Behavioral Health

Medicaid managed care organizations’ compliance with mental health parity laws and regulations varies widely by state, according to an HHS Office of Inspector General (OIG) report and industry experts. The wide range and, in some cases, widespread noncompliance with parity laws will be the subject of possible new regulations in Medicaid managed care.

The OIG report is an early sign that the Biden administration intends to train its sights on state Medicaid agencies and their MCOs’ mental health parity compliance, which would follow several years of heightened scrutiny on commercial plans’ compliance with mental health and substance use disorder (SUD) parity rules. MCOs and states may squirm when they start their time in the hot seat: OIG found that in eight studied states, “states and their MCOs did not conduct required parity analyses…and all eight states may not have ensured that all services were delivered to MCO enrollees in compliance with [mental health]/SUD parity requirements.” OIG also pointed a finger at CMS, blaming the agency for not scrutinizing states’ enforcement of parity rules.

Litigation against health plans over alleged mental health parity violations has proliferated in recent years, with judges notably ruling in favor of UnitedHealth Group and against Elevance Health, Inc. Things may get even more complicated with the Biden administration likely to propose more mental health parity regulation this year, according to attorneys from Manatt, Phelps & Phillips, LLP.

Mental health parity rules, which rely on statutes including the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Consolidated Appropriations Act, 2021, require health plans to cover behavioral health and substance use disorder (SUD) treatment at the same level as medical/surgical benefits.

During its March 7 Investor Day, The Cigna Group raised its long-term earnings projection and highlighted the diverse offerings it believes will win client business and differentiate itself from competitors. The company placed particular emphasis on opportunities in the specialty pharmacy area, where it already has a strong foothold and plans on expanding in the coming years.

Cigna increased its long-term adjusted earnings per share (EPS) guidance range to an average growth of 10% to 14% per year, up from a range of 10% to 13%. For 2024, it kept its adjusted EPS target of at least $28.25, up from $25.09 last year.

A recent report from Morgan Health, JP Morgan Chase & Co.’s health care venture fund and consultancy, documents troubling disparities for health care access and outcomes among Black, Asian American and Hispanic employer-sponsored insurance plan members; lesbian, gay and bisexual (LGB) plan members; and ESI members with low incomes. Experts tell AIS Health, a division of MMIT, that plan sponsors and insurers must consider plan design and provider incentives, among other strategies, to close health disparity gaps.

Plan sponsors and insurers can take proactive steps to reduce health disparities among their plan members, experts say — and they add that there are clear business incentives for doing so.

Since integrating physical and behavioral health into its managed Medicaid program beginning in 2016, the state of Washington has not seen significant changes in utilization, quality measures or health outcomes, according to a recent JAMA Health Forum study. Experts tell AIS Health, a division of MMIT, that the study illustrates the challenges associated with integrating behavioral and physical health care that may not be fully apparent until the process begins.

K. John McConnell, Ph.D., the study’s lead author, tells AIS Health that Washington is just one of many states that in recent years have moved away from so-called carve-out models in Medicaid, where one health plan handles physical health and a separate behavioral health organization manages behavioral health. Most states now have carve-in designs where states contract with managed care organizations (MCOs) that are responsible for payment for all health care services for their members.

Self-funded health plans backed by large employers are expanding the amount and quality of behavioral health benefits available to their members, but a new report prepared by Milliman Inc. shows that those plans’ members will likely have a hard time using those benefits due to provider shortages. One expert says that to overcome entrenched, structural problems in behavioral health access, plan sponsors must employ creative solutions and be willing to boost reimbursement to behavioral health providers.

The Dec. 13 Milliman report indicates there is high demand and poor access to mental health care across the country, confirming what other research and anecdotal evidence has shown in recent years. Public health data compiled by the Centers for Disease Control and Prevention’s National Center for Health Statistics and analyzed by Milliman confirm that the most dire outcomes of untreated behavioral health conditions, deaths by suicide and overdose, respectively increased by 32% and 376% between 2001 and 2021.

Two recent surveys from KFF and WTW indicate employer-sponsored health plans are concerned with rising health care costs, driven by factors such as inflation, increased utilization and rising prescription drug expenditures. However, the results suggest that employers are becoming more hesitant to raise health insurance costs for workers at a higher rate than their salary increases.

While the average annual family premiums for employer-sponsored coverage increased 7% this year to $23,968 after not increasing a year ago, according to the KFF Employer Health Benefits Survey, workers’ average wages increased 5.2% and inflation was up by 5.8%. During the past five years, premiums increased 22%, while wages rose by 27% and inflation increased 21%.

Insurer and plan sponsor trade groups strongly oppose the Biden administration’s stepped-up mental health parity regulations, according to statements and public comment letters submitted in response to the latest rulemaking on the subject. Insurer groups AHIP, the Blue Cross Blue Shield Association (BCBSA) and the Alliance of Community Health Plans (ACHP) all lined up against the rulemaking, as did the ERISA Industry Committee (ERIC), a plan sponsor group.

According to the insurer and plan sponsor groups, the proposed rules, which were released in July, are unworkable. They argue that there are simply not enough providers available to meet the more stringent requirements set out in the proposed regulations. The current round of rules, if implemented, would expand the list of conditions covered by parity rules, require additional data reporting and establish stronger network adequacy standards. Both plan sponsors and carriers could be held liable for violations of most provisions in the Biden administration’s proposed regulations.

Prominent Democratic lawmakers have launched an investigation following an HHS Office of Inspector General (OIG) report citing high rates of prior authorization denials by Medicaid managed care organizations. That report, which reviewed 2019 claims data from seven multistate MCOs, found that those insurers denied 12.5% of all prior authorization requests — more than double the denial rate of Medicare Advantage plans that same year. Alarmed by the report, House Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-N.J.) and Senate Finance Committee Chair Ron Wyden (D-Ore.) said they sent letters seeking information about prior authorization practices to CVS Health Corp.’s Aetna, AmeriHealth Caritas, CareSource, Centene Corp., Elevance Health, Inc., Molina Healthcare, Inc., and UnitedHealthcare. Among other questions, the lawmakers want “a description of all algorithms, including machine learning and artificial intelligence algorithms” that the companies use when considering prior authorization requests.

The latest round of mental health care parity regulations would require health plans to detail members’ access to mental health care and the extent of behavioral health networks in much greater detail than before — and a recent federal report says that most plans were not in compliance with previous reporting standards. Experts say that the reporting requirements are a drastic change from previous standards, and plan sponsors and insurers have asked the Biden administration for more time to review the proposed rule.

The Biden administration has made significant changes to regulators' mental health parity enforcement powers in the past, and the latest set may be the boldest yet. The latest proposed rules, issued July 25, include specific data reporting requirements around non-quantitative treatment limits (NQTLs) and more stringent network adequacy requirements. Indeed, insufficient network adequacy now could count as an NQTL for enforcement purposes.