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ACA Requires Parity Between Mental, Physical Disorders -- Will Insurers Comply?

Healthcare advocates and experts concerned about inpatient substance abuse treatment

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From the time he was 18 years old, Salvatore Marchese was trying to get treatment for his drug addiction. He bounced around from rehab facility to rehab facility but was always let go after 11 days because his insurance company wouldn’t cover treatment for longer than that.

In June of 2010, at the age of 26, Marchese was finally approved for state funding for treatment, but once again, his treatment was cut short after less than two weeks because his funding ran out. He was released, despite paperwork stating that he was a high risk for relapse. Three months later, he was found slumped in his car in Camden, dead, the apparent victim of a heroin overdose.

“We always struggled with insurance trying to get approvals, but there was never enough funding and/or beds to take him,” his mother, Patty DiRenzo of Blackwood, wrote on an online web site called Shatterproof. “He wanted help desperately but sadly never received the help he needed and deserved.”

While the Affordable Care Act mandates that insurance companies cover treatment for drug and alcohol addiction just as they would cover treatment for any other health condition, like diabetes or cancer, addiction specialists are still skeptical that kind of parity is going to happen, particularly for acute cases, like that of Marchese, which may require inpatient care.

“The good news is, the ACA does cover many addiction services. What is not necessarily being covered is long-term residential care, and in order to recover, people need long-term care, support services, a continuum, to stay well,” said Debra Wentz, chief executive officer of the New Jersey Association of Mental Health and Addiction Agencies.

The federal government does not pay Medicaid for treatment in “Institutions for Mental Disease,” or IMDs, which are defined as inpatient facilities with more than 16 beds and more than 51 percent of the facility population with a mental illness. The policy, put in place in 1965 when Medicaid was enacted, was meant to stop the federal government from paying what was largely considered a state and local expense. But that policy may now stop addicts from getting inpatient care.

“A lot of the residential substance abuse facilities are classified as IMDs, so that type of care is not paid for by Medicaid,” Wentz said.

Moreover, it’s not clear how many substance abuse providers are going to be included in the networks of most plans. While the ACA requires that there be so-called network adequacy, the state Department of Banking and Insurance is going to have to closely monitor the situation to ensure that insurance companies are including addiction treatment facilities in their networks, Wentz said.

“Mental health parity in commercial plans doesn’t have to start being implemented until July 1, 2014, so those networks may not be in place yet, but this is something we’re going to have to watch, to make sure they comply,” Wentz said, adding, “There’s a lot of potential under the new laws to get a lot more people covered for addiction treatment. There are a lot of positives. But there are still challenges we must work through.”

Skeptical About Success

Frank L. Greenagel Jr., a recovery counselor and adjunct professor at Rutgers School of Social Work, said he’s cynical about insurance companies complying with the parity rules because the act was passed in 2008, and to date, it still hasn’t led to any real changes.

“Until we actually see the law in effect, regardless of how it’s written, I just don’t have any confidence that anything will change,” he said.

Mental health services are now one of the 10 essential benefits all insurance companies must cover under the ACA. But some, like Greenagel, fear insurers will do their best to avoid covering addiction treatment, long considered the ugly stepchild of mental health coverage -- largely because many see addiction as willful misconduct rather than an illness.

“My experience has been insurance companies work very hard at paying for the lowest level of care that they can legally get away with and for the shortest amount of time. I don't know if the ACA will change that,” Greenagel said. “They employ smart lawyers and find therapists who will side with them in order to collect a paycheck.”

While the ACA was ratified in 2010, Congress had actually passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act two years earlier. The act, commonly referred to as the mental health parity act, required that insurance companies cover mental health the same way they cover physical ailments. The provisions of the parity act were folded into the ACA, but it’s taken a couple of years to hammer out the enabling regulations insurers must actually follow to achieve this parity. Interim regulations were passed in 2010, and the final regulations were passed last November, but the insurance industry’s non-compliance with the interim rules has addiction specialists skeptical that they will comply with the final rules.

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