What Does Parity Mean for Insurance and Residential Treatment for Mental Illness?



Eric Plakun, MD, DLFAPA, FACPsychby Eric Plakun, MD, DLFAPA, FACPsych

The recent 60 Minutes piece and Terry’s blog about her experience speaking to managed care reviewers are moving, powerful and frustrating. The draconian procedures sometimes used by managed care organizations make it hard to remember that, in fact, they operate from the same “limited resources” moral imperative as the environmental movement. That is, managed care arose when health care costs were escalating exponentially and unsustainably. Funding for health care became a limited resource—like rainforests or the atmosphere’s ability to absorb carbon dioxide without climate change--that needed better management. At Riggs, we intentionally attend to the cost of treatment as both a straightforward reality issue, and as a metaphor for other limitations that our patients—and all the rest of us—face and have to come to grips with in life—with all the associated rage and despair from which we can hope to learn.

What may be a game changer, though is adoption of a key piece of legislation—the Mental Health Parity and Addiction Equity Act of 2008 (or mental health parity law). Parity requires that mental health treatment be provided on a par with medical and surgical care—without quantitative limits (e.g., restriction on numbers of sessions) or non-quantitative limits (e.g., higher prior authorization burdens) for mental health care that are not comparable to those imposed for medical care. The 60 Minutes episode focuses on denial of residential treatment—an issue we at Riggs and Terry in particular know a great deal about.

Residential treatment is often recommended by clinicians when a patient’s chronic, complex, treatment resistant problems have not responded adequately to outpatient treatment, appropriate medications and past inpatient stays. These people often need more than a several day acute crisis inpatient stay, and are unable to make outpatient treatment work—instead outpatient treatment often becomes ongoing management of crises. Too often, when these people are referred to a residential treatment center like Riggs, the managed care stance is that a patient must meet criteria for an acute inpatient stay to be approved for residential treatment. This stance flies in the face of parity. For example, looking at a roughly comparable medical situation, could a patient with a stroke who is receiving treatment in an acute inpatient setting or ICU be told that they were denied subacute, longer-term care to recover language, motor functioning and the capacity to live independently only if he or she continued to meet acute inpatient criteria? This issue was the focus of the 60 Minutes episode in December, and is also the focus of a lawsuit (Wit et al. v. United Behavioral Health) that addresses the company’s efforts to circumvent the intent of parity by developing and adopting medical necessity criteria for intermediate levels of mental health care—such as residential treatment—that are inconsistent with generally accepted clinical standards.

One lawsuit cannot change the world, but, especially if it is certified as a class action, and the plaintiffs prevail, it may change how managed care thinks about residential treatment. And two other similar lawsuits are seeking class action status concerning other aspects of mental health parity.


An Informed Response to the 60 Minutes Program, Denied

If you are a CBS All Access subscriber, you can view the 60 Minutes episode here: http://www.cbs.com/shows/60_minutes/video/V0EAV25FWjaYdEKlbE8w2OgiQAxx8f...

To hear Former Congressman Patrick Kennedy comment on the 60 Minutes episode referenced above, click here: http://www.cbsnews.com/videos/battle-for-mental-health-treatment-coverage/