Formulary Implications of the Federal Mental Health Parity Act

[diana.papshev]

Anonymous question:

"How should the Federal Mental Health Parity Act be interpreted in terms of formulary management. I am specifically interested in what drug classes are being interpreted as Mental Health..."

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[chantell.reagan]

The Federal Mental Health Parity Act (FMHPA) was originally implemented in October 2009 and applies to self-insured employer groups of 51+. It expands on the previously implemented Mental Health Parity Act of 1996 which applied to annual and lifetime dollar maximums for benefits for mental health disorders only. The FMHPA of 2008 now applies to both mental health and substance use disorder benefits.

The new rules prohibit fully insured large group health insurance plans (typically offered by employers) from restricting access to care by limiting benefits and requiring higher patient costs than those that apply to general medical or surgical benefits. As summarized by HHS, “the new law requires that any group health plan that includes mental health and substance use disorder benefits along with standard medical and surgical coverage must treat them equally in terms of out-of-pocket costs, benefit limits and practices such as prior authorization and utilization review. These practices must be based on the same level of scientific evidence used by the insurer for medical and surgical benefits. For example, a plan may not apply separate deductibles for treatment related to mental health or substance use disorders and medical or surgical benefits—they must be calculated as one limit. MHPAEA applies to employers with 50 or more workers whose group health plan chooses to offer mental health or substance use disorder benefits. The new rules are effective for plan years beginning on or after July 1, 2010.”

Within the regulations, the category of “treatment limitations” is defined to include non-quantitative treatment limitations (6 are identified, but notes that there may be others). The rule requires these non-quantitative treatment limitations to be in parity. Specifically, any processes, strategies, evidentiary standards, or other factors used in applying non-quantitative treatment limitations must be comparable for both medical/surgical benefits and mental health and substance abuse disorder benefits.

1. Medical management standards limiting or excluding benefits based on medical necessity or appropriateness, or based on whether the treatment is experimental or investigational (including pre-authorization, concurrent review, retrospective review, case management, and utilization review)
2. Formulary design for prescription drugs
3. Standards for provider admission to participate in a network, including reimbursement rates
4. Plan methods for determining usual, customary and reasonable charges
5. Exclusions or limitations on particular therapies or treatments, unless another alternative treatment is attempted as a pre-condition — known as “fail first” or “step therapy” protocols
6. Exclusions based on failure to complete a course of treatment

Of note the Rule does not specifically define which drug classes are included in the “mental health” category, as this will likely be left open to interpretation by the plans. It is unclear whether there will be any other guidance issued on the specific drugs or drug classes, as the final rule has not been issued (comments were due for the “interim final rule” by 5/3/10). Often, state-specific Medicaid programs have their own definition of “mental-health” drugs, which most often include anxiolytics, sedative/hypnotics, antidepressants, antipsychotics, and ADHD drugs. Though there are no plans with publically available mental health drug lists or formularies as they apply to the FMHPA, we’ve included some examples of general Medicaid mental health and commercial formularies with mental health categories below for your review.

Additional resources:
Centers for Medicare and Medicaid Services: Health Insurance Reform for Consumers (The Mental Health Parity and Addiction Equity Act)

UnitedHealthcare: Federal Mental Health Parity Interim Final Regulations Explained

Mental Health America: Mental Health America Hails Approval of Federal Parity Legislation

Regence: Mental Health Parity Act and other changes effective Oct. 15, 2009

United States Department of Labor: FAQs About The Mental Health Parity Act

Examples of mental health formularies (not specific to the FMHPA):

Westmoreland County Mental Health/Mental Retardation Drug Formulary (1/2010)

Maryland Medicaid Mental Health Formulary (7/2010)

Texas Department of Mental Health Drug Formulary (2004)

Kaiser Permanente Commercial Drug List (2010) (see mental health category)