CMS finalizes mental health parity rules

On March 30, 2016, the Centers for Medicare and Medicaid Services (CMS) published final rules on mental health/substance use disorder parity requirements applicable to Medicaid managed care organizations (MCOs), Medicaid alternative benefit plans (ABPs), and the Children’s Health Insurance Program (CHIP).   The final Medicaid/CHIP rules are based on the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which generally prohibits more restrictive cost-sharing (e.g., co-payments and deductibles), quantitative limitations (e.g., visit limits), and non-quantitative limitations in mental health/substance use disorder benefits under a health plan than in medical/surgical coverage under the same plan.

In states where some or all mental health and substance use disorder benefits for Medicaid beneficiaries are provided through Medicaid MCOs (including health maintenance organizations, pre-paid inpatient health plans, and pre-paid ambulatory health plans) and/or Medicaid ABPs, the final rules require parity analysis across all of these plans.  Medicaid MCOs and Medicaid ABPs must also disclose information on mental health and substance use disorder benefits, criteria for determining medical necessity under those benefits, and reasons for payment denials.  Medicaid state plan benefits for beneficiaries not enrolled in Medicaid MCOs or ABPs are not subject to mental health/substance use disorder parity requirements, but those requirements apply to all CHIP beneficiaries.

Unlike proposed rules published on April 10, 2015, the final rules extend parity protections to long term care (LTC) services for mental health and substance use disorders, in the same manner that parity protections apply to other services.  The final rules affect approximately 22 million Medicaid beneficiaries and 880,000 CHIP beneficiaries.

The final Medicaid/CHIP rules are effective May 31, 2016.   States will be required to demonstrate compliance with those rules (e.g., through amendments to Medicaid MCO contracts) by September 2017.   Additional information is available here.

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