N.J. Law to Improve Enforcement, Accountability of Mental Health Parity Law
New Jersey is one of nearly a dozen states enacting a parity law to improve oversight and enforcement of insurance companies and how they manage mental health benefits.
New Jersey became the latest state to enact a mental health parity accountability and enforcement law (A2031/S1339). The legislation was signed by the governor last month after unanimous passage in the state Senate and a 73-3 vote in its House.
“Today we signed a law to ensure our health care system works more fairly for New Jerseyans experiencing challenges with mental health and substance misuse,” Gov. Phil Murphy (D) tweeted after the signing. “Mental health care should be no harder to access than physical health care.”
New Jersey’s law, which takes effect in June, is the latest in a state-level movement to improve insurance companies’ compliance with mental health/substance use parity laws. With the help of APA and its district branches, a dozen more states are advancing similar bills this session, adding to those passed last year by Colorado, Delaware, Illinois, New York, Tennessee, and Washington, D.C.
Most states are using the draft language crafted by APA and the Kennedy Forum. It requires individual and group health plans to conduct regular audits and demonstrate that their management of behavioral health benefits is on par with that of other medical benefits. The idea is to improve plans’ compliance with the 10-year-old Mental Health Parity and Addiction Equity Act (MHPAEA), which advocates said has not achieved its potential.
New Jersey’s law—as well as the other state bills if passed—will require insurance carriers to submit annual reports to state regulators, who must issue a report to the legislature and post it publicly, detailing their oversight of the law’s provisions. The state bills would not impact larger employer plans that are “self-insured,” that is, plans in which employers pay the claims with their own money.
Last year, the New Jersey Psychiatric Association (NJPA) joined forces with a statewide coalition of advocacy organizations to help push the law across the finish line. “We are thrilled to see this enacted and are preparing to work with our state government agencies to ensure that implementation goes smoothly and reporting is done according to best practices,” said Debra E. Koss, M.D., NJPA’s senior vice president and chair of its Council on Advocacy.
“Too often patients experience difficulty accessing care and disruptions to treatment as a result of parity violations that include non-quantitative treatment limitations (NQTLs), such as step therapy and prior authorization policies that are more restrictive for mental health or substance use disorders,” Koss said. “Now that this bill has been signed into law, we can renew our advocacy efforts to address these problems.”
Murphy also acknowledged that “robust consumer outreach and engagement are critical components” and vowed to strengthen the direct line of communication between regulators and those impacted, such as individuals, families, mental health professionals, and advocates. To that end, the state’s Department of Banking and Insurance plans to embark on a “parity listening tour” to solicit feedback from effected parties.
Bills Being Advanced in Many States
Other states advancing similar mental health parity bills include California (SB 11), Colorado (HB 19-1269), Connecticut (HB 7125), Florida (SB 360/HB 307), Maryland (SB 631/HB 599), Massachussetts (S 588/H 910), Minnesota (SF 379/HF 254; SF 1229/HB 1340), Mississippi (SB 2678), Missouri (HB 904), Montana (SB 280), and Pennsylvania (HB 836).
Wyoming also enacted a parity bill (HB 211) in February, becoming the 50th state in the nation to authorize the MHPAEA.
Prior to the passage of its law (HB 211) in February, Wyoming had been the only state remaining in the country that had no laws on the books relating to mental and substance use disorder insurance coverage. The new law requires individual or group health insurance policies issued after July 1 to meet the requirements of MHPAEA, allowing state regulators there to enforce it for the first time since passage 10 years ago.
Although not nearly as ambitious as other parity bills being advanced, mental health advocates are hoping the new law will help reduce the state’s higher-than-average suicide rate by making mental health care more accessible to residents. Last year 42 areas across the state were considered mental health professional shortage areas, equating to just one mental health professional for every 300 Wyoming residents, according to the American Foundation for Suicide Prevention.
Bills Aim to Fix Reimbursement Rate, Utilization Review Inequities
On paper, it appears that most insurance companies are complying with parity laws, because they have done away with so-called quantitative restrictions, such as limits on the number of mental health visits allowed per year. “In practice, however, there are still major issues,” said Tim Clement, M.P.H., APA’s regional director and legislative advisor in the Division of Government Relations, who worked closely with NJPA on passage of the New Jersey bill.
“We’ve never seen an insurance company do an adequate report or analysis of how it sets reimbursement rates for psychiatrists versus cardiologists, for instance,” Clement said. “It’s just not something they do. When it comes to fee negotiation, the insurers say ‘take it or leave it.’ The best way psychiatrists can get increased pay is through this type of legislation.”
While all physicians must deal with prior authorization requests, for most they might involve a five-minute phone call with the insurance company. “For psychiatrists, utilization reviews often take three days and involve hours of justifications. That’s where all the parity violations are right now,” Clement said. Psychiatric patients, too, are also more likely to be exposed to “retroactive reviews,” whereby mental health care that was approved by the insurance company is later determined ineligible for coverage. “It’s a way of clawing back money from psychiatrists and their patients,” he said.
APA is working with many other mental health advocacy organizations to get these state laws passed in 2020. “We’re very hopeful that multiple states will pass this legislation this session,” Clement said. ■
APA’s model parity legislation can be accessed here.
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Published online: 26 April 2019
Published in print: April 20, 2019 – May 3, 2019
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