Insurance Coverage and Parity for Mental Health and Substance Use Disorder Services

All fully insured health plans sold to individuals, small employer groups, and large employer groups must include benefits for mental health and substance use disorder (MH/SUD) services. These benefits must be provided at the same level as benefits provided for physical illness, also known as "parity." Self-funded health plans (commonly provided by large employers) aren’t required to cover MH/SUD services. If they do include this coverage, it must be provided in parity with benefits for physical illness.

Sometimes it can be difficult to determine whether your health plan is fully insured or self-funded, since self-funded plans are commonly administered by health insurance companies. If your plan is fully insured, your ID card will say "TDI" or "DOI." The Texas Department of Insurance regulates fully insured plans, while the federal Department of Labor regulates self-funded plans, which are exempt from state regulation under the Employee Retirement Income Security Act. To learn more about the regulation of self-funded plans, visit www.dol.gov/ebsa/mentalhealthparity/.

Definition of Parity

Parity requires health plans that cover MH/SUD services to provide the same level of coverage for MH/SUD as is provided for physical health care services, with respect to:

  • annual and lifetime limits on coverage;
  • financial requirements: deductibles, copayments, coinsurance, out-of-pocket expenses;
  • treatment limitations: limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment; and
  • availability of coverage for benefits provided by out-of-network providers.

Coverage terms that limit MH/SUD benefits must be comparable to, and applied no more stringently than, limits for medical benefits. This includes the processes and standards used to apply the limit.

Treatment Denials

If treatment is denied or if you are approved for a lower level of treatment than your provider prescribed, you have the right to appeal with your health plan. Your provider may also file an appeal on your behalf. You or your provider may also file a complaint with TDI. If your health plan denies your appeal on the basis of medical necessity or a determination that the treatment is experimental or investigational, you may appeal your health plan's decision to an independent review organization. Make sure you follow your health plan's appeals process and the deadlines for filing your appeal. Read more about complaints and appeals below. Also read the National Alliance on Mental Illnesses’ tips for what to do if you're denied care by your insurance.

State and Federal Standards

State parity standards are closely aligned with the Mental Health Parity and Addiction Equity Act, but don’t include the additional standards incorporated within federal rules. One difference is the definition of treatment limitations. MHPAEA and Texas rules say that parity is required with respect to plan limits on the frequency of treatment, the number of visits, or the days of coverage. Federal rules say that parity must also exist with respect to other ways that a plan may limit the scope or duration of benefits, known as nonquantitative treatment limits.

Nonquantitative treatment limits include:

  • medical management standards limiting benefits based on medical necessity or a decision that a treatment is experimental or investigational;
  • formulary design;
  • for plans with multiple network tiers, network tier design;
  • standards for provider admission to participate in a network, including reimbursement rates;
  • plan methods for determining usual, customary, and reasonable charges;
  • step therapy protocols or fail-first policies;
  • exclusions based on failure to complete a course of treatment; and
  • restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for covered services.

Since state standards don’t mention nonquantitative treatment limits, federal regulators are responsible for enforcing these standards.

Under MHPAEA and Texas rules, parity applies only to large employers. However, the Affordable Care Act expanded parity requirements to apply to plans sold to individuals and small employer groups. Since state standards don’t address individual and small employer plans, federal regulators are responsible for enforcing parity issues in these markets.

Resources

Consumer Rights and Protections

Health plans that use preferred provider networks (including PPOs, EPOs, and HMOs), must include enough providers within the plan's service area to allow enrollees reasonable access to in-network providers capable of providing all of the benefits covered under the plan, including:

  • emergency care at all times;
  • urgent care within 24 hours;
  • routine care within two weeks for behavioral health conditions (three weeks for medical);
  • primary care within 30 miles (or 60 miles in rural areas for PPOs and EPOs); and
  • specialty care (including MH/SUD) within 75 miles.

In areas where providers aren’t available to contract, the health plan must set up a plan that says how enrollees can access needed services without paying more.

In an HMO plan -- where primary care providers act as "gatekeepers" to access to specialty providers -- an enrollee with a chronic, disabling, or life threatening illness may apply to use a nonprimary care physician specialist as a PCP.

Appeals of Adverse Determinations (Denials of Coverage)

Medical necessity determinations are made through a system of utilization reviews and upon appeal are reviewed by independent review organizations (IROs). Utilization review agents (URAs) must base the frequency of review on the severity or complexity of patient’s condition and may not impose unnecessary or unreasonable repetitive contacts on the patient or provider. A URA's review criteria must be:

  • objective,
  • clinically valid,
  • compatible with established principles of health care, and
  • flexible enough to allow deviation from the norm when justified on a case-by-case basis.

Before deciding on the medical necessity or the experimental or investigational nature of a health care service, the URA must give the provider a chance to talk with a doctor about the patient's treatment plan and the URA's clinical basis for the adverse determination. When issuing an adverse determination, the notice must:

  • include the principal reasons, clinical basis, and description or source of screening criteria used in making the adverse determination;
  • describe the complaint and appeal process; and
  • notify the enrollee of the right to appeal to an independent review organization (IRO).

An enrollee, a person acting on their behalf, or the enrollee’s provider may appeal an adverse determination. If the plan denies the appeal, the plan must provide a notice that includes the clinical basis for the denial, the specialty of the provider making the denial, and the appealing party's right to appeal to an IRO. If the provider believes the case should be reviewed by a particular type of specialty provider, the provider may request a specialty review applicable to the treatment under review.

In a life-threatening circumstance, the enrollee is entitled to an immediate appeal to an IRO without involving the URA's internal appeals process. 

Relevant Laws

Texas Laws

Federal Laws

Complaints

If a patient or provider believes a health plan is violating the law or isn’t administering the health plan according to the contract, they should file a complaint with TDI. TDI relies on complaints to learn of violations and identify issues that warrant enforcement actions. Consumers or providers may file a complaint with TDI regarding an insurer, HMO, IRO, or URA using TDI's Online Complaint Portal at www.tdi.texas.gov/consumer/complfrm.html. For more help, call TDI’s Consumer Help Line at 1-800-252-3439.



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Last updated: 10/24/2016