for substance use disorders) must be treated consistently between medical/surgical benefits and MH/SUD benefits and placed in the same classification for both. If a plan or issuer treats home health care as an outpatient med/surgbenefit, then covered intensive outpatient MH/SUD services and partial hospitalization must be considered outpatient BH benefits.

33 Special Rules Under MHPAEA Sub-classifications besides outpatient (office visit/all other outpatient), such as those based on generalists/specialists, are NOT permitted. If a plan covers mental health or substance use disorder benefits in one of the six classifications, the plan must provide coverage in all of the classifications in which medical/surgical benefits are available. Example: if a plan provides some BH benefits and provides medical/surgical benefits on an outpatient basis, it may not limit MH/SUD benefits to inpatient care only.

34 Enforcement States have enforcement responsibility for health issuers and large group and individual market (NYS DFS). [NOTE: MHPAEA does NOT preempt State insurance laws requiring parity for, or mandating coverage of, mental health or substance use disorder benefits, EXCEPT to the extent such laws prevent the application of a requirement of MHPAEA.] HHS has secondary enforcement, as well as non-fed Gov t plans (sponsored by State or local gov ts). DOL and the Treasury generally enforce these requirements for private, employment-based group health plans.

35 Continuing Impact of Timothy s Law The Federal parity law and Timothy s Law work together to provide expanded parity protections. The federal lawrequires parity if mental health coverage is provided, but unless required as an Essential Health Benefit, itmay notactuallyrequire employers to provide mental health coverage. Without Timothy s Law, plans could beexempt from providing any BH benefits if they became exempt under the federal requirementsdue to a cost increase of 2% or more the first year, or 1% increase in subsequent years.

36 Continuing Impact of Timothy s Law Federal parity law allows mental health and substance abuse benefits to be defined by the health plan, but the definition must be consistent with state and federal law. While Timothy s Law does not specifically define mental health or SUD benefits, it requires thenyscommissioner of DFS to ensure that the definition is not unreasonable and itties that definition to the BH coverage provided to public employees under the Empire Plan. Without Timothy s Law plans potentially could limit their mental health benefits bymorenarrowlydefining mental health and SUD benefits.

37 DFS Insurance Circular Letter No. 5 (2014) Entitled: Impact of Mental Health Parity and Addiction Equity Act of 2008 ( MHPAEA ), Affordable Care Act ( ACA ), and the MHPAEA Final Rule on Mental Health and Substance Use Disorder Benefits in New York s Health Insurance Market. A great resource to better understand the combined State and Federal MH/SUD parity requirements.

38 MCO/ CHIP Proposed Regulations -General Published April 1, comments were due June 9 This proposed rule generally mirrors the policies set forth in the MHPAEA final regulations to implement the statutory provisions that require MCOs, ABPs (Medicaid benchmark and benchmark-equivalent plans) and CHIP to comply with mental health parity requirements. Effective Date: 18 months after the publication of the Final regulations.

39 Stated Goal of MCO Proposed Regulations If MH/SUD state plan services are provided to MCO enrollees through a prepaid inpatient health plans (PIHPs), prepaid ambulatory health plans (PAHPs), fee-for-service, or under Medicaid FFS carve out, MCO enrollees will receive the MHPAEA parity protections for MH/SUD state plan services. Federal Dep tsspecifically solicited comments on whether to require all state plan MH/SUD services be included under MCO contracts. Feds propose to ensure that all enrollees of the MCO are provided access to a MHPAEA-compliant set of services whenever the state plan includes at least some MH/SUD services.

40 MCO Proposed Regulations Do not apply mental health parity requirements to Medicare services covered by MCOs for those dually eligible for Medicare and Medicaid. Medicare benefits are controlled by the Medicare statute and regulations. Regardless of whether services are delivered in managed care or non-managed care arrangements all CHIP plans are required to meet the financial requirements and treatment limitations component of the mental health parity provisions.

