Equal mental health insurance coverage elusive despite legal guarantee

Beauterre Recovery Institute told United that Tillitt would need 45 days at its residential treatment center in the countryside south of Minneapolis. United paid for 21, forcing Beauterre to discharge him to outpatient care.

Little more than two months later, Tillitt was dead of an overdose. United paid the full cost of the failed effort to revive him in a hospital emergency department — $9,221, according to his mother, DeeDee Tillitt.

“They had to because it’s medical,” she said. “It’s emergency. There was nothing they could deny. That [money] could have paid for his goddamn treatment and saved his life.”

Unequal insurance coverage for mental and physical health is widely considered one of the major causes of the mental health crisis facing the United States. After two years of a pandemic that has fueled soaring rates of anxiety and depression and two decades into the worst drug epidemic in U.S. history, uneven coverage contributes to the current severe shortage of behavioral health services.

Consumers seeking psychotherapy and drug treatment contend with administrative roadblocks, network shortfalls and more-restrictive benefits than they receive in coverage for physical health, according to advocates, public officials and a host of analyses, court cases and government reports. Caregivers, plagued by lower reimbursements than medical doctors receive, continue to flee insurance networks for cash-only arrangements.

“Mental health and addiction care can no longer be separate and unequal,” said former congressman Patrick J. Kennedy, who helped pass a 2008 mental health parity law and now heads the Kennedy Forum, which is devoted to implementing it. “It has to be equal and integrated.”

The insurance industry says it should not be held responsible for the inadequacy of the U.S. mental health system, which long has lacked sufficient numbers of providers to meet the public need, something the pandemic laid bare.

In simplest terms, the 2008 Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act requires group- and self-insured health plans covering more than 50 workers to provide behavioral health benefits on par with services consumers receive for medical and surgical care. This is known as mental health parity. About 136.5 million Americans receive coverage through their workplaces.

In 2010, the Affordable Care Act extended it to individual and some small group plans.

In 2020, about 53 million adults — 1 in 5 — said they had suffered some form of mental illness in the previous year, according to the National Survey on Drug Use and Health. Symptoms of anxiety and depression more than tripled during the first 10 months of the pandemic, according to the Centers for Disease Control and Prevention.

It is difficult to determine the number of people who did not receive services due to inadequate behavioral health coverage — which encompasses mental health and substance abuse — but there is little question the total is considerable.

In a March report, the Government Accountability Office concluded that consumers “experience challenges finding in-network providers” and “with restrictive health plan approval processes and plan coverage limitations, which can limit their ability to access services.”

In a January report to Congress, the Labor Department, which enforces the terms of 2 million workplace plans, said that during fiscal 2021, it had recouped $20,000 for a family that was shortchanged for coverage of a child’s autism. It also said it had required parity from two plans covering 1.2 million people that paid for nutritional counseling for medical conditions such as diabetes but did not cover it for mental health problems such as eating disorders.

Examples such as those barely scratch the surface of the parity problem. When the consulting firm Milliman looked at the issue for a 2019 report, it found that consumers were more than five times as likely to have to use out-of-network providers for inpatient, outpatient and office behavioral care than for analogous medical services. Reimbursement for primary medical care was 23.8 percent higher than for behavioral care, Milliman found in data for 2013 to 2017.

People seeking inpatient care for a substance abuse disorder were 10 times more likely to have to find it outside their insurance network than those seeking inpatient medical and surgical care, the report concluded.

“I think it’s unfortunate how much more distance we have to go before we meet the letter or the spirit of the law,” said Ali Khawar, acting assistant secretary of the Labor Department.

The pandemic, in addition to stressing Americans, threw a spotlight on the mental health workforce shortage and other defects in the system, several insurance officials said.

“Not every problem with behavioral health is a mental health parity violation,” said Pamela Greenberg, president and chief executive of the Association for Behavioral Health and Wellness, which represents insurer interests in mental health. “And that’s where we have gone with mental health. … We expect every problem to be solved through the mental health parity lens. The workforce shortage is one of them.”

Kate Berry, senior vice president of clinical affairs and strategic partnerships for AHIP, the association of health insurers, said: “We don’t have enough providers in the system, in our country. And there’s no short-term fix to that.

“I would definitely say the pandemic has exacerbated what has been a long-standing mismatch between the need and the supply,” she said.

The industry has called for more use of telehealth visits and allowing providers with lesser credentials to shoulder more of the mental health care load as ways to stretch access to an overburdened behavioral health system.

Part of the problem also traces back to the government’s own enforcement regime, critics said, with myriad departments, agencies and states overseeing different types of health insurance, including Medicaid.

Some investigations can last years. The Labor Department, which oversees most workplace health coverage, closed just 74 parity investigations in fiscal 2021, finding violations in 12. The Centers for Medicare and Medicaid Services completed four investigations, finding one violation. The Labor Department also has never used its authority to refer noncompliant plans to the IRS for imposition of an excise tax of $100 per individual per day. It has sued a big insurer only once, joining New York’s attorney general in securing a $15.6 million settlement with United in August.

The Labor Department alleged that United systematically reimbursed for out-of-network mental health services more restrictively than it did for medical or surgical care, among other accusations. The company admitted no wrongdoing in the settlement.

States, some of which have their own parity laws, have levied fines just 13 times since 2017, according to a tally kept on the Kennedy Forum’s parity tracker.

Khawar said that under the law, the excise tax would be imposed on employers, not the insurance plans and benefit administrators that are typically responsible for violations. That makes the department more reluctant to use that penalty.

