Mental-health parity laws require oversight

Findings from the implementation of mental health parity in California:
  • Costs associated with parity were in line with, or even below, the projections.
  • Most health plans responded to the parity law by lifting limits on the annual number of days allowed for inpatient treatments and the number of visits allowed for outpatient treatment.
  • Concerns arose over the use of “medical necessity” clauses to authorize treatments and control costs. Medical necessity is typically defined as the need to supply a service for a condition that could endanger life or cause significant illness, suffering or disability and for which there is no adequate, less costly alternative available.
  • Consumers also complained about being referred to lists of mental-health providers only to find out that providers on the list were not taking new patients.
  • Health insurance providers felt the list of diagnoses covered under the parity law was arbitrary in excluding certain diagnoses.
  • Some doctors reported that they chose a parity diagnosis for a patient in order to ensure insurance coverage although it wasn’t the most accurate diagnosis. Some doctors said they had little flexibility to change a client’s diagnosis if he or she improved because they believed the health plan would then stop providing coverage for continuing care or care for a lesser diagnosis.
  • Nearly half of Californians polled in focus groups were unaware of the parity law.
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