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A new interim report to Congress continues to confirm that parity coverage of mental health services within managed care is affordable, Senators Pete Domenici (R-N.Mex.) and Paul Wellstone (D-Minn.) announced at a press conference in Washington, D.C., last month.
The report by the National Advisory Mental Health Council (NAMHC), titled "Parity in Coverage of Mental Health Services in an Era of Managed Care," makes the case that parity is not only affordable, but actually saves money on health care, Domenici said. Parity "in combination with managed care results in lower costs and lower premiums within the first year of implementation," he commented.
While the report is preliminary and hence not conclusive, it "is good news," he said.
The NAMHC is chaired by National Institute of Mental Health (NIMH) Director Steven Hyman, M.D., and cochaired by Rex Cowdry, M.D., NIMH's acting deputy director. Other members include psychiatrists and academics from a variety of public and academic institutions.
The report to Congress was required by the 1997 Labor, Health, and Human Resources Appropriations Act at Domenici's request. Last year Congress passed the Mental Health Parity Act, coauthored by Domenici and Wellstone. Although the law fails to require plans to cover mental illness, it mandates that if they offer any mental health benefits, the annual aggregate and lifetime limits for mental health services cannot differ from those for other health services. The law does, however, permit health plans to manage the benefit as they see fit, allowing different deductibles, copayments, and visit limits for mental health care versus other health care. It subjects treatment for mental illness to medical necessity criteria in determining what will be covered.
The law takes effect on January 1, 1998.
Alluding to the legislation, Domenici commented that "this report is a step in the overall examination of parity in an era of managed care, just as the new parity law is just the first step in trying to end the discrimination in care against those with mental illnesses."
With 75 percent of Americans now under some form of managed care, it is critical to look at how experience with mental health parity under managed care affects costs, Domenici said. But it is not enough to look only at costs; it is also necessary to consider how providing such services under managed care affects the quality of care, he added.
The report looked at health plans with parity mental health services in Rhode Island, Texas, and Maryland and found either minimal cost increases within the first year or more or, in the case of Texas, a marked decrease in cost of care.
The experience of Texas was particularly striking in that between 1992 and 1995 there was a 47.9 percent decrease in cost of care for 170,000 enrollees in managed plans, which included variants of fee for service, preferred provider organizations, and point of service.
"This level of decrease is consistent with other mental health premium decreases seen when managed behavioral health care companies enter an unmanaged indemnity market," the report notes.
One of the key findings was that incorporating mental health services at parity results in shorter lengths of stay when people are hospitalized, Domenici commented.
While the current interim report stresses the cost experience of health plans with inclusive mental health services, there is a broader societal benefit to such services, Domenici observed. Various studies have shown that treating mental illness yields $3 to $9 in enhanced productivity for every $1 spent, Domenici said. There is a "direct correlation between mood disorders and work productivity," said Domenici.
The findings should be integrated into current efforts to promote comprehensive health insurance coverage for children, said Wellstone. Congress has been wrestling with a number of bipartisan proposals for insuring uninsured children, and some observers are optimistic that legislation in this area will be passed soon (Psychiatric News, May 2).
The report is "a huge, huge start" in remedying undertreatment, said Wellstone. "Only old data and old ideas keep us from covering mental illnesses the same way we cover any medical condition.
"There is no sound basis for denying access to care to those with serious mental illness," said NIMH Director Hyman. Denying care to people on the basis of the organ affected is not science but discrimination, he asserted.
Parity in mental health services will be achieved only under managed care, said Darrel Regier, M.D., NIMH's associate director of epidemiological and health policy research. The discrepancy between older cost estimates and those in the NAMHC report were based on the "formerly standard fee-for-service models that are no longer valid for a market now dominated by managed care," he noted.
In addition to showing that parity mental health care is affordable, the report "suggests that parity legislation, intended to reduce discriminatory health insurance restrictions for people with mental disorders and improve their care, may also encourage insurance companies to introduce managed behavioral health care wherever it is not already in place," Regier observed.
Managed care may, "at its best," cut costs and result in "appropriate and comprehensive treatment for those with a clear need for care," he said.
Despite his staunch support for mental health parity, said Domenici, he still believes that where possible "it is best to leave the delivery of care to the marketplace."
Care managers must "know what to expect" before they will be receptive to providing enhanced mental health benefits, said Regier. Absent clear, data-derived expectations, they may overreact to even partial parity mandates by reducing access to mental health services.
The NAMHC is continuing data collection and will produce a final report early next year, according to Regier.
(Psychiatric News, May 16, 1997)