For example, states including New Hampshire, Massachusetts, and Maryland have scrutinized insurers’ approaches to setting reimbursement rates for mental health providers. Studies have found that reimbursement rates for mental health providers have lagged those paid to other providers, contributing to inadequate behavioral health networks. Insurers’ reimbursement approaches that result in lower payments to behavioral health care providers compared with other providers may violate parity rules.
New York, working in tandem with the U.S. Department of Labor, took action against UnitedHealthcare for using more restrictive standards for provider reimbursement and utilization review for mental health services than for other services, resulting in more denials and higher costs for mental health care. Other states, including Connecticut, Delaware, and Illinois have taken similar actions.
Raising Standards for Behavioral Health Coverage
In addition to stronger oversight, states can set stronger standards for coverage of mental health and substance use treatment. Several states require insurers to meet clear standards for claim review practices that can make it more difficult for behavioral health treatments to be approved. For example, Delaware and Illinois limit the use of prior authorization for substance use disorder treatment and for prescription drugs that treat substance use disorders. Delaware limits the use of concurrent review for substance use treatment. Beginning in 2024, New Mexico will restrict the use of prior authorization for substance use treatment, including prescription drugs, and for certain types of treatment for acute or chronic mental illness.
Some states have defined the coverage of mental health benefits in statute by requiring coverage of all the conditions listed in the comprehensive Diagnostic and Statistical Manual of Mental Disorders (DSM). In addition, some states have established medical-necessity standards that require insurers to use “generally accepted standards” developed by clinical experts for evaluating coverage decisions, rather than allowing insurers to develop those standards internally and be guided primarily by financial considerations. Several states, including California, New Mexico, and Oregon, reference the DSM and require the use of generally accepted standards. Connecticut, Delaware, Illinois, and Oregon are among the states that require the use of specific expert standards such as those developed by the American Society of Addiction Medicine, which define the services and levels of care that are recommended for the treatment of specific types of mental health and substance use disorders.
Behavioral health provider networks are woefully inadequate to meet need. One study found consumers were far more likely to obtain care out of network for behavioral health conditions than for other care. In addition to setting strong network adequacy standards, states can bolster access to behavioral health providers in other ways. Beginning in 2024, New Mexico regulators must review insurers’ approaches to determining reimbursement rates when reviewing plans for network adequacy. In Oregon, insurers must annually report data on nonquantitative limits to coverage, including reporting how the reimbursement rates for behavioral health providers compare with those for other providers.
Ensuring access to behavioral health services will require a comprehensive set of policies to combat workforce shortages and other systemic problems. But enforcing the mental health parity law is an essential step, and federal policymakers have recognized that with $10 million for states to review insurers’ approaches to nonquantitative treatment limits.
States have an opportunity to enhance behavioral health benefits by adopting standards that eliminate opportunities for treatment limitations to occur, making it easier to enforce mental health parity. Setting standards for access to care, in addition to stronger parity enforcement, can ensure behavioral health services are covered on par with other health needs.