Insurance regulation of mental health and addiction coverage danzeiser

Texas Department of Insurance (TDI)Doug Danzeiser

Regulatory Matters Team of theLife, Accident, and Health Section

January 23, 2012

TIPSSLEADERSHIP SUMMIT

Regulation of Mental Health and Addiction Insurance Coverage

Overview• Federal Laws Relating to Mental

Health and Addiction• State Laws and Regulations

Relating to Mental Health and Addiction

• Other Federal and State Laws and Regulations Relating to Health Insurance

• What Resources TDI Offers

PUBLIC LAW

110-343 Paul Wellstone and

Pete Domenici Mental Health Parity and

Addiction Equity Act (MHPAEA)

OVERVIEW

MHPAEA:

enacted on October 3, 2008

effective for plan years beginning October 3, 2009 (January 1, 2010, for calendar year plans)

APPLICABILITY

applies to fully insured and self-funded large employer plans (employers with more than 50 employees)

Medicaid managed care plans must comply with MHPAEA

applies only to plans that offer mental health (MH) or substance use disorder (SUD) benefits

BEFORE MHPAEA

Federal law only addressed parity coverage for MH benefits.

Annual or a lifetime dollar limits for MH benefits could be no lower than those on medical/surgical benefits.

AFTER MHPAEA

Parity law was extended to include substance use disorder (SUD) benefits.

If offer MH/SUD benefits, “financial requirements” for them can be no more restrictive than the “predominant” financial requirements.

ESSENTIAL REQUIREMENTS

MHPAEA does not create a federal mandate for MH or SUD benefit coverage.

If a plan offers the coverage, then it must be comparable.

COMPARABLE COVERAGE

Equivalency of coverage applies to all financial requirements, including:deductibles, copayments,

coinsurance;out-of-pocket expenses; andtreatment limitations, such as:

frequency of treatment, number of visits, days of coverage, and similar limits.

OUT-OF-NETWORK BENEFITS

If provide out-of network coverage for medical/surgical benefits, must also provide out-of-network coverage for MH/SUD benefits.

SMALL EMPLOYER EXEMPTION

Small employers with 50 or fewer employees are exempt from the MH/SUD parity requirements.

Any state parity laws continue to apply to small employers, as well as to individual (non-employer) plans.

PATIENT PROTECTION

AND AFFORDABLE

CARE ACT (PPACA)

PUBLIC LAW

111–148

PPACA identifies MH/SUD services, including behavioral health treatment as essential health benefits.This means:

carriers have limited ability to place lifetime or annual limits on this coverage

small employer and individual plans sold through exchanges in 2014 will provide this coverage.

More information : www.tdi.texas.gov/consumer/cpmhealthcare.html

PPACA OVERVIEW

TEXAS LAWS AND REGULATIONS

MAJOR MEDICAL HEALTH COVERAGE

Employer10.8 million

49%

Individual808 k4%

Medicaid3.4 million

16%

Other Public630 k3%

Uninsured6.2 million

28%

Number of Nonelderly Texans by Health In-surance Status

Employer

Individual

Medicaid

Other Public

Uninsured

Source: Kaiser Family Foundation, StateHealthFacts.org –

2008-2009 Census, CPS, ACS

http://www.statehealthfacts.org/profileind.jsp?cat=3&sub=39&rgn=45&cmprgn=1

MAJOR MEDICAL BY FUNDING SOURCE

Private (Fully In-sured) Coverage

5,741,12229%

Publicly Funded Coverage6473862

33%

Self-Funded Coverage7682878

39%

2009 Texas Insured Population by Funding Source

Private (Fully Insured) Cov-erage

Publicly Funded Coverage

Self-Funded Coverage

TIP

Look for “TDI” or “DOI”

on insurance cards.

TEXAS INSURANCE CODECHAPTER 1355

BENEFITS FOR CERTAINMENTAL DISORDERS

TEXAS LAWS AND REGULATIONS – CH. 1355

Group benefits for certain serious mental illnesses and other disorders:must provide at least 45 days of

inpatient and 60 outpatient visits;

no lifetime limits on the number of days of inpatient treatment or the number of visits for outpatient treatment;

must provide parity with any limitations, deductibles, copayments, and coinsurance as those for physical illness;

TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUED

Benefits continued:

may not count outpatient visits for medication management against the number of outpatient visits; and

must provide the same coverage for outpatient visits as for physical illness.


