Push to Improve Insurance Coverage of Mental Health for New Jerseyans

Legislators advance measure seeking to ensure same level of benefits as for medical issues. It could ease financial burden on families

sad woman mental health
Roxanne Schwartz and her family have been wrestling with addiction and mental illness for decades and have paid a high price: the death by overdose of her sister, her sons’ hospitalizations and a suicide attempt by one of them, and the $300,000 they paid out of pocket for treatment for the boys, even though they were insured.

New Jersey lawmakers yesterday advanced a measure that could potentially ease the financial part of the burden on families like the Schwartzes, who live in Hunterdon County. The legislation requires that insurance companies cover behavioral healthcare services — treatments for mental health issues and substance use disorders — at the same benefit level as for medical care.

The bill, approved unanimously by the Assembly Financial Institutions and Insurance Committee, would require health insurance companies to submit data each year to demonstrate to state regulators that their coverage is meeting the requirements of a 2008 federal “mental health parity” law, a mandate that prevents insurance companies from erecting barriers to behavioral health coverage beyond those that exist for medical or surgical claims. The measure, which echoes reforms adopted in several other states, also calls for the state to issue an annual report to the Legislature.

“The need for health care is not limited to physical ailments,” said Assemblywoman Pamela Lampitt (D-Camden), a lead sponsor of the bill. “People who are dealing with these problems deserve our help, not our indifference. This will help ensure equal coverage of treatment for mental illness and addiction.”

Not receiving proper benefits

Despite the federal mandate, Schwartz, a mental health advocate who goes by Rocky, and others have claimed that their behavioral health coverage was not administered fairly and, despite long and frustrating appeals, they did not receive the benefits to which they were entitled.

Others report they must wait weeks to get an appointment, given the limited number of available psychiatric providers in their insurance networks. The issue has taken on new urgency for some with the explosion of the opioid epidemic, which has killed more than 2,000 New Jersey residents this year.

“It should be no more restrictive than (coverage for) physical care,” noted Barbara Johnston, director of policy and advocacy for the Mental Health Association of New Jersey.

Patient advocates also said it is nearly impossible for them to determine parity since insurance companies control most of the data involved. The legislation would level the playing field, they explained, by significantly improving the transparency of the decisions that insurance companies make on behavioral health claims.

Assemblywoman Valerie Vainieri Huttle (D-Bergen)
“Individuals who are struggling with a mental illness or addiction should not have to jump through hoops to get help,” said Assemblywoman Valerie Vainieri Huttle (D-Bergen), another sponsor.

Battling for coverage

New Jersey now has one of the most robust requirements nationwide when it comes to treatment coverage of substance-use disorders, thanks to a law former Gov. Chris Christie signed last year — something that may have helped the Schwartz family, whose battles for coverage largely predate the law. And while medical treatment might seem to involve clear-cut decisions, it may be harder for clinicians and family members to agree on the best course of care for a behavioral health patient, leading to claims disputes.

But there is general agreement that the goals of the 2008 federal parity act have not all been met, even though the requirements were reiterated in the 2010 federal Affordable Care Act.

While some elements of parity are fairly straightforward, like ensuring a similar number of covered visits for behavioral health and medical providers, other coverage decisions — such as when prior authorization is needed, or what constitutes medical urgency — can’t always be applied in the same way to behavioral health as they can in medical care, insurers note.

Ward Sanders, president and CEO of the New Jersey Association of Health Plans
Ward Sanders, president and CEO of the New Jersey Association of Health Plans, which represents nine insurance companies that do business here, urged lawmakers to hold off until the federal government issues long anticipated guidance on these aspects of parity, known as non-quantitative treatment limitations (NQTL), which he expects to be released later this year. In the current draft of the state bill, insurance companies would need to submit to the state detailed information on the methods and sources they currently use to determine the validity of behavioral health claims.

“We want to make sure … that we don’t have New Jersey branching out in a different direction than federal law,” Sanders said. “For consumers sake, for carriers sake, for providers sake, consistency is important.”

Business interests opposed measure

The New Jersey Business & Industry Association also opposed the measure based on concerns it would drive up costs for employers; the measure is expected to expand coverage, with new benefits for some services that currently are excluded and increase administrative costs. Both Sanders and the NJBIA urged lawmakers to also refer the measure to the Mandated Health Benefits Advisory Commission, which provides lawmakers with detailed input on the impact of such laws but does not issue rulings.

The full Assembly voted in strong support of a similar measure in June 2017, but the bill did not advance in the Senate during that legislative session. Yesterday, the Assembly committee took up the matter again, (A-2031) and adopted a substitute version that appeared to make minor changes to the text to ensure the legislation complied with other healthcare laws.

The legislation amends several existing insurance and healthcare laws and provides a broad definition of behavioral health services that includes treatment for drug and alcohol abuse, replacing a list of specific psychiatric disorders considered eligible for treatment. The bill also seeks to expand benefits for autism services and eliminates references to “biologically based” conditions, a distinction once used to limit coverage.

Advocates said the measure is similar to laws passed in a number of other states, including Connecticut, Illinois and, as of earlier this year, Delaware. It calls on the state Department of Banking and Insurance to provide detailed information to defend its decisions concerning behavioral health claims, including the frequency of prior authorization requests, a description of the process used to determine medical necessity, and a list of all NQTLs that notes the factors involved and the standards cited. Companies would also need to submit a list of all the behavioral health claims they denied, alongside a list of the medical claims they declined to pay.

If adopted, the measure would apply to all plans sold on the state’s individual insurance market, small business market and to all public employees, including school staff. It would not impact the state’s Medicaid members, residents covered by Medicare, or those who have self-insured plans, which are governed by the federal government.

“The intent of the legislation is to expand coverage for behavioral health care services and ensure residents receive the best care without judgement or insensitivity to their situations,” said Assembly Speaker Craig Coughlin (D-Middlesex), another lead sponsor of the bill.