Finally, a final rule for parity — and not only is it out, but it goes even farther than the interim final rule (IFR), retaining the Non-Quantitative Treatment Limitation (NQTL) provisions and clarifying that residential treatment is included, as is intensive outpatient treatment, as an “intermediate” level on a par with nursing homes and rehabilitation facilities. Providers and advocates for patients have been waiting for more than five years for the final rule. Issued on November 8 and published in the Federal Register November 13, the final rule implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) was heralded as a victory by the Parity Implementation Coalition (PIC).

Two significant goals were achieved:

  • No more secret proprietary criteria — the ultimate NQTL that was created by managed care in the 1980s and almost destroyed the entire treatment field. Plans must disclose in writing an analysis of how the NQTLs are applied on medical and behavioral conditions, including what processes, strategies, evidentiary standards and other factors are used to apply them. During an appeal, the plan must provide the patient with any new evidence used to make benefit decisions. The NQTL provisions were included in the IFR; some insurance companies took the government to court over it, and lost.
  • Residential is saved — patients don’t have to stay in hotels or pay for their own bed and board while they are in residential treatment, and intensive outpatient treatment is included as well. This is a completely new protection in the final rule, which clearly compares residential and intensive outpatient to levels of care that are on the medical side.

In addition, patients can go out of network and out of state for substance abuse treatment as long as they can do so for medical conditions. And finally, a catchall exception allowing insurance companies to deny treatment based on undisclosed clinical standards has been eliminated.

Carol McDaid, co-chair (with Sam Muszynski of the American Psychiatric Association) of the Parity Implementation Coalition (PIC), pointed out that the MHPAEA and the final rule are not mandates. “Nothing says that all plans must cover intermediate levels of care,” she said. “It says that if a plan covers intermediate levels for medical and surgical, it must cover them for behavioral.”

Battle not over

McDaid cautions against thinking the battle is over, however. Noting that managed care has been treating addiction one way for the past two decades, she noted that it isn’t going to be easy to get them to change — and that it’s incumbent upon treatment providers to do so. This includes checking the patient’s entire benefit package, not just the behavioral package, so parity violations can be ascertained.

“While the regulations are very good news, they are just a beginning,” agreed Philip Herschman, Ph.D., chief clinical officer of CRC Health Group, which was very active in helping to achieve a strong final rule. “We have to see if the enforcement is carried out effectively to assure equal ability to obtain addiction services as physical healthcare,” he said. “I am glad they upgraded from the interim rule that excluded a residential level of care; it was wrongly perceived as a step down from inpatient.” Some insurance companies, he said, had used this to redline coverage for residential addiction treatment.

Medicaid managed care

On the downside, patients in Medicaid managed care have only the MHPAEA law as protection; the final rule doesn’t apply. ADAW broke the news that this might be a problem in March, when it uncovered a letter to Medicaid directors with vague language about Medicaid (see ADAW, March 18). While this means that Medicaid managed care can’t have day or dollar limits for substance abuse and mental health that are any stronger than those for medical treatment, these plans might be able to use NQTLs and restrict residential. The PIC has requested clarification on this.

“The final rules do not apply to Medicaid managed care organizations [MCOs], alternative benefits plans or the Children’s Health Insurance Program,” said Mark Weber, spokesman for the Center for Medicare and Medicaid Services (CMS). He added that “CMS expects that states will apply the MHPAEA statutory requirements to these authorities and MCOs.” If states want to make their managed Medicaid plans adhere to the final rule, they can by amending their state plans or waivers to address “financial limitations, quantitative treatment limitations, non-quantitative treatment limitations and disclosure requirements in ways that promote parity,” he said. “CMS will offer technical assistance to states regarding strategies to implement MHPAEA.”

The final rule takes effect with plan years beginning July 2014, which for the most part means it takes effect January 2015.

For the final rule, go to

Bottom line
The final rule on parity, finally out 5 years after the law was signed, gives strong support to residential and other aspects of addiction treatment.