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MH Parity Under Managed Care Again Found Affordable

A study released last month by the National Advisory Mental Health Council (NAMHC) has strengthened the case that parity for mental health benefits under managed care is affordable, according to APA Medical Director Steven Mirin, M.D., and other parity advocates. (Click here for the report's major conclusions.)

Although the report came as good news to parity proponents, one of parity's strongest champions, New Mexico Senator Pete Domenici (R), said he doubted that a national parity mandate could succeed at this juncture.

"Policies are being ratcheted down" to contain costs, said Domenici. "Parity must be expanded nationally. But I'm not sure we are there yet."

Mirin joined Domenici, Minnesota Senator Paul Wellstone (D), National Institute of Mental Health (NIMH) Director Steven Hyman, M.D., and others at a July 15 press conference on Capitol Hill, to publicize the report's conclusions.

The NAMHC advises the Secretary of Health and Human Services and the directors of the National Institutes of Health and NIMH on "all policies and activities relating to the conduct and support of mental health research, research training, and other [NIMH] programs," according to the NAMHC mission statement. APA past president and current president of the Washington Business Group on Health, Mary Jane England, M.D., chaired the NAHMC liaison report committee, which also included psychiatrist G. Richard Smith, Jr. M.D., a member of APA's Council on Research, and psychologist Michael Hogan, Ph.D., director of the Ohio Department of Mental Health.

"NAHMC has proven what we all know-that parity is affordable, and that past projections about the cost of parity have been, in many cases, wildly overestimated," said Mirin. The report proves that "it is time to provide citizens who suffer from mental illness the same benefits and access to care as those with other serious medical disorders."

The report also shows that poorly managed care "can completely undercut access to mental health services," Mirin added. "Parity doesn't guarantee access. It's also true that access doesn't guarantee quality."

Mirin also called for coverage of substance abuse disorders.

The report concludes that in systems already using managed care, implementing parity raises total health care costs by less than 1 percent over one year. Introducing managed parity in systems not using managed care leads to a 30 percent to 50 percent reduction in total mental health costs over one year.

The report is "extremely important," said Wellstone, who along with Domenici, has been one of Congress's strongest champions for comprehensive parity. Although the report shows parity is affordable under managed care, it also reveals that some managed behavioral health plans continue to deny mental health services to people who need them by imposing constraints not applied to other medical services. The report states that "in some cases in which management has resulted in limited mental health access, decreased work performance, increased absenteeism, and greater use of medical services have been observed."

Denying access to mental health services "is not right-that is not just, that is not fair. That is discriminatory," Wellstone asserted. "The next step we've got to take is to deal with that problem."

Just as other illnesses involve diseased organs, mental illness involves "disease of the brain," said Hyman. What distinguishes mental illness from other illness is the way it is covered by insurance, he added. Given that the report concludes that introducing parity for mental health care has invariably resulted in the imposition of managed care, parity opponents who have predicted runaway costs for parity under traditional fee-for-service plans have based their projections on a fictitious scenario, he said. The "appropriate determination of medical necessity" under managed care makes parity affordable and is compatible with quality care, said Hyman.

Since passage of the Mental Health Parity Act of 1996, which was cosponsored by Domenici and Wellstone, parity advocates have vowed to expand the provisions of that law. The law, which went into effect in January, mandated the elimination of annual and lifetime dollar limits for mental health care for all U.S. group health plans that offer mental health benefits and serve more than 50 employees. But the law excluded coverage for substance abuse, permitted health plans to drop all mental health coverage, permitted health plans to continue to discriminate regarding day and visit limits and higher copayments and deductibles, and allowed employers to opt out if they could show an increase of 1 percent or greater in total annual health premium costs due to mental health parity. Comprehensive parity, which Domenici and Wellstone continue to pursue, and which APA backs, would eliminate these disparities.

The report, "Parity in Financing Mental Health Services: Managed Care Effects on Cost, Access, and Quality," extends the work of a 1997 report, "Parity in Coverage of Mental Health Services in an Era of Managed Care," and was prepared at the request of the U.S. Senate Committee on Appropriations.

The report is available on the Web at www.nimh.nih.gov/research/index.htm.-R.B.K.