Posted on: 4/19/2012
Medora A. Marisseau, Karr Tuttle Campbell
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The federal government, and every state except Wyoming, has enacted laws regulating health insurance coverage of mental health services. (For a table of state and federal mental health parity laws, see National Conference of State Legislatures, State Laws Mandating or Regulating Mental Health Benefits, available online at http://www.ncsl.org/issues-research/health/mental-health-benefits-state-laws-mandating-or-re.aspx). The goal of these mental health parity laws is to expand access to mental health services and combat discrimination against those suffering from mental illnesses.
The federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) does not mandate mental health coverage, but requires parity of treatment limitations and financial requirements (such as co-pays and coinsurance). The 2010 Interim Regulations under the MHPAEA require parity of non-quantitative treatment limitations, such as standards for applying medical necessity or an experimental/investigational exclusions. Nothing in the federal act, however, prohibits exclusion of specified mental health conditions.
Consumers and advocates have therefore been pushing for expansion of mandated coverage for mental health conditions under state mental health parity laws. Advocates have aggressively pursued legislation to ensure that the treatments they favor, particularly relating to autism spectrum disorders, must be covered. As a result, 29 states have enacted additional insurance mandates concerning treatment for autism and/or developmental disabilities since this effort began in 2007. Legislation is also being considered or pursued in 14 other states, leaving only eight states (including the District of Columbia) where a legislative solution is not currently under consideration. See Autism Votes, State Initiatives, available online at http://www.autismvotes.org/site/c.frKNI3PCImE/b.3909861/k.B9DF/State_Initiatives.htm.
Advocates have also increasingly turned to the courts to argue that coverage for any treatment for every mental health condition, frequently defined as any condition listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM), is required under state mental health parity laws. This new and growing body of law applies state parity laws to operate as a mandate to cover all medically necessary mental health services, as opposed to merely requiring parity with medical and surgical services.
The Ninth Circuit, overruling prior district court cases, recently held that California’s Mental Health Parity Act requires insurers to cover all medically necessary mental health services, including residential services, regardless of whether similar or comparable services are covered for physical conditions. Harlick v. Blue Shield of Cal., 656 F.3d 832 (9th Cir. 2011). The district courts had interpreted the state mental health parity law to require parity, not coverage. See Wayne W. v. Island View Resid. Treatment Center, L.L.C., 2007 U.S. Dist. LEXIS 81362 (D. Utah 2007) (finding that California parity law did not require coverage of residential mental health treatment, even if medically necessary); Daniel F. v. Blue Shield of Cal., 2011 U.S. Dist. LEXIS 21587 (N.D. Cal. 2011) (same).
The Nebraska parity law has also been interpreted to require coverage of residential treatment for mental health conditions, even if not covered for physical conditions. Wedekind v. United Behavioral Health, 2008 U.S. Dist. LEXIS 5411 (D. Utah 2008). New Jersey courts have ruled that exclusions for educational services could not be applied to deny coverage for treatment of developmental disabilities, even where the exclusion was comparably applied to medical/surgical services. Markiewicz v. State Health Benefits Comm’n, 915 A.2d 553 (N.J. Super. Ct. App. Div. 2007); In re Micheletti, 913 A.2d 842 (N.J. Super. Ct. App. Div. 2007) (reaching similar conclusion).
However, not all courts have followed this course. See Jon N. v. Blue Cross Blue Shield of Massachusetts, 684 F. Supp. 2d 190 (D. Mass. 2010) (finding that requirement under state parity law of continuum of care could be met without covering all types of residential care).
Claimants have also challenged coverage limitations based on provider types. A growing treatment trend for autism spectrum disorder is Applied Behavioral Analysis (ABA), which is a systematized process in which a child’s behaviors are observed and a variety of behavioral conditioning techniques are used to teach desired behaviors and eliminate unwanted ones. It is frequently carried out by unlicensed or non-credentialed out-of-network providers.
The most visible opinion addressing this category of issues is McHenry v. Pacificsource Health Plans, 679 F. Supp. 2d 1226 (D. Or. 2010). In that case, the court rejected the insurer’s argument that ABA was experimental after reviewing extensive medical evidence and opinions; dodged the insurer’s argument that ABA was educational in nature by finding that the insurer could not satisfy other requirements of the educational services exclusion in its plan, and concluded that ABA could not be excluded as academic or social skills training because although it happened to improve academic and social skills as a side effect, it was primarily behavioral training. Nevertheless, the court found that the plaintiff was not entitled to reimbursement under the plan because the person who provided ABA services was not a provider authorized for reimbursement under Oregon law. The judgment was later amended to require reimbursement for ABA services after the provider in question became qualified, and over $210,000 in attorneys’ fees was awarded to the plaintiff. See McHenry v. PacificSource Health Plans, 2011 U.S. Dist. LEXIS 78898, 2011 U.S. Dist. LEXIS 97854 (D. Or. 2011).
A Washington state trial court ruled that under Washington’s mental health parity act, the Washington Health Care Authority was required to cover ABA therapy provided by certified, but unlicensed counselors. D.F. v. Wash. State Health Care Auth., No. 10-2-29400-7 (King County Super. Ct. Feb. 17, 2012). The fact that medical and surgical services were covered only for licensed provider types did not factor into the court’s analysis.
Another frontier is in the expansion of existing state mental health mandates. In Z.D. v. Group Health Cooperative, No. 2:11-cv-1119 RSL (W.D. Wash. July 6, 2011), the district court ruled that Washington’s neurodevelopmental therapy mandate, which requires benefits through age six, was by implication expanded by the state’s mental health parity law. The court ruled that where neurodevelopmental therapy was provided to treat a mental health disorder, the age limitation did not apply.
What began as a legislative effort to end discrimination in the treatment of mental illness is now a major judicial refashioning of mandated benefits for preferred treatments and diagnoses, particularly autism. The recent court rulings give mental health coverage preference over medical and surgical services, to mandate coverage for all medically necessary treatments for any DSM diagnosis without limitation or exclusion.
Medora A. Marisseau
Karr Tuttle Campbell