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Behavioral Health Parity and Medicaid

Issue Brief
  1. While the term “mental health parity” is used in the law, this brief uses “behavioral health parity” to signify that parity rules apply to both mental health and substance use disorder services.

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  2. 42 U.S.C. § 300gg-26; 45 C.F.R. § 146.136.

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  3. See generally Kaiser Commission on Medicaid and the Uninsured, Medicaid Enrollment and Expenditures by Federal Core Requirements and State Options (Jan. 2012), available at http://kff.org/medicaid/issue-brief/medicaid-enrollment-and-expenditures-by-federal-core/.

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  4. 42 U.S.C. § 1396u-7; 42 U.S.C. § 1396a(k)(1); 42 C.F.R. § § 440.300-440.390.  Beneficiaries who are “medically frail” cannot be required to receive an ABP and instead must have access to the state plan benefit package.  42 U.S.C. § 1396u-7(a)(2)(vi); 42 C.F.R. § 440.315(f).

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  5. States also may select the “Secretary-approved” option to design an ABP.  42 U.S.C. § 1396u-7(b)(1)(D).

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  6. 42 U.S.C. § 1396u-7(b)(5).

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  7. 42 U.S.C. § 1396d(a)(B); cf. 42 U.S.C. § 1396d(r)(5).  However, in a separate rule-making, CMS recently proposed that states may make capitation payments to MCOs and PIHPs for enrollees receiving services of no more than 15 days per month in an IMD that is an inpatient hospital facility or sub-acute facility providing crisis residential services.  Proposed 42 C.F.R. § 438.3(u). CMS proposes this change in the capitated managed care context to address difficulties with beneficiary access to short-term inpatient behavioral health treatment and to recognize managed care plans’ flexibility in providing care in alternate settings in lieu of those covered by statute.  80 Fed. Reg. 31098, 31116-31118 (June 1, 2015), available at https://federalregister.gov/a/2015-12965.

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  8. Of the 39 states (including DC) with MCOs, 34 indicated that they had expanded managed care in 2014 or planned to do so in 2015.  Kaiser Family Foundation, Medicaid in an Era of Health & Delivery System Reform:  Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015  at 21 (Oct. 2014), available at http://kff.org/medicaid/report/medicaid-in-an-era-of-health-delivery-system-reform-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2014-and-2015/.

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  9. MCOs contracts must include at least one of the following services in addition to inpatient hospitalization, or three or more of the following services if inpatient hospitalization is not included:  outpatient hospital, rural health clinic, federally qualified health center, other laboratory and x-ray, nursing facility, Early Periodic Screening Diagnosis and Treatment, family planning, physician, and home health services.  PIHPs include inpatient hospital or institutional services, while PAHPs do not.  42 C.F.R. § 438.2.

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  10. 42 U.S.C. § 1396u-2(b)(8).

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  11. 42 U.S.C. § 1396u-7(b)(6).

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  12. 80 Fed. Reg. 19481-19452 (April 10, 2015), available at http://www.gpo.gov/fdsys/pkg/FR-2015-04-10/pdf/2015-08135.pdf.

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  13. Proposed 42 C.F.R. § § 438.930, 440.395(d)(4).   For MCEs offering Medicaid state plan services to MCO enrollees, parity rules would take effect in the contract year that begins 18 months after publication of the final rule.  Proposed 42 C.F.R. § 438.930.

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  14. Proposed 42 C.F.R. § 438.910(b)(1).

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  15. Proposed 42 C.F.R. § 438.920(a).

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  16. Proposed 42 C.F.R. § 438.910(b)(1).  In these situations, the state is responsible for ensuring that MCO enrollees receive services in parity.  Proposed 42 C.F.R. § 438.910(b)(2).  The state must provide public documentation of compliance with the parity rules within 18 months of the final rule’s publication and must submit documentation with its MCO contract to CMS to show how parity is met if some services are provided to MCO enrollees through another delivery system.  Proposed 42 C.F.R. § § 438.910(b)(1), 438.6(n)(2); see also proposed 42 C.F.R. § 438.6(n)(1) (all MCO contracts and any PIHP or PAHP contracts that provide services to MCO enrollees must ensure that enrollees receive services in parity).

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  17. 80 Fed. Reg. 19420.

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  18. The ABP SPA must contain sufficient information to assure compliance with the parity rules.  Proposed 42 C.F.R. § 440.395(d)(3).

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  19. Proposed 42 C.F.R. § 440.395(b)(2), (d)(1).

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  20. Proposed 42 C.F.R. § 440.395(a), (d)(1).

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  21. 80 Fed. Reg. 19421.

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  22. 80 Fed. Reg. 19422.

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  23. Proposed 42 C.F.R. § § 438.900, 440.395(a).  This differs from the parity rules that apply to group health plans in which the insurer defines benefits for purposes of parity.

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  24. Proposed 42 C.F.R. § § 438.900, 440.395(a).

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  25. Proposed 42 C.F.R. § 438.900, 440.395(a); see also 80 Fed. Reg. 19424.

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  26.   Proposed 42 C.F.R. § 438.910(b)(2)(i)-(iv), 440.395(b)(2)(ii)(A)-(D).  This differs from the parity rules for group health plans in that there are no in- or out-of-network distinctions in the benefit classifications.

