Obamacare Significantly Reduces Cost of Mental Health Care for Young Adults

The Affordable Care Act (ACA) has significantly reduced out-of-pocket behavioral health care costs for adults 19 to 25, according to a study published in the Psychiatric Services Journal. Young Latinos, African Americans, and other racial and ethnic minorities saw the greatest reduction in out-of-pocket behavioral health expenses. This demographic often has higher unemployment and lower salaries, so they are less likely to seek behavioral health services. The ACA’s dependent coverage provision has reduced the number of uninsured young adults by at least three million. The ACA allows young adults to remain on their family’s health plans until they turn 26. Because of this, the expansion of health care access is also expected to increase the number of users of mental health and substance abuse treatment services. Behavioral health conditions often emerge during the 19 to 25 year age range. Also, this age group has a higher rate of serious mental illness than other adults.

State Finalizes Medical Provider Network Rules

The California Dept. of  Insurance has issued final regulations that include requirements for health insurers to create and maintain adequate medical provider networks. “These regulations go into effect immediately because they address a number of critical problems consumers have faced with insurers when seeking timely access to care,” says Insurance Commissioner Dave Jones. He had issued temporary emergency regulations, which have been in effect since late January 2015. The regulations require health insurers to do the following:

  • Include enough numbers and types of providers in the network to deliver covered services.
  • Adequately provide for the treatment of mental health and substance use disorders.
  • Include an adequate number of primary care providers and specialists with admitting and practice privileges at network hospitals.
  • Monitor and adhere to new appointment wait time standards.
  • Regularly report information about the networks and changes to the networks to the Dept. of Insurance for review.
  • Maintain accurate provider network directories available to the public and update them weekly.
  • Arrange out-of-network care at in-network prices when there are insufficient in-network care providers.

Study Looks At the Effectiveness of Health Policies

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The Health Care Cost Institute (HCCI) released six policy briefs that look at how national and state policies affect health care costs and utilization. Researchers looked at commercial claims data for more than 50 million insured Americans. The following are Key findings:

  1. Provider consolidation drives up spending on cancer treatment: The consolidation of outpatient practices drove significant increases in cancer treatment spending. Hospital outpatient departments and their affiliated clinics were able to charge insurers additional facility fees. Consolidation also increased the use of more expensive medicines and other outpatient care components.
  2. Unrestricted access to physical therapy reduces opioid use and lowers costs: Seeing a physical therapist as the first point-of-care for lower back pain reduces potentially costly services later on, including emergency department visits and use of prescription opioids. Patients who sought physical therapy first for lower back pain had significantly lower costs, including out-of-pocket costs, for physician, outpatient, hospital, and pharmacy care compared to patients who saw another type of provider.
  1. Nurse practitioners push down the price of primary care: Prices for primary care services fell 1% to 4% in states that allowed nurse practitioners to treat patients without a supervising physician. However, spending on health care increased. Higher total health care costs may be a result of increased volume in services, which may stem from increased access to care.
  2. Designing insurance benefits to incentivize patients to choose low-priced providers for colonoscopies can lead to savings of 8.5% per procedure: Medical spending would decrease by approximately $95 million per year if just three health insurers-Aetna, Humana, and UnitedHealthcare, adopted a reference-based payment program for colonoscopies. These estimates were modeled on the health care savings of the California Public Employees’ Retirement System (CalPERS).
  3. Reimbursement for telehealth services is nearly 40% lower than non-telehealth care: Telehealth claims submitted by primary-care providers have increased from 1,246 claims in 2009 to 2,558 in 2013. But they continued to be reimbursed at lower rates. While many states permit reimbursements for telehealth services, only seven states have passed laws that mandate reimbursement parity between telehealth and non-telehealth care.
  4. Mental Health Parity law has a limited effect on access to mental health services: The Mental Health Parity and Addiction Equity Act (MHPAEA) has had little to no effect on access and use of mental health services for patients with depression, bipolar, or schizophrenia.