41 MCO Proposed Rules -Transparency Under MHPAEA and the proposed federal Medicaid managed care regulations (42 CFR 438 Subpart F), the criteria for medical necessity determinations made under the plan for mental health or substance use disorder benefits must be made available by the plan administrator to any current or potential participant, beneficiary, or contracting provider upon request. The reasons for any denial of reimbursement or payment with respect to mental health or substance use disorder benefits must be provided to plan participants and beneficiaries upon request within a reasonable time.

42 How MCO Proposed Rule Differs from MHPAEA Four classifications rather than six Out of network inpatient and out of network outpatient are removed. The proposed rule does not include an increased cost exemption for MCOs the 2%/1% cost increase exemption. The State has the responsibility of identifying what is a covered benefit for MCOs and CHIP, which differs from the MHPAEA final regulations where medical/surgical benefits are defined under the terms of the plan or policy and in accordance with applicable federal or state law.

43 Reasons for 4 (not 6) Classifications Under cost-sharing requirements for Medicaid managed care, the dollar amount the beneficiary pays varies by income, not whether services are received through an in-network model. If a managed care plan s provider network is unable to provide necessary services covered under the contract to a particular enrollee, the MCO must timely and adequately cover these services out-of-network for the enrollee for as long as the MCO, PIHP or PAHP is unable to provide them in network. Feds are proposing to add access to out-of-network providers to the illustrative list of NQTLs.

44 How MCO Proposed RegDiffers from MHPAEA General parity requirement prohibits a MCO or CHIP state plan from applying any financial requirement or treatment limitation to MH/SUD benefits in any classification that is more restrictive than the predominant financial requirement or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification Under proposed rules financial requirements or quantitative treatment limitations may accumulate separately for medical/surgical and MH/SUD services as long as they comply with the general parity requirement.

45 Reason for Separate Accumulation of Financial Requirements or Treatment Limitations Articulated Reason: Under Medicaid, the state determines which entities will provide the specific medical/surgical and MH/SUD benefits covered under their respective contracts, including if some services will be provided under FFS. These potentially complex service delivery arrangements in Medicaid in turn determine whether the MCO exclusively or the state have the responsibility for complying with parity requirements. The MCOs will have difficulty administering unified treatment limits that accumulate across entities with which the MCO has no contractual relationship.

46 How MCO Proposed RegDiffers from Current Law Inpatient UM Current Medicaid regulations prescribe requirements for the control of utilization management of inpatient services in mental hospitals ( ) -require medical/other professionals to evaluate each beneficiary's need for admission into inpatient services in a mental hospital. There is not a similar requirement for the Medicaid agency to review medical/surgical admissions to other hospitals. States have indicated that the existing regulation presents challenges to achieving parity for inpatient services rendered in a mental hospital.

47 How MCO Proposed RegDiffers from Current Law Inpatient UM con t This proposed rule would eliminate current language from existing regulations that require Medicaid agencies to evaluate the need for these inpatient admissions. A state could continue these evaluations, but would need to ensure that the standards and processes were consistent with the provisions in this regulation regarding non-quantitative treatment limits (comparable to & not more stringent than med/surg).

48 MCO Proposed Rules -Examples of NQTLs (i) Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or whether the treatment is experimental or investigative; (ii) Formulary design for prescription drugs; (iii) Network tier design for MCOs with multiple network tiers (such as preferred providers and participating providers); (iv) Standards for provider admission to participate in a network, including reimbursement rates;

49 MCO Proposed Rules-Examples of NQTLs MCO methods for determining usual, customary, and reasonable charges; Refusal to pay for higher-cost therapies until shown that a lower-cost therapy is not effective (fail-first policies or step therapy protocols); Exclusion based on failure to complete course of treatment; Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under MCO; and Standards for providing access to out-of-network providers.

50 MCO Proposed Rules Multi Multi-tiered tiered Drugs Multi-tiered prescription drug benefits. An MCO can apply different levels of financial requirements to different tiers of prescription drug benefits, based on reasonable factors. Factors must be comparable to, and applied no more stringently than med/surg benefits. Must be without regard to whether a drug is generally prescribed for med/surg benefits or MH/SUD benefits. Reasonable factors include:cost, efficacy, generic versus brand name, and mail order versus pharmacy pickup/delivery.

