Gaps in insurance laws force families to seek costly out-of-network mental health care

By: - September 27, 2022 6:43 am

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Even as the Covid-19 pandemic ushered in more acceptance and understanding of mental and behavioral health needs, Nevada and the nation face the associated battle for mental health parity – ensuring health insurance companies cover mental and behavioral health equally to physical health.

Mental health parity, as described by the National Alliance on Mental Illness (NAMI) means “if you are provided unlimited doctor visits for a chronic condition like diabetes,” then insurance plans “must offer unlimited visits for a mental health condition such as depression or schizophrenia.”

Federal laws establish that insurers can’t charge higher costs, limit availability of  in-network mental health providers taking new patients, or deny coverage by contending mental health care wasn’t medically necessary, without explaining why to the person seeking services, according to NAMI.

But federal laws do not require all insurers to provide mental health coverage. And parity laws do not apply to all insurers that do. The parity laws do not apply to Medicare, and a variety of exceptions and exemptions apply to other forms of health coverage, according to a Kaiser Family Foundation report.

And an investigation of 30 health insurance plans and issuers by the U.S. Department of Labor, U.S. Department of Health & Human Services, and the U.S. The Department of the Treasury found that all 30 were out of compliance with with the mental health parity requirements that are on the books.

‘…then what?’

The inconsistencies in the provision of behavioral health parity coverage have pushed therapists and behavioral health professionals away from providing services within insurance networks, in turn erecting barriers to access as people cannot find in-network mental health care providers, according to NAMI.

“Therapy is a long-time process,” Sheldon Jacobs, a family therapist in Southern Nevada and national board member for NAMI said. “If it’s taking two, three, four sessions for a client to get familiar and comfortable with their therapist and they’re only approved for eight sessions … then what? You may only have four sessions of working on the core issue.”

The first attempt to address parity between physical and mental health happened under the federal Mental Health Parity Act of 1996 (MHPA), which stated that large group plans can’t impose annual or lifetime limits on mental health benefits that are less than the limits that apply to medical and surgical benefits. 

Enacted a dozen years later, the The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) aimed to strengthen accountability for health plans and insurers who failed to comply, but it is limited in scope. 

Even when mental health providers push for more sessions to be covered for their clients, ensuring compliance with insurance companies can be a challenge, Jacobs said. 

“With the parity piece there have been some federal laws that have been passed these last few years that are holding these insurance companies more accountable,” he said. “A lot of times when it comes to mental health it isn’t as visible as a physical injury is or a physical illness is.” 

Not only is convincing insurance to provide more sessions more challenging because of how mental and behavioral health conditions manifest, but there are also still people in the health care industry who don’t “see mental health as health” Jacobs said. 

Since the federal law establishes standards for parity if a state has stricter laws, insurers must comply with those laws as well, according to NAMI. 

Nevada lawmakers last year passed AB181, strengthening accountability for insurers who violate parity laws with the Nevada Division of Insurance (DOI) overseeing the requirements. 

In Nevada, 32% of those with insurance are covered by group market plans through an employer, 20% are insured through Medicaid and CHIP, and 17% are insured with Medicare and Medicare Advantage plans. Those three groups make up the bulk of the state’s insured population, according to the DOI. 

Each of those insurance providers is regulated under different entities, such as the Department of Labor, the Department of Health & Human Services and the Centers for Medicare & Medicaid Services. 

DOI regulates individual and small group market plans, which cover approximately 7% of the state’s population, but the department wasn’t able to break down which insurance companies covered most Nevadans. 

Forced out-out-of-network

Regulators notwithstanding, Nevadans, like most Americans, were more likely to receive mental and behavioral health care out-of-network from their provider than for medical and surgical treatment, according to the 2019 Milliman Report.

In Nevada, 26.6% of people seek in-patient care out-of-network for behavioral health compared to just 2.6% for medical and surgical care. For outpatient out-of-network care, that number jumps to 55.7% for behavioral health compared to 4.5% for medical and surgical services, according to the report, which uses data through 2017. 

Insurance companies aren’t paying providers “right away for their service or are paying them a really low rate,” Jacobs said. “What’s happening is a lot of providers are leaving private insurance and taking cash pay clients.” 

Leaving private insurance companies’ network allows mental and behavioral health providers to get paid quicker and avoid the red tape that comes with ensuring their clients’ sessions can continue, he said.

Jacobs said one solution could be having more mental and behavioral health professionals sit on insurance panels, which are a group of medical professionals that work with an insurance company to provide services to their clients. When therapists sit on these panels they can better leverage their professional experience to ensure insurance companies understand how mental health symptoms manifests and comply with parity laws.

But there are not any requirements to ensure that at least one mental or behavioral health provider must serve on these insurance panels, he said. 

“Sometimes these panels don’t have a mental health professional on them,” Jacobs said. “That’s where the issue is and I can’t say that’s the case every single time, it does vary… but as a [mental] provider it can be a head-scratching moment when you can’t get on these boards because you have people who don’t understand this issue making these decisions.”

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Camalot Todd
Camalot Todd

An award-winning, investigative and enterprise reporter, Camalot Todd has over seven years experience in print, digital, radio and TV journalism.