Chapter 1355 does not require coverage for the treatment of:

addiction to a controlled substance used in violation of the law

mental illness that results from the use of a controlled substance in violation of the law.


Small employers:

Carriers must offer coverage of serious mental illness to small employers.

Small employers may reject the coverage.


Alternative mental health treatment benefits:

IF coverage of mental or emotional illness or disorder treatment is provided when confined in a hospital, THEN must also provide coverage for treatment in a residential treatment center for children and adolescents or in a crisis stabilization unit;

coverage must be at least as favorable as that provided for treatment in a hospital;


Alternative mental health treatment benefits -- continued:

certain requirements are required for coverage;

same benefit maximums, durational limitations, deductibles, and coinsurance that apply to inpatient psychiatric treatment under the plan; and

two days of treatment is equal to one day of treatment in a hospital or inpatient program.


Psychiatric day treatment facilities:

IF group policy provides coverage for treatment of mental or emotional illness or disorder when confined in a hospital, THEN must provide coverage for treatment in a psychiatric day treatment facility.

no less favorable than hospital coverage subject to the same durational limits,

deductibles, and coinsurance factors. two days of treatment equal to one day of

treatment in a hospital or inpatient program.


Psychiatric day treatment facilities -- continued: Insurer is required to OFFER coverage for

treatment of mental or emotional illness or disorder when confined in a hospital or psychiatric day treatment facility.

Policyholder is entitled to reject coverage. Policyholder may select an alternative

level of benefits if offered by or negotiated with the insurer.


AVAILABILITY OF CHEMICAL DEPENDENCY COVERAGE

Texas Laws and Regulations – Ch. 1368 -- continued

Availability of chemical dependency coverage:

group health benefit plan must provide coverage for the necessary care and treatment of chemical dependency;

parity required except for dollar and durational limits (which have minimum requirements); and

not required for individual plans.


Minimum coverage requirements: Coverage may not be less favorable

than that provided for physical illness.

Coverage is subject to the same durational limits, dollar limits, deductibles, and coinsurance that apply to physical illness.


Availability of chemical dependency coverage -- continued:

Required coverage is limited to a lifetime maximum of three separate treatment series for each covered individual.

Coverage for necessary care and treatment in a chemical dependency treatment center must be provided as if the care and treatment were provided in a hospital.

TITLE 28 TEXAS ADMINISTRATIVE

CODECHAPTER 21

SUBCHAPTER PSECTIONS 21.2401 –

21.2407

MENTAL HEALTH PARITY

Texas Laws and Regulations -- continued

The TDI parity rules –were adopted February 9, 2011,

for plans issued after March 1, 2011

enable TDI to maintain state regulatory authority

apply to serious mental health and substance use disorder benefits.

TITLE 28 TEXAS ADMINISTRATIVE

CODECHAPTER 3

SUBCHAPTER HHSECTIONS 3.8001 – 3.8030

STANDARDS FOR REASONABLE COST

CONTROL AND UTILIZATION REVIEW FOR CHEMICAL

DEPENDENCY TREATMENT CENTERS


Implements the legislative requirement in section 1368.007 of the Insurance Code that TDI adopt guidelines for reasonable cost controls and utilization review of chemical dependency treatment.


For various levels of care (inpatient to outpatient), the rule addresses criteria for:

admissioncontinued staylength of stay, and discharge.


PROMPT PAY

DEPARTMENT OF INSURANCE

PROMPT PAY LAWSAPPLICABILITY

Applicable to Accident and Health:• health maintenance organizations (HMOs)• insured PPO plans

Not applicable to:• self-funded ERISA plans• indemnity plans• Medicaid, Medicare, and Medicare Supplement• self-funded government and school plans• Children’s Health Insurance Program (CHIP), or• plans issued in other states.