Californians Are Encouraged To Explore Mental Health Coverage

The California Assn. of Marriage and Family Therapists (CAMFT) urges Californians to investigate mental health coverage during open enrollment. Under California law, psychotherapy may be much more affordable than most people assume. The Affordable Care Act and the Mental Health Parity and Addiction Equity Act require insurers to provide behavioral health coverage to treat mental health disorders or substance abuse  that is comparable to coverage for treatment of physical health with no annual limits. Despite robust access to affordable mental health care, many policyholders are not utilizing it to their full benefit. Often, the obstacle is a lack of information about the available options. The website, CounselingCalifornia.com, allows consumers to search for local therapists who accept clients with managed care plans.

Exchange Plans Block Access Mental Health Drugs

Exchange Plans Block Access Mental Health Drugs
Health exchanges have made it hard for patients to get medications for mental health, according to a recent fact sheet from Pharmaceutical Research and Manufacturers of America (PhRMA). The following are excerpts from a fact sheet from the organization:

We have seen a number of states where there are barriers to getting meaningful coverage for the medicines that physicians prescribe. We’ve seen a significant amount of aggressive utilization management, particularly for classes like anti-psychotics. We see placement of medicines on the highest (4th and 5th) tier where medicines face not a copay, but coinsurance. High cost sharing can often be a significant barrier; and we’re very concerned with that. We’ve also seen aggressive use of step therapy and “fail first,” in which an individual patient has to fail first on a particular compound before getting access to the one their doctor prescribed. That’s concerning because treatment failure can be very complicated for someone living with mental health disorders. Even when a patient rebounds, they may never get back to where they were. We have real concerns about high use of step therapy and prior authorization in these exchange plans. We’re hearing the most complaints about the use of step therapy and prior authorization.

Mental Health Bill Reintroduced

Chairman Tim Murphy (R-PA) and Rep. Eddie Bernice Johnson (D-TX) reintroduced the Helping Families in Mental Health Crisis Act, H.R. 2646. The revamped bill builds upon the previous bipartisan version. H.R. 2646. It breaks down federal barriers to care, clarifies privacy standards, expands parity accountability, invests in services for the most difficult to treat cases, and drives evidence-based care. Rep. Murphy said, “We are moving mental health care from crisis response to recovery, and from tragedy to triumph.”

The Helping Families in Mental Health Crisis Act was first introduced in December 2013, following a yearlong investigation led by Oversight Chairman Murphy into the nation’s broken mental health system. The investigation revealed that the federal government’s approach to mental health is a chaotic patchwork of antiquated programs and ineffective policies across numerous agencies.

As documented in a recent Government Accountability Office (GAO) report, 112 federal programs intended to address mental illness aren’t connecting for effective service delivery. Also, there is a lack of inter-agency coordination for programs supporting people with serious mental illness.

While the federal government dedicates $130 billion towards mental health each year, the mental health system is best described by its deficits. To name just a few:

  • There is a nationwide shortage of nearly 100,000 needed psychiatric beds.
  • Three of the largest mental health hospitals are criminal incarceration facilities.
  • Privacy rules frustrate physicians and family members and generate nearly 8,000 official complaints a year.
  • Only one child psychiatrist is available for every 2,000 children with a mental health disorder.
  • The leading federal mental health agency does not employ any psychiatrists.

The Helping Families in Mental Health Crisis Act of 2015, H.R. 2646 would do the following:

