Insurance regulation of mental health and addiction coverage danzeiser


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Insurance regulation of mental health and addiction coverage danzeiser

  1. 1. Regulation of Mental Health and Addiction Insurance Coverage Texas Department of Insurance (TDI) Doug Danzeiser Regulatory Matters Team of the Life, Accident, and Health Section January 23, 2012
  2. 2. 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
  3. 3. PUBLIC LAW 110-343 Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA)
  4. 4. OVERVIEWMHPAEA: enacted on October 3, 2008 effective for plan years beginning October 3, 2009 (January 1, 2010, for calendar year plans)
  5. 5. 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
  6. 6. 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.
  7. 7. 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.
  8. 8. 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.
  9. 9. COMPARABLE COVERAGEEquivalency of coverage applies to allfinancial requirements, including:deductibles, copayments, coinsurance;out-of-pocket expenses; andtreatment limitations, such as:  frequency of treatment,  number of visits,  days of coverage, and  similar limits.
  10. 10. OUT-OF-NETWORK BENEFITSIf provide out-of networkcoverage for medical/surgicalbenefits, must also provide out-of-network coverage forMH/SUD benefits.
  11. 11. 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.
  12. 12. PUBLIC LAW 111–148
  13. 13. PPACA OVERVIEWPPACA identifies MH/SUD services, includingbehavioral health treatment as essential healthbenefits.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
  14. 14. Number of Nonelderly Texans by Health Insurance Status Employer Uninsured 6.2 million Individual 28% Employer 10.8 million Medicaid 49%Other Public Other Public 630 k Medicaid 3% 3.4 million Uninsured 16% Individual 808 k Source: Kaiser Family Foundation, – 4% 2008-2009 Census, CPS, ACS
  15. 15. 2009 Texas Insured Population by Funding Source Private (Fully Insured)Self-Funded Coverage Private (Fully Insured) Coverage Coverage 5,741,122 7,682,878 29% 39% Publicly Funded Coverage Publicly Funded Coverage Self-Funded Coverage 6,473,862 32%
  16. 16. TIP Look for “TDI” or “DOI”on insurance cards.
  17. 17. TEXAS LAWS AND REGULATIONS – CH. 1355Group benefits for certain serious mentalillnesses 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;
  18. 18. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDBenefits 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.
  19. 19. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDChapter 1355 does not require coverage for thetreatment 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.
  20. 20. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDSmall employers: Carriers must offer coverage of serious mental illness to small employers. Small employers may reject the coverage.
  21. 21. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDAlternative 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;
  22. 22. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDAlternative 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.
  23. 23. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDPsychiatric 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.
  24. 24. TEXAS LAWS AND REGULATIONS – CH. 1355 -- CONTINUEDPsychiatric 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.
  25. 25. Texas Laws and Regulations – Ch. 1368 -- continuedAvailability of chemical dependencycoverage: 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.
  26. 26. Texas Laws and Regulations – Ch. 1368 -- continuedMinimum 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.
  27. 27. Texas Laws and Regulations – Ch. 1368 -- continuedAvailability 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.
  28. 28. Texas Laws and Regulations -- continuedThe 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.
  29. 29. Texas Laws and Regulations -- continuedImplements the legislative requirementin section 1368.007 of the InsuranceCode that TDI adopt guidelines forreasonable cost controls and utilizationreview of chemical dependencytreatment.
  30. 30. Texas Laws and Regulations -- continuedFor various levels of care (inpatient tooutpatient), the rule addresses criteriafor: admission continued stay length of stay, and discharge.
  32. 32. Texas Laws and Regulations -- continued APPLICABILITY 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.
  33. 33. Prompt Pay Laws - Continued Contracted providers under HMO plans, insured PPO plans Non-contracted providers of emergency and referral services
  34. 34. Prompt Pay Laws - Continued 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.
  35. 35. Prompt Pay Laws - Continued 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 hour oconcurrent hospitalization - 24 hours oall other requests - five calendar days.
  36. 36. Prompt Pay Laws - Continued
  38. 38. DEPARTMENT OF INSURANCEresponds to inquiries from providers and carriers regarding the prompt payment of claims laws and regulations.monitors complaint trends among carriers and across issuesemail:
  39. 39. DEPARTMENT OF INSURANCE1. receive complaint phone call written, including online form, e- mail, fax, or letter anonymous2. prioritize complaints according to nature, severity, and industry impact; appropriately note confidential information
  40. 40. DEPARTMENT OF INSURANCE3. 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
  41. 41. DEPARTMENT OF INSURANCE4. 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.
  43. 43. DEPARTMENT OF INSURANCEcomplaints internal discovery • providers • examination • consumers • failure to file • agent • failure to respond • company to TDI inquiry • anonymous other regulatory agency law enforcement
  44. 44. DEPARTMENT OF INSURANCEwritten inquiryon site examinationsubpoenawitness statementsundercover
  45. 45. DEPARTMENT OF INSURANCETDI may seek:revocation of license or authorizationfinerestitutioncorrective actioncease and desist order
  46. 46. DEPARTMENT OF INSURANCEinformal resolution with or without a consent ordercontested case resolutionemergency cease and desist orderreferral to Texas Attorney General
  47. 47. DEPARTMENT OF INSURANCEreview your contractscomplain to TDIprovide copies of correspondence between you and the insurerprovide other documentation supporting your complaint
  49. 49. DEPARTMENT OF INSURANCE 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
  50. 50. DEPARTMENT OF INSURANCE Report insurance fraud by calling 1-888-327-8818 Insurance Fraud Hotline Online reporting available at: Follow link to “Insurance Fraud”
  51. 51. DEPARTMENT OF INSURANCE 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
  52. 52. DEPARTMENT OF INSURANCE TDI Website: Consumer Protection Help Line: 800-252-3439 Consumer Protection: Doug Danzeiser:, 512-475-1964