Mental Health Advocates Applaud: New CMS Regulation Extends Mental Health Parity into Medicaid

On April 8, 2015, the Centers for Medicare and Medicaid Services (CMS) released a draft regulation that proposes to extend the mental health parity coverage requirements of the Mental Health Parity Act (1996) and the Mental Health Parity and Addiction Equity Act (2008) to Medicaid managed care health plans, Medicaid expansion health plans and Children’s Health Insurance Program (CHIP) health plans.

Medicaid is a program jointly run by the states and the federal government to provide health care to lower income Americans. Enrollment in the program has grown rapidly since it was expanded under the Affordable Care Act; roughly 70 million American now receive health care through Medicaid. Another 8 million children receive health care coverage through CHIP. There has been a general trend in Medicaid toward greater use of managed care health plans as the means of delivering health care services. A Kaiser Family Foundation study further noted that Medicaid finances more mental health services than any other payer.

The intent of the rule is to require Medicaid managed care carriers to comply with “requirements that apply to a health insurance issuer that offers group health insurance.” The proposed regulation extends to Medicaid the mental health requirements put on private insurance in the commercial market, per CMS’s 2013 regulation, “Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.”

The proposed regulation, which would be primarily enforced at the state level, could have the effect of preventing numerical limits on covered services, such as capping the number of mental health visits in a year. The regulation could also lead to oversight into mental health coverage denials, which according to a recent study from the National Alliance on Mental Illness, health plans deny at a far higher rate than medical services. The oversight of Medicaid managed care plans currently varies widely from state to state. So the proposed regulation, by creating a firmer floor on behavioral health coverage, could make mental health services much more available in some states, while having virtually no impact in others.

It is important to note what is not impacted by the draft regulation. States that have structured their Medicaid programs to include separate behavioral coverage may continue to do so. The regulation does not apply to people who receive their health care coverage through Medicaid fee for service arrangements. Nor does the regulation apply to Medicare-Medicaid Dually Eligibles who receive their care through Medicare Advantage or other Medicare contracted health plans.

The draft regulation is currently undergoing a 60-day public comment period, after which CMS will consider comments and finalize the rule.