Prior to this law passing at a federal level, mental health and substance abuse was covered at a much lower level than physical illness in the eyes of insurance providers. This meant that it was very difficult to get coverage for long term stays at mental health or substance use disorder facilities. In fact, prior to 2008 going to treatment was almost all a “cash pay” system- this meant people who were in need of these services did not have the access they so desperately needed.
Then in 2008, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act that requires health insurers and group health plans to guarantee that financial requirements on benefits are not anymore restrictive than they are for the financial requirements for medical and surgical benefits.
This means that an insurance provider could not have a different deductible for substance abuse than it does for surgical benefits. In fact, below are all of the financial responsibilities that must be equal between mental health + substance abuse and medical + surgical:
- Inpatient in-network and out-of-network
- Outpatient in-network and out-of-network
- Intensive outpatient services
- Partial hospitalization
- Residential treatment
- Emergency care
- Prescription drugs
- Maximum out-of-pocket limits
- Geographic location
- Facility type
- Provider reimbursement rates
- Clinical criteria used to approve or deny care
As for all healthcare coverage, the treatment must be shown to be reasonable, necessary, and appropriate under medical necessity. However, the MHPAE also applies when it comes to medical necessity determinations.
There are some some exceptions when it comes to MHPAE, some insurance providers may choose to not provide any mental health or substance abuse benefits. Exceptions also include self-funded small private employers with less than 50 employees.
At CA Billing we make sure to advocate for our facilities when it comes to insurance companies providing equal benefits for mental health and substance abuse.