It may soon get easier for poor, mentally ill Americans to get treatment, but not in a psychiatric hospital.
Medicaid plans got an initial roadmap from the federal government earlier this month, with a rule proposing directions for how they should conform to a 2008 law known as mental health parity. The law requires insurers to cover mental health services on an equal footing with physical health services.
It’s intended to correct a longstanding problem of insurers either refusing to cover care like therapy or prescription drugs for the mentally ill or covering them at a lower rate. Rules governing private plans had already been released, but this latest rule applies to Medicaid, which is by far the largest payer of mental health services in the U.S.
The proposed rule — which may not be finalized for another year or two — will have varying effects around the country, as the state-run Medicaid programs offer different mental health benefits. Mental health advocates agree that, broadly speaking, it will improve access for the mentally ill because insurers must remove limits on coverage for services they’re already offering.
What it won’t lift is a longstanding federal ban on using federal Medicaid dollars for stays in private psychiatric hospitals and state mental hospitals. That has some mental health advocates worried, amid recent concerns that the seriously mentally ill are getting marginalized.
“Medicaid still will not pay for long-term hospital care for mentally ill adults, but will for all others,” said D.J. Jaffe, director of Mental Health Policy Org. “This policy causes hospitals to lock the front door and open the back, forcing people with the most serious mental illnesses to become homeless and incarcerated.”
“I would venture this is going to apply to things more like psychotherapy and not so much around the long-term side of this,” said Matt Salo, director of the National Association of Medicaid Directors.
Andrew Sperling, director of the National Alliance on Mental Illness, echoed those concerns and said there’s something else his group doesn’t like about the rule: It allows insurers to continue putting limits on access to prescription drugs if they provide a rationale, like arguing they’re incentivizing consumers to use generic drugs.
“It’s not so good — we didn’t get much of a win on that,” Sperling said.
The biggest changes will take place in states with leaner Medicaid programs, which include Southern states like Texas, Mississippi and Alabama. While all state Medicaid programs offer some mental health services, they’re not required to do so, and many cap benefits for services like rehab, psychotherapy and prescription drugs.
“If you have a patient with schizophrenia and also diabetes but you’re limited to five prescription drugs a month, that’s tough,” Sperling said.
The parity rule applies only to Medicaid managed care plans and alternative benefit plans — types of plans that are becoming increasingly popular over traditional fee-for-service because they can save states money and provide recipients with a wider network of providers. It also applies to the Children’s Health Insurance Program.
It’s taken the Obama administration years to issue the rules for the parity law, which was passed back in 2008. Medicaid plans and stakeholders have until June 9 to submit comments, and the administration will issue a final rule at some point after that.
The American Psychiatric Association said it’s still analyzing the lengthy rule, and deciding on comments to submit, but shares questions about how or whether it would improve long-term care for the seriously mentally ill, like those with schizophrenia or bipolar disorder.
Besides the limitation on Medicaid paying for care in psychiatric hospitals, plans also tend to deny coverage for residential care for patients going through drug rehab or following a suicide attempt. But advocates argue that’s not fair — pointing out that the same plans would typically cover physical therapy following an accident or operation.
“It’s been difficult for adults and children to always get appropriate access to these very needed services,” said Harsh Trivedi, chairman of the APA’s Council on Healthcare Systems and Financing.
Trivedi said the APA wants the final rule to be clearer on exactly how insurers must ensure parity for long-term care for the mentally ill.
“Some plans have basically decided that doesn’t count as equity, so we are hoping there will be an expansion of that definition,” he said.