51 MCO Proposed Rules: Sub-classifications The two sub-classifications permitted are: (A) Office visits (such as physician visits); and (B) All other outpatient items and services (such as outpatient surgery, facility charges for day treatment centers, laboratory charges, or other medical items). Separate sub-classifications for generalists and specialists are not permitted.

52 Examples Under Proposed Rules Example 1. Facts.A MCO requires prior approval that a course of treatment is medically necessary for outpatient medical/surgical and MH/SUD benefits and uses comparable criteria in determining whether a course of treatment is medically necessary. For MH/SUD treatments that do not have prior approval, no benefits will be paid; for medical/surgical treatments that do not have prior approval, providers will only receive a 25 percent reduction in payments for these treatments from the MCO.

53 Examples Under Proposed Rules Example 1. Conclusion.In this example, the MCO violates the NQTL provision of this proposed rule. Although the same NQTL medical necessity is applied both to MH/SUD benefits and to medical/surgical benefits for outpatient services, it is not applied in a comparable way. The penalty for failure to obtain prior approval for MH/SUD benefits is not comparable to the penalty for failure to obtain prior approval for medical/surgical benefits.

54 Examples Under Proposed Rules Example 2. Facts.A MCO generally covers medically appropriate treatments. For both medical/surgical benefits and MH/SUD benefits, evidentiary standards used in determining whether a treatment is medically appropriate are based on recommendations made by panels of experts with appropriate training and experience in the fields of medicine involved. The evidentiary standards are applied in a manner that is based on clinically appropriate standards of care for a condition.

55 Examples Under Proposed Rules Example 2. Conclusion.In this example, the MCO complies with the NQTL provision of the proposed rule because the processes for developing the evidentiary standards used to determine medical appropriateness and the application of these standards to MH/SUD benefits are comparable to and are applied no more stringently than for medical/surgical benefits. This is the result even if the application of the evidentiary standards does not result in similar numbers of visits, days of coverage, or other benefits utilized for MH/SUDs as it does for any particular medical/surgical condition.

56 Examples Under Proposed Rules Example 3 Facts.Training and state licensing requirements often vary among types of providers. An MCO applies a general standard that any provider must meet the highest licensing requirement related to supervised clinical experience under applicable state law in order to participate in the MCO's provider network. Therefore, the MCO requires master's-level mental health therapists to have postdegree, supervised clinical experience but does not impose this requirement on master's-level general medical providers because the scope of their licensure under applicable state law already requires supervised clinical experience.in addition, the MCO does not require post-degree, supervised clinical experience for psychiatrists or Ph.D. level psychologists since their licensing already requires supervised training

57 Examples Under Proposed Rules Example 3. Conclusion.In this example, the MCO complies with the provision of this proposed rule pertaining to NQTLs. The requirement that master'slevel mental health therapists must have supervised clinical experience to join the network is permissible, as long as the MCO consistently applies the same standard to all providers, even though it may have a disparate impact on certain mental health providers.

58 Examples Under Proposed Rules Example 4. Facts.A MCO provides coverage for medically appropriate medical/surgical benefits, as well as MH/SUD benefits. The MCO excludes coverage for inpatient SUD services when obtained outside of the state. There is no similar exclusion for medical/surgical benefits within the same classification.

59 Examples Under Proposed Rules Example 4. Conclusion.In this example, the MCO violates the NQTL provisions of this proposed rule. The MCO is imposing a NQTL that restricts benefits based on geographic location. Because there is no comparable exclusion that applies to medical/surgical benefits, this exclusion may not be applied to MH/SUD benefits.

60 Examples Under Proposed Rules Example 5. Facts.A state's CHIP program requires prior authorization for all outpatient MH/SUD services after the ninth visit and will only approve up to 5 additional visits per authorization. For outpatient medical/surgical benefits, the state's CHIP program allows an initial visit without prior authorization. After the initial visit, benefits must be preapproved based on the individual treatment plan recommended by the attending provider based on that individual's specific medical condition. There is no explicit, predetermined cap on the amount of additional visits approved per authorization.

