In Danny P. v. Catholic Health Initiatives, 891 F.3d 1155 (9th Cir. 2018), the Ninth Circuit clarified the full extent of the “parity” required in the federal mental health parity law1 which has been in place since 2008.
In Danny P., the Ninth Circuit held that a particular group health plan (the Catholic Health Initiatives Medical Plan—Blue Cross Blue Shield) was prohibited from denying the same or equivalent room and board coverage in behavioral health facilities that it provided in non-behavioral health facilities, overturning the district court’s decision in favor of the plan. Specifically, the Court held the plan could not be permitted to deny inpatient room and board costs at a behavioral health inpatient residential treatment facility while simultaneously allowing coverage for non-behavioral health (medical and surgical) inpatient room and board costs at a skilled nursing facility.
The plan at issue was a self-funded group health benefit plan covering Catholic Health Initiatives employees and their dependents, and provided for coverage of “mental health services,” bed, board, and general nursing care, ancillary services provided at skilled nursing facilities, and also provided coverage for residential treatment facilities (licensed facilities that deal with illnesses affecting mental health). The health insurance plan here was trying to limit payments for behavioral health residential services. Many plans attempt to limit residential behavioral health services because they are much more costly than the physical medicine corollary (e.g. a skilled nursing facility).
As stated in the opinion:
The Parity Act requires that benefits in a plan that provides for “both [ (a) ] medical and surgical benefits and [ (b) ] mental health or substance use disorder benefits,” must not impose more restrictions on the latter than it imposes on the former. 29 U.S.C. § 1185a(a)(3)(A). Specifically, the Parity Act states the following:
In the case of a group health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that—
(i) the financial requirements applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no separate cost sharing requirements that are applicable only with respect to mental health or substance use disorder benefits; and
(ii) the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
See Danny P., 891 F.3d at 1157–58.
The Ninth Circuit explained that neither the Parity Act nor the regulations specifically address every situation, leaving room for interpretation but reasoned the regulations “did indicate that mental and medical/surgical benefits must be congruent, and that limiting the former while not placing a similar limitation on the latter would be improper.” Id. at 1159.
As the opinion’s mandate ripples outward from the Ninth Circuit and impacts other enforcement actions, the next area of advocacy for parity will likely focus on qualitative or nonquantitative treatment limitations, which will be harder to identify, but equally if not more important to the successful and comprehensive treatment of mental health and substance use disorders envisioned by the Parity Act.
1 Most health plans must include behavioral health benefits as the Patient Protection and Affordable Care Act mandates. As such, under the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), plans containing behavioral health benefits must offer them on par with medical/surgical benefits. For more information, see https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/mhpaea_factsheet.html.