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NJ Gets Report Card ‘F’ for Lack of Parity in Insurance Coverage of Mental Health

Advocates give New Jersey — and more than half of other states — a poor grade for failing to support and enforce federal law

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New Jersey may have received a failing grade in a new national survey of state efforts to ensure parity when it comes to behavioral health insurance benefits but it wasn’t alone, with 31 other states — including several of its neighbors — also failing.

The report card was released Wednesday by ParityTrack, an advocacy and leadership organization founded by former U.S. Congressman Patrick Kennedy, now a Garden State resident. ParityTrack seeks to evaluate how states are supporting and enforcing a 2008 federal law that prohibited health insurance companies from making it more difficult or costly for patients to access mental health or substance-use disorder (SUD) benefits than it would be for them to get coverage for physical ailments.

New Jersey, with 54 out of 100 points, was one among many states to receive an F, although its score was far from the lowest. The state’s score was attributed to how state law defines mental health and addiction conditions, how these are covered, and how related laws and regulations are monitored and enforced.

The nationwide findings, released at an event at the Morehouse School of Medicine in Atlanta, come just three weeks after a New Jersey Assembly panel advanced a bill that would likely address many of the gaps flagged in the study. Kennedy and other advocates for parity have been pushing state legislatures to adopt measures to better ensure behavioral health care is covered at par, and the Garden State has been among their recent targets, supporters said.

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The report, Evaluating State Mental Health and Addiction Parity Laws, involved a systematic search of state statutes to identify how mental health diagnoses and SUDs are defined and used, how these laws govern insurance coverage, and how regulatory and law enforcement agencies are monitoring and enforcing the laws that do exist.

The mandate for fair coverage is grounded in the Mental Health Parity and Addiction Equity Act of 2008, which Kennedy championed, but while the law is federal, monitoring and enforcement largely fall to the states. In addition, the 2008 law only governed certain insurance policies — generally those held by larger employers — leaving states to pass additional statutes if they wanted to extend these protections to small and individual plans.

While the 2010 federal Affordable Care Act, or Obamacare, made behavioral health an essential benefit, states still shoulder much of the regulatory burden.

“Despite the efforts of policymakers, advocates, and other stakeholders, major coverage and access disparities persist a decade later” from the 2008 law, the report noted.

No coverage for one in nine diagnosed adults in NJ

The report cards note key statistics, like the prevalence of mental illness and the scope of insurance coverage. In New Jersey one in six adults are diagnosed with a psychiatric condition, close to the national average, and one in 15 children, which is fewer than the one in 12 found to have mental illness nationwide. One in nine diagnosed adults here lack insurance coverage, compared with one in seven nationwide, and one in 20 children with behavioral health issues in the Garden State lack coverage, versus one in 13 nationwide.

Dr. Benjamin F. Miller, the chief strategy officer at Well Being Trust, a national organization dedicated to mental and social health that contributed to the report, said state laws are a critical foundation for regulators, providing them a structure for ensuring fair coverage and access to care.

“Without strong parity laws, it’s basically a lottery as to what kind of care a person might get — there is seemingly zero accountability and little-to-no transparency,” he said. “Patients, providers, and policymakers often cannot know whether a health plan is providing access to mental health services as it should.”

The issue is particularly important as many states face rising numbers of deaths by suicide and mental illness, researchers said; New Jersey is expected to lose some 3,000 residents to alcohol or drug-related fatalities this year, nearly double the number who died of these issues in 2016 — although adult suicides are on the decline in the Garden State.

And while insurance providers are spending more to address these needs — Horizon Blue Cross Blue Shield, the state’s largest insurer, spends hundreds of millions of dollars annually on addiction care and saw these costs rise 350 percent between 2013 and 2017 — according to a report in July, patients and advocates insist there remains a real disparity between benefits and access to care for behavioral and physical coverage. The situation is exacerbated by the growing lack of psychiatrists and other mental-health providers here and nationwide, and the fact that some physicians are shunning insurance networks entirely, frustrated with the reimbursement structure and administrative work involved.

Illinois scored 100

The best ParityTrack report card went to Illinois, which scored 100 points and was the only state to receive an A, based largely on its adoption and implementation of a new statute — similar to the one proposed in New Jersey. At the bottom, with just 10 points and an F, ranked Wyoming, which does not address mental-health parity in its state laws.

Most states — 43 total — scored poorly, with 32 states getting an F (0 to 59 points) and 11 more receiving a D (60 to 69 points) in the report. With only one A and no B grades awarded, the second-highest score went to Tennessee, which amassed 79 points for a C grade. Maine placed third, with 76 points, also for a C.

When it comes to neighboring states, New York and Pennsylvania also failed, with 53 and 55 points respectively. Even states with traditionally strong healthcare systems fared poorly: California collected 51 points for an F and Massachusetts amassed just 60, barely snagging a D grade.

“Most states have not enacted strong state parity statutes, which would ensure that state regulators have a full set of tools to make parity a reality, in large part by holding both health plan executives and state officials accountable,” according to the report, compiled by researchers from Morehouse School of Medicine and national groups representing behavioral health providers and policy makers.

Phillip Lubitz, advocacy director for NAMI-NJ, the local chapter of the National Alliance on Mental Illness, agreed the big takeaway is that states have a long way to go to ensuring true parity when it comes to behavioral health coverage. New Jersey is burdened by an outdated definition of mental illness in the existing relevant law, he said, which has at times been used to exclude coverage for things like eating disorders or post-traumatic stress disorder.

Up to states to regulate

In the Garden State, NAMI-NJ, the Mental Health Association of New Jersey, and other advocates testified mid-September to support relevant legislation (A-2031) sponsored by Assembly Speaker Craig Coughlin (D-Middlesex), assemblywoman Valerie Vainieri Huttle (D-Bergen) and a growing list of colleagues in both political parities.

The legislation would expand the definition of behavioral health services, specifically including treatment for alcohol and drug abuse, as well as benefits for autism. It would also eliminate references to “biologically based” conditions, which Lubitz and others said were employed in the past to limit coverage.

The measure also places greater responsibility on the state Department of Banking and Insurance and on the insurance companies it regulates. Insurance companies would need to submit a list of all behavioral health claims they deny, alongside a list of denied medical claims, and would be required to clearly defend decisions they make regarding care authorization or medical necessity.

Representatives of the insurance industry have urged lawmakers to hold off on adopting more parity statutes until the federal government provides guidance — expected later this year — on an issue at the heart of the debate: how to assess and monitor non-quantitative treatment limitations (NQTL).

The New Jersey Association of Health Plans, which represents the state’s nine insurance carriers, declined to comment on the report card Thursday afternoon.

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