61 Examples Under Proposed Rules Example 5. Conclusion.In this example, the state's CHIP program violates the NQTL provisions of the proposed rule. Although the same NQTL prior authorization to determine medical appropriateness is applied to both MH/SUD benefits and medical/surgical benefits for outpatient services, it is not applied in a comparable way. While the state CHIP plan is more generous in the number of visits initially provided without pre-authorization for MH/SUD benefits, treating all MH/SUDs in the same manner, while providing for individualized treatment of medical conditions, is not a comparable application of this NQTL.

62 Examples Under Proposed Rules Example 6. Facts.In cases where an MCO is unable to provide necessary outpatient services to a particular enrollee, the MCO requires that the enrollee must get prior approval in order to see any outpatient out-of-network provider. The MCO approves the use of an out-of-network provider for medical/surgical outpatient services if there is not an in-network provider within 10 miles of the person's residence. Approval of an out-of-network provider for outpatient MH/SUD services is only authorized if there is not an in-network provider within 30 miles of a person's residence.

63 Examples Under Proposed Rules Example 6.Conclusion. In this example, the MCO violates the NQTL provisions of this proposed rule. The MCO is imposing a restriction that limits access to out-of-network providers. Although the same nonquantitative treatment limitation is applied to both the MH/SUD benefits and to medical/surgical benefits for outpatient services, it is not applied in a comparable way.

64 MCO Proposed Rules -State responsibilities In any instance where the full scope of medical/surgical and MH/SUD services are not provided solely through the MCO, the State must review the MH/SUD benefits provided in the MCO or FFS state plan service to ensure the full scope of services available to all enrollees of the MCO complies with the MH/SUD parity requirements.

65 MCO Proposed Regulations- State Responsibilities The Feds propose to allow states to include the cost of providing services beyond what is specified in the state plan, which may include adding services or removing or aligning treatment limitations in managed care benefits into the actuarially sound rate methodology, so long as those services beyond what is specified in the state plan are necessary to comply with mental health parity requirements. Therefore, the Medicaid program rather than the plans will bear the costs of these changes to ensure parity.

66 State Law-Utilization Review Articles 49 of the NY Insurance Law and Public Health Law establish the requirements for health plans medical reviews to determine medical necessity and level of care determinations. Right to both internal and external appeals for denials. Chapter 41 of the Laws of 2014 further amended State law to provide enhanced UR protections for SUD treatment.

67 New SUD Utilization Review Requirements Health Plans are required to use recognized evidence-based and peer-reviewed clinical review criteria that are age appropriate, and are approved by OASAS. Health Plans are strongly encouraged to use LOCADTR tool, but may submit alternate criteria to OASAS for approval. (See Insurance Circular Letter No. 6, March 30, 2015).

68 New SUD Utilization Review Requirements If an expedited internal or external appeal is requested within 24 hours from receipt of the initial denial for SUD services, appeal may not be denied on the basis of medical necessity or prior authorization while that determination is pending. Pre-authorization determinations for outpatient SUD services must be made within 72 hours after receipt of all necessary information. Standard appeals are to be decided within 60 days.

69 Utilization Review External Appeals Chapter 41 provides that an External Appeal for SUD services requires a medical review by a qualified neutral clinical peer reviewer, who must be a physician or board eligible to provide SUD treatment; or a healthcare professional that possesses a valid license, has been practicing for at least 5 years in the treatment of SUD, and is knowledgeable about the service under appeal.

70 Resources -Department of Financial Services Complaints: On the DFS website ( Go to top left of home page where there is an icon to file a complaint. General Questions regarding Parity and Enforcement: 1(800) or (212) Model State BH Contract Language is located at: dx.htm

71 Resources at DFS --UR and Claim Payment For questions regarding utilization review or the external appeal process, call or or For questions regarding claim payments, call or

72 Federal Resources HHS: COBRA/HIPAA hotline number: , Ext ; DOL: 1(866) ; Electronic Inquiries: Treasury: (202)