Coverage Requirements
The Federal Parity Law does NOT require that insurers offer mental health or addiction coverage. Instead it requires that if an insurer offers ANY mental health or addiction benefits, the coverage must be equal to medical/surgical benefits.
To enforce this, benefits are placed into six areas for comparison purposes:
- In-network, inpatient
- In-network, outpatient
- Out-of-network, inpatient
- Out-of-network, outpatient
- Emergency services
- Prescription drugs
If a health plan has mental health or addiction benefits in ANY of the six areas, it must offer benefits in ALL of the areas where medical or surgical benefits are offered.
What Does This Mean?
Limits on Visits, Days, or Copayments
In order to make sure benefits are equal for mental health and addiction medical/surgical, there are specific regulations that address how plans can limit your access to treatment. Examples of these limits are familiar to us all:
- Limit on the number of visits you can make in one year
- Limit on the number of days you can stay in the hospital
- Amount of your copayment each time you visit your provider
- Amount of money you pay for each service (testing, prescriptions, etc.)
The law does NOT ALLOW limits for your mental health or addiction treatment benefits that are separate from your medical or surgical treatment. It also does NOT ALLOW any limits on mental health/addiction treatment that are more restrictive than for medical/surgical treatment.
What Does This Mean?
The exact regulatory language which defines the standard for determining any violations in this area is, “Any quantifiable treatment limitation must be no more restrictive than the predominant requirement or limitation that is applied to substantially all medical/surgical benefits.”
What Does This Mean?
Other Limits on Treatment
Plans often have other ways they may limit access to care that aren’t as simple as limits on visits or co-payments. How a plan determines if your treatment was medically necessary; if this review is done before, during, or after treatment; the amount of money the plan pays its network providers for specific services; and the number of providers on its in-network panels are examples of these other types of limits.
The Federal Parity Law addresses these complicated limits by requiring that they be comparable to the medical/surgical limits and no more strictly applied to mental health/addiction benefits.
What Does This Mean?
The exact regulatory language is, “Any nonquantifiable treatment limitation must be comparable and no more stringently applied for mental health/addiction than for medical/surgical benefits.”
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Appeal and Disclosure Rights
The Federal Parity Law also grants consumers and providers rights not related to limits on treatment. These rights require that insurers provide you with certain information when treatment is denied or coverage changes are made.
- Insurers must disclose the criteria used for medically necessary determinations to consumers and providers upon request and provide an explanation for how it is applied. This is important because many treatment denials are based on this determination.
- Insurers must provide the reason for any denial of treatment in writing and free of charge. The insurer must send this upon denial but also upon request by a provider or consumer.
- If a plan decides to no longer offer mental health or addiction benefits, they must notify members immediately.
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The Maryland Parity Law passed in 1993 applies only to large group fully insured plans and individual or self-employed plans purchased in Maryland. Read More About Your Insurance Plan
For those plans covered by this law, consumers are entitled to:
- INPATIENT COVERAGE: At least the same number of days for mental health/addiction inpatient care as are covered for medical/surgical care for both large group fully insured and individual/self employed plans
- OUTPATIENT COVERAGE:
For large group fully insured plans:
Coverage for outpatient mental health/addiction visits must be equal to medical/surgical visit coverage, including diagnostic testing
For individual and self employed plans:
80% for first 5 visits in a calendar year
65% for the 6th through 30th visit in a calendar year
50% for the 31st and subsequent visits in a calendar year
EXCEPT: Insurance coverage of outpatient visits for medication management for mental health and addiction must be the same as for medical health
- PARTIAL HOSPITALIZATION: At least 60 days for partial hospitalization for both large group fully insured and individual/self employed plans
- COST SHARING: No discrimination in cost-sharing for inpatient or outpatient visits or separate deductible, lifetime, or annual out-of-pocket limits for both large group fully insured and individual/self employed plans
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