  • Create an Assistant Secretary for Mental Health and Substance Use Disorders with mental health credentials within HHS. The assistant secretary would elevate the importance of mental health in the nation’s leading health agency, coordinate programs across different agencies, and promote effective evidence-based programs.
  • Require the Assistant Secretary for Mental Health and Substance Use Disorders to make public all federal investigations into compliance with the parity law so that families and consumers know what treatment they have rights to access.
  • Establish a National Mental Health Policy Laboratory to drive innovative models of care and develop evidence-based and peer-review standards for grant programs.
  • Dedicate funding for the Brain Research Through Advancing Innovative Neurotechnologies Initiative.
  • Require psychiatric hospitals to establish clear and effective discharge planning to ensure a timely and smooth transition from the hospital to appropriate post-hospital care and services.
  • Provides additional psychiatric hospital beds for those with an acute mental health crisis who need short term (less than 30 days) immediate inpatient care.
  • Support advances in tele-psychiatry to link pediatricians and primary care doctors with psychiatrists and psychologists in areas where patients don’t have access to care.
  • Require the Assistant Secretary for Mental Health and Substance Use Disorders to study and recommend a national strategy to increase the number of psychiatrists, child and adolescent psychiatrists, psychologists, psychiatric nurse practitioners, clinical social workers, and mental health peer-support specialists.
  • Include child and adolescent psychiatrists in the National Health Service Corps.
  • Authorize the Minority Fellowship Program.
  • Authorize, for the first time in federal law, the Recovery After Initial Schizophrenia Episode (RAISE), an evidence-based early intervention program.
  • Reauthorize the National Child Traumatic Stress Network.
  • Launch an early childhood grant program to provide intensive services for children with serious emotional disturbances in an educational setting.
  • Provide incentives to states to offer community-based alternatives to institutionalization.
  • Reauthorizes the Garrett Lee Smith Suicide Prevention Program, invest in research on self-directed violence, and authorize, for the first time in the statute, the Suicide Prevention Hotline.
  • Extend health information technology for mental health providers to coordinate care with primary care doctors using electronic medical records.
  • Establishe an inter-agency Serious Mental Illness Coordinating Committee to organize, integrate, and coordinate the research, treatment, housing and services for people with substance use disorders and mental illness.
  • Ends the decades-old prohibition on physicians volunteering at community mental health clinics and federally qualified health centers.

Congressman Murphy, a psychologist with nearly three decades experience, has been a champion for reforming the broken mental health system. He yearly introduces the bipartisan congressional resolution declaring May as Mental Health Month, to end the stigma associated with mental illness and promote public awareness of mental health. He will soon advance a similar resolution recognizing the month of June as PTSD Awareness Month. A provision in the previous version of his Helping Families in Mental Health Crisis Act was recently adopted on the House floor. Murphy offered a bipartisan amendment with Rep. Michelle Lujan Grisham (D-NM) and Rep. Earl Blumenauer (D-Ore.) to the Commerce, Justice, Science and Related Agencies Appropriations Act of 2016, to advance and expand Mental Health Courts, a successful model of collaboration between criminal justice and mental health systems for those with serious mental illness.

Californians With Mental Health Issues Face Discrimination

Californians With Mental Health Issues Face Discrimination
Many California residents with mental health issues report discrimination in personal relationships and in the workplace, according to a RAND Corp. study. Just 41% of those surveyed say that people are caring and sympathetic to those with mental illnesses while 81% say that people with mental illness face prejudice and discrimination. More than two-thirds of said they definitely or probably would hide a mental health problem from co-workers or classmates, and more than one-third said they would hide their condition from family or friends.

Nearly 90% who had a mental health problem faced discrimination. Most often, they faced discrimination in intimate personal relationships, but they also reported high levels of discrimination at school, in the workplace, and from health care providers and law enforcement officials. However, Californians who are facing psychological distress are showing signs of resiliency. More than 80% of those surveyed have a plan for staying or becoming well and say they can meet their personal goals. In addition, about 70% of those surveyed said that they are satisfied with life. The large majority of respondents say that recovery from mental illness is possible and say they would seek treatment for a mental health problem if needed.

Proposition 63, which imposed a special state tax on people with incomes over $1 million, funds the California Mental Health Services Authority (CalMHSA). Wayne Clark, executive director of CalMHSA said, “This new report…highlights the need to confront stigma, and the opportunity to promote mental health in our state with the statewide stigma reduction efforts offered by CalMHSA.” The survey found that the mental health education campaign mounted by CalMHSA is reaching people facing psychological distress. About one-third of the people surveyed had been reached during the previous 12 months by the early intervention efforts, such as viewing the campaign’s documentary on ending stigma about mental illness. In addition, other activities that could be related to the CalMHSA efforts reached nearly 90% of the group during the previous 12 months.

