Health Law Daily Wrap Up, TOP STORY: CMS clarifies mental health and substance use disorder parity rule, (Oct. 12, 2017)
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Thursday, October 12, 2017

Health Law Daily Wrap Up, TOP STORY: CMS clarifies mental health and substance use disorder parity rule, (Oct. 12, 2017)

By Rebecca Mayo, J.D.

CMS issued a letter to clarify the Mental Health and Substance Use Disorder Parity Final Rule for Medicaid and the Children’s Health Insurance Program (CHIP) using Frequently Asked Questions (FAQ). The FAQs clarified what benefits are subject to the parity analysis, when to apply non-quantitative treatment limits analysis, and documentation compliance (Frequently Asked Questions: Mental Health and Substance Use Disorder Parity Final Rule for Medicaid and CHIP, October 11, 2017).

The Final rule was intended to ensure that Medicaid and CHIP beneficiaries retain parity with private health insurance plan beneficiaries in regard to mental health and substance abuse treatment being treated the same as surgical or medical benefits (see Medicaid MCOs ABPs, CHIP join the mental health parity party, March 29, 2016). The Final rule requires affected plans to disclose information on mental health and substance use disorder benefits, determinations of medical necessity for these services, as well as reasons for denial of reimbursement or payment for these types of services.

Benefits. The parity requirements apply to all medical/surgical (M/S) and mental health and substance use disorder (MH/SUD) benefits that are provided through an Alternative Benefit Plan (ABP) in a state Medicaid program, though CHIP, or to enrollees of a Managed Care Organization (MCO) regardless of who furnishes the services. If separate CHIPs use an MCO to provide benefits, there is flexibility for either the MCO or the state to conduct the parity analysis but they should work together to ensure compliance with the parity requirements. Non-emergency medical transportation (NEMT) is exempt from parity requirements. For long-term services and supports (LTSS) that could be defined as either MH/SUD or M/S, the state may define the benefit using a reasonable method.

NQTL. States are not required to apply the non-quantitative treatment limits (NQTLs) analysis to eligibility determinations and eligibility criteria for participation in a Medicaid program. The National Correct Coding Initiative (NCCI) does not require an NQTL analysis under the Medicaid and CHIP parity rules. States or managed care plans must conduct the NQTL analysis to determine if the prior authorization requirement for outpatient MH/SUD benefits complies with parity. State and MCO NQTLs intended to ensure compliance with state licensure laws are not impermissible.

Documentation Compliance. If a managed care contract specifies that the MCO is required to provide a notice for adverse benefit determinations in the event of payment denials, this is sufficient in documenting compliance as part of the parity analysis. States are not required to document authorization denial rates as part of the NQTL analysis, however it is recommended that states develop monitoring strategies to ensure ongoing parity compliance. All MCO contracts must require parity compliance and CMS will review parity provisions in MCO contracts as part of the normal contract review process.

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