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  27. Proposed 42 C.F.R. § § 438.910(c)(2)(ii), 440.395(b)(3)(ii)(B).

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  28. Id. 

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  29. Proposed 42 C.F.R. § § 438.910(c)(2)(i), 440.395(b)(3)(ii)(A).

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  30. Proposed 42 C.F.R. § § 438.910(b)(2), 440.395(b)(2)(ii).

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  31. Id. 

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  32. Proposed 42 C.F.R. § § 438.910)(c)(2)(i), (d)(1);  440.395(b)(3)(ii)(A), 440395(b)(4)(i).

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  33. 80 Fed. Reg. 19425.

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  34. Id. 

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  35. Proposed 42 C.F.R. § § 438.910(b)(2), 440.395(b)(2)(ii).

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  36. Proposed 42 C.F.R. § § 438.920(c)(3); 440.395(d)(2)(ii).

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  37. Proposed 42 C.F.R. § 438.920(c)(1).

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  38. Id. 

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  39. Proposed 42 C.F.R. § 438.920(c)(2).

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  40. Proposed 42 C.F.R. § 440.395(d)(2)(i).

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  41. Proposed 42 C.F.R. § 438(e).

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  42. 80 Fed. Reg. 19421.

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  43. Proposed 42 C.F.R. § § 438.910(b)(1), 440.395(b)(2)(i).

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  44. Id. 

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  45. Proposed 42 C.F.R. § § 438.910(c)(2)(ii), 440.395(b)(3)(ii)(B).

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  46. Proposed 42 C.F.R. § § 438.910(c)(2)(i), 440.395(b)(3)(ii)(A).

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  47. Proposed 42 C.F.R. § §438.910(c)(4), 440.395(b)(3)(iv).

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  48. Proposed 42 C.F.R. § § 438.900, 438.910(a)(2), 440.395(a), (b)(1)(ii).

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  49. Proposed 42 C.F.R. § § 438.910(a)(2), 440.395(b)(1)(ii).

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  50. Proposed 42 C.F.R. § § 438.900, 440.395(a).

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  51. Proposed 42 C.F.R. § § 438.910(c)(1)(i), 440.395(b)(3)(i)(A).

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  52. Proposed 42 C.F.R. § 438.910(c)(1)(ii), (v).

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  53. 80 Fed. Reg. 19425.

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  54. Proposed 42 C.F.R. § 440.395(b)(3)(i)(C), (E).

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  55. 80 Fed. Reg. 19425.

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  56. Proposed 42 C.F.R. § 438.910(c)(1)(i), 440.395(b)(3)(i)(A).

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  57. Proposed 42 C.F.R. § § 438.910(c)(1)(ii)(A), 440.395(b)(3)(i)(B)(1).

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  58. Proposed 42 C.F.R. § § 438.910(a)(3), 440.395(b)(1)(iii).

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  59. 80 Fed. Reg. 19425.

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  60. Proposed 42 C.F.R. § §438.910(c)(1)(ii)(B), 440.395(b)(3)(i)(B)(2).

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  61. Proposed 42 C.F.R. § § 438.910(b)(1), 440.395(b)(2)(i).

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  62. Proposed 42 C.F.R. § § 438.910(c)(3), 440.395(b)(3)(iii).

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  63. Proposed 42 C.F.R. § 438.900.

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  64. 80 Fed. Reg. 19427.

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  65. Proposed 42 C.F.R. § § 438.910(d)(1), 440.395(b)(4)(i).

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  66. Id. 

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  67. CMS also proposes removing an existing rule, 42 C.F.R. § 456.171, that requires state Medicaid agency medical professionals to evaluate each beneficiary’s need for inpatient mental hospital admissions, as there is no similar requirement for medical/surgical hospital admissions.  States could continue to evaluate the need for inpatient admissions as a utilization management technique but would have to ensure that any processes and standards comply with the NQTL parity rules.  80 Fed. Reg. 19433.

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  68. Specifically, any MCE that provides access to out-of-network providers for medical/surgical benefits within a classification must use the same processes, strategies, evidentiary standards or other factors when determining out-of-network access for behavioral health benefits.  MCEs are deemed compliant with this rule if they comply with § 42 C.F.R. § 438.206(b)(4).  Proposed 42 C.F.R. § 438.910(d)(3).

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  69. Proposed 42 C.F.R. § 438.905(b).

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  70. Proposed 42 C.F.R. § 438.905(e)(1).

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  71. Proposed 42 C.F.R. § 438.905(c).

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  72. Proposed 42 C.F.R. § 438.905(e)(2).

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  73. Proposed 42 C.F.R. § § 438.915(a), 440.395(c)(1).  MCEs are deemed compliant with the medical necessity criteria disclosure rule if they comply with 42 C.F.R. § 438.236(c).  Proposed 42 C.F.R. § 438.915(a).

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  74. Proposed 42 C.F.R. § § 438.915(b), 440.395(c)(2).  The proposed rules provide that compliance with the parity information disclosure requirements is not determinative of compliance with any other federal or state law, such as Medicaid notice requirements.  Proposed 42 C.F.R. § § 438.915(c), 440.395(c)(3).

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