Insurers Fall Short in Mental Health Coverage

Insurers Fall Short in Mental Health Coverage
Health insurance plans are falling short in coverage of mental health and substance abuse conditions according to a report by the National Alliance on Mental Illness (NAMI). The organization surveyed 2,720 consumers and analyzed 84 insurance plans in 15 states.

A federal parity law, enacted in 2008, requires mental health benefits in some employer-sponsored plans to be provided on the same terms as other medical care. Coverage was expanded under the Affordable Care Act (ACA) in 2010. However, the report finds the following problems with mental-health coverage:

  • A Lack of mental health providers is a serious problem in health insurance networks.
  • Nearly a third of survey respondents reported insurance company denials of authorization for mental health and substance abuse care. For ACA plans, denials were nearly twice the rate for other medical care.
  • More than half of health plans analyzed for the report covered less than 50% of anti-psychotic medications.
  • High out-of-pocket costs for prescription drugs discourage people from participating in mental health and other medical treatment.
  • High co-pays, deductibles, and co-insurance rates create treatment barriers.
  • There is a serious lack of information about mental health coverage that would enable consumers to make informed decisions in choosing health plans.

The report makes these recommendations:

  1. Strong enforcement of the 2008 parity law is needed at the federal and state levels, including establishing easily accessible procedures for filing complaints.
  2. Insurance companies should be required to publish the clinical criteria that’s used to approve or deny mental health and medical-surgical care.
  3. Health plans should be required to publish accurate providers lists in their networks and to update them regularly.
  4. The Dept. of Health & Human Services should require all health plans to provide clear, understandable, and detailed information about benefits and make this information easily accessible. HHS should develop tools to help consumers compare plans before enrollment.
  5. Congress and the Executive Branch must work together to decrease out-of-pocket costs under the ACA for low-income consumers.

FY 2016 Budget to Extend Medicare Mental Health Benefits

The fiscal year 2016 budget, released by President Barack Obama calls for elimination of a provision that limits Medicare beneficiaries to just 190 days of inpatient psychiatric hospital care during their lifetime. Mark Covall, National Association of Psychiatric Health Systems (NAPHS) president and CEO said, “Mental illnesses are the leading cause of disability and contribute to premature death. When people experiencing a mental health or addiction crisis cannot access needed treatment, families and communities are at risk. The President’s budget takes an important step forward to address arbitrary limits that prevent people from accessing the right treatment at the right time. There is no such lifetime limit for any other Medicare specialty inpatient hospital service.”

NAPHS also called on the Administration and Congress to address another discriminatory barrier in the Medicaid program. Adults (ages 21 to 64) with Medicaid don’t have coverage for short-term, acute care in psychiatric hospitals because of the “Institutions for Mental Disease (IMD)” exclusion. “The IMD exclusion is penalizing the disabled and poor. This policy adds to system inefficiencies and adds to the cost of care,” Covall said. Congress has taken bipartisan action to address this issue. Rep. Tim Murphy (R-physician assistant) has developed an NAPHS-backed comprehensive mental health reform plan, the Helping Families in Mental Health Crisis Act. It would create a pathway under Medicaid for people to get access to short-term acute psychiatric care. The measure, which has had bipartisan support, is slated to be reintroduced in the 114th Congress.

The Medicaid Emergency Psychiatric Care Demonstration is also underway in 11 states and the District of Columbia to show the value of giving adult Medicaid beneficiaries this type of access. Preliminary demonstration statistics show that the length of stay in psychiatric hospitals is very short (about eight days). Readmission rates are low (with 84% not returning to the hospital). People are able to go home or to self-care with hospitals’ community partners.

Have Insurers Found a New Way to Weed Out Members?

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Eliminating discrimination on the basis of preexisting conditions is one of the central features of the Affordable Care Act (ACA). But there is evidence that insurers are resorting to other tactics to dissuade high-cost patients from enrolling, according to a study by Harvard’s School of Public Health. The findings suggest that many insurers may be using benefit design to dissuade sicker people from choosing their plans. A recent analysis of insurance coverage for several other high-cost chronic conditions, such as mental illness, cancer, diabetes, and rheumatoid arthritis showed similar evidence of adverse tiering, with 52% of marketplace plans requiring at least 30% coinsurance for all covered drugs in at least one class. Thus, this phenomenon is apparently not limited to just a few plans or conditions.