APPLICATION TO PROVIDERS

Contracted providers under HMO plans, insured PPO plans

Non-contracted providers of emergency and referral services

Prompt Pay Laws - Continued

PREAUTHORIZATION disclosure of services for which

preauthorization is required once preauthorized, carrier may not deny or

reduce payment based on medical necessity or appropriateness of care

response deadlines• life-threatening condition or post-

stabilization - one hour• concurrent hospitalization - 24 hours• all other requests - three calendar days.


ELIGIBILITY INQUIRIES AND VERIFICATION REQUESTS

eligibility inquiry• not a guarantee of payment

verification• guarantee of payment: “cannot reduce

or deny payment”• exceptions: misrepresentation and

failure to perform• response deadlines without delay, not

to exceed:olife-threatening condition or post-

stabilization - one houroconcurrent hospitalization - 24

hoursoall other requests - five calendar

days.


MORE INFORMATION

www.tdi.texas.gov/hprovider/ppsb418faq.html


http://www.tdi.texas.gov/hprovider/ppsb418faq.html

http://www.tdi.texas.gov/hprovider/ppsb418faq.html

The Texas Department of Insurance

THE COMPLAINT PROCESS


PROVIDER OMBUDSMANresponds to inquiries from

providers and carriers regarding the prompt payment of claims laws and regulations.

monitors complaint trends among carriers and across issues

email: [email protected]


COMPLAINT PROCESSING

1. receive complaintphone callwritten, including online form, e-

mail, fax, or letteranonymous

2. prioritize complaints according to nature, severity, and industry impact; appropriately note confidential information


COMPLAINT PROCESSING, CONTINUED

3. prepare response to correspondence• send acknowledgement to customer • write to regulated entity, include

complaint• entity must respond in 10 days or

request an extension • review responses from regulated

entity• complete legal research and obtain

additional necessary information


COMPLAINT PROCESSING, CONTINUED

4. screen issues for referral: identify “frivolous,” justified, and unjustified

complaints check for potential enforcement, fraud, or

market conduct referrals; and check for consumer education issues.

5. send response to customer mail, fax, or e-mail response with

informational/educational content copy the carrier or other entity complained

about on TDI’s closing letter (as appropriate) average processing time is 30 days.


THE ENFORCEMENT PROCESS


HOW TDI LEARNS OF VIOLATIONS

complaints• providers• consumers• agent• company• anonymous

internal discovery• examination• failure to file• failure to

respond to TDI inquiry

other regulatory agency

law enforcement


METHODS OF INVESTIGATION

written inquiryon site examinationsubpoenawitness statementsundercover


ENFORCEMENT ACTIONS

TDI may seek:revocation of license or

authorizationfinerestitutioncorrective actioncease and desist order


POSSIBLE ENFORCEMENT OUTCOMES

informal resolution with or without a consent order

contested case resolutionemergency cease and desist

orderreferral to Texas Attorney General


WHAT CAN YOU DO?

review your contractscomplain to TDIprovide copies of

correspondence between you and the insurer

provide other documentation supporting your complaint


INSURANCE FRAUD


TDI’s Fraud Unit investigates insurance fraud for referral to

state and federal prosecutors employs certified peace officers, prosecutors,

certified fraud examiners, certified internal auditors, and criminal analysts

coordinates investigations with other agencies

interviews suspects and witnesses analyzes financial, business, and legal

documents documents the flow of money transactions prepares investigative reports for prosecutors


Reporting Fraud

Report insurancefraud by calling

1-888-327-8818Insurance Fraud Hotline

Online reporting available at:www.tdi.texas.gov

Follow link to “Insurance Fraud”


http://www.tdi.texas.gov/

EMERGING ISSUES


federal health reform• guaranteed issue/individual mandate• premium support and Medicaid expansion• exchanges and essential health benefits• risk adjustment

limited networks• exclusive provider plans• accountable care organizations• health care collaboratives• tiered networks

preferred provider plan rules decline of commercial HMO enrollment

HELPFUL RESOURCES

TDI Website: www.tdi.texas.gov Consumer Protection Help Line:

800-252-3439

Consumer Protection: [email protected]

Doug Danzeiser: [email protected],

512-475-1964


http://www.tdi.texas.gov/

mailto:[email protected]

mailto:[email protected]

Insurance regulation of mental health and addiction coverage danzeiser

Health & Medicine

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