The Labor Department’s Employee Benefits Security Administration has spent years explaining the regulations to insurance companies, helping them move forward and cajoling them into compliance, to maximize benefits to consumers, he said. In some cases, it used the threat of the excise tax or a lawsuit, he added.

In 2021, Congress gave the agency new power to require companies to submit written comparisons of their medical and mental health coverage. None of the 156 analyses requested by the Labor Department or the 15 requested by CMS was sufficient when first submitted, according to the agencies’ January report to Congress.

Insurers contend that outcome proves the Labor Department still cannot explain the documentation it wants to allow comparisons of mental health and physical health coverage.

“The goal posts keep moving,” Greenberg said.

Deepti Loharikar, senior director of regulatory affairs at the Association for Behavioral Health and Wellness, said compliance would be easier “if our members knew exactly what regulators were looking for. It’s unclear what [they are] looking for.”

Khawar responded that insurers are well aware of the requirements after years of working with them.

Under President Biden, enforcement of mental health parity has become a top priority for the Labor Department, which is adding enforcement staff and has asked Congress for the power to impose civil monetary penalties on noncompliant insurers. The House already has approved that authority in the stalled Build Back Better legislation, and two Senate committees are looking at how to beef up enforcement in mental health bills working their way through the chamber.

“We have to do something,” Labor Secretary Marty Walsh said in an interview. “Now is the time to really put the foot on the gas and to make some significant investment in services and payment for services.”

There is general agreement that over the years, insurers have improved parity in the provision of “quantitative treatment limitations” — rules that govern, for example, the number of visits a patient is entitled to, or the size of a deductible.

The focus now is on upgrading parity in “non-quantitative treatment limitations,” obstacles such as determinations of prior authorization and medical necessity that aren’t easily enumerated in coverage determinations. All sides agree they are more difficult to police.

“The two most significant barriers to care erected by the industry are medical necessity and network inadequacy,” said Meiram Bendat, founder of the law firm Psych-Appeal and one of DeeDee Tillitt’s lawyers in a class-action lawsuit that advocates consider a landmark case for mental health parity.

Tillitt, for example, argued in legal filings that United relied on guidelines for covering her son’s care that were more restrictive than commonly accepted standards for substance abuse and mental health treatment. The lawsuit seeks to define standards insurance companies must follow.

United said in a statement: “We are committed to ensuring all our members have access to care and to reimbursing providers consistent with the terms of the member’s health plan and state and federal rules. Over the last several years, we have taken concrete steps to improve access to quality care” by adding providers and via telehealth platforms, among other steps, the company said.

Max Tillitt was a healthy, athletic teen until a violent helmet-to-helmet collision in a football practice left him with a concussion and continued neck and back pain, according to his mother and her court filing.

He spiraled into addiction that began with his pain medication, relapsing “seven or eight times” before he landed at Beauterre, DeeDee Tillitt’s lawyers wrote. His longest stretch of sobriety in more than five years lasted seven weeks, according to the lawsuit. He twice tried to kill himself by overdosing, according to the court papers.

But her son seemed to take to Beauterre, enjoying the pastoral setting, Tillitt said. He and his fiancee had a child on the way, and after years of addiction, she said, he appeared to be making some progress.

“This was the first time we really had hope,” DeeDee Tillitt said. “He was at the right place at the right time, finally. He was just making great progress.”

In a letter denying Max Tillitt further care at Beauterre, provided by his mother, a United official wrote: “You have been able to get off drugs. You have made progress in the program. You do not have extreme health or emotional problems, including from coming off drugs. You do not need 24-hour nursing care. Your care could go on in a less restrictive setting, such as outpatient.”

After Beauterre appealed, United followed up with a letter four days later that listed other progress Tillitt had made. “You have been able to move towards recovery by identifying triggers or issues that often lead to substance usage,” it said. “Your mood and sleep have seemed to improve as well,” it added. United acknowledged that he needed more treatment, but not in a residential setting.

Max Tillitt was discharged without a treatment plan, according to court papers and his mother. It took two weeks to get him into an outpatient program. DeeDee Tillitt recruited friends and family to keep watch over her son 24 hours a day, every day, until arrangements could be made, she said.

But her son did not fare well and died 10 weeks later, in September 2015. “If he had been allowed to stay in Beauterre, I believe he would still be alive,” Tillitt said. “If he was in there for a heart attack, they’d never say, ‘We’re going to send you home now, even though you might have another heart attack.’”

Though the class-action lawsuit was brought in a California federal court under the Employee Retirement Income Security Act, advocates consider David Wit et al v. United al Health a milestone in the enforcement of mental health parity.

In his 2019 ruling, federal Chief Magistrate Judge Joseph C. Spero wrote that “internal UBH communications … make it crystal clear that the primary focus of the guideline development process … was the implementation of a ‘utilization management’ model that keeps benefit expenses down by placing a heavy emphasis on crisis stabilization and an insufficient emphasis on the effective treatment of co-occurring and chronic conditions.”

Spero added that the company’s guidelines were seen internally as important in “‘mitigating’ the impact of the 2008 Parity Act.”

But in March, a three-judge panel of the Ninth Circuit Court of Appeals reversed the decision. The judges wrote that the “plaintiffs did not show that the plans mandate coverage for all treatment that is consistent with [generally accepted standards of care].”

United said in a statement “we are pleased with the court’s ruling and continue to support our members with the mental health care services they need, when they need it, as part of our broader commitment to accessible, quality care.”

Bendat and other attorneys have appealed for a rehearing of the case by the full Ninth Circuit panel of judges.