A formal complaint submitted to the Dept. of Health and Human Services (HHS) in May 2014 contends that Florida insurers offering plans through the new federal exchange had structured their drug formularies to discourage people with HIV from selecting their plans. These insurers categorized all HIV drugs, including generics, in the tier with the highest cost sharing.

Insurers have used tiered formularies to encourage enrollees to select generic or preferred brand-name drugs instead of higher-cost alternatives. But if plans place all HIV drugs in the highest cost-sharing tier, enrollees with HIV will incur high costs regardless of which drugs they take. This effect suggests that the goal of adverse tiering is not to influence enrollees’ drug utilization, but to deter certain people from enrolling in the first place.

Researchers analyzed adverse tiering in 12 states using the federal marketplace: six states with insurers mentioned in the HHS complaint (Delaware, Florida, Louisiana, Michigan, South Carolina, and Utah) and the six most populous states without any of those insurers (Illinois, New Jersey, Ohio, Pennsylvania, Texas, and Virginia).

Researchers found adverse tiering in 12 of the 48 plans — seven of the 24 plans in the states with insurers listed in the HHS complaint and five of the 24 plans in the other six states. There were stark differences in out-of-pocket HIV drug costs between adverse-tiering plans and other plans. Adverse tiering plan enrollees had an average annual cost per drug of more than triple that of enrollees in regular tiering plans ($4,892 vs. $1,615), with a nearly $2,000 difference even for generic drugs. Fifty percent of adverse tiering plans had a drug-specific deductible, compared to only 19% of other plans.

Enrollees may select an adverse tiering plan for its lower premium, only to end up paying extremely high out-of-pocket drug costs. These costs may be difficult to anticipate, since calculating them would require knowledge of an insurer’s negotiated drug prices — information that is not publicly available for most plans.

Second, these tiering practices are likely to lead to adverse selection, with sicker people clustering in plans without adverse tiering. Over time, plans offering generous prescription-drug benefits may see a large influx of sick enrollees, which would reduce profits and lead to a race to the bottom in drug-plan design. The ACA’s risk-adjustment, reinsurance, and risk-corridor programs provide some financial protection to insurers whose enrollees are sicker than average. But the existence of adverse tiering in 2014 suggests that selection opportunities remain. Furthermore, the reinsurance and risk-corridor programs will be phased out after 2016, which will only increase insurers’ incentives to avoid sick enrollees.

Price transparency is one approach to address unexpectedly high out-of-pocket costs for people with chronic conditions. Insurers could be required to list on their formulary each drug’s estimated price to the enrollee, based on the negotiated price and the copayment or coinsurance. However, price transparency would probably accelerate the adverse-selection process if adopted in isolation.

One would be to establish protected conditions in drug formularies. Medicare Part D has designated several protected classes of drugs, including those used for HIV, seizures, and cancer. A similar approach in the exchanges could set an upper limit on cost sharing for medications for protected conditions. Such a policy would reduce financial exposure for people with these conditions even if they chose sub-optimal plans. Other safeguards for protected conditions could also be implemented, such as limits on prior-authorization requirements.

An important additional step would be to require marketplace plans to offer drug benefits that meet a given actuarial value, meaning that the percentage of drug costs paid by the plan (rather than the consumer) would have to exceed a particular threshold. This level could be set at the actuarial value for a given plan (i.e., 70% for silver plans) or above it. In order to significantly increase cost sharing for one drug, an insurer would have to reduce cost sharing for another drug. This step is crucial because it encompasses treatment of all health conditions, not just protected conditions and addresses non–formulary-based methods of passing costs on to consumers that may induce adverse selection (e.g., drug-specific deductibles), according to the report.

Stopping adverse drug tiering will not completely eliminate discrimination in the insurance marketplace. Some insurers will think of new ways to dissuade sick enrollees from joining their plans. Eliminating premium discrimination on the basis of health status was one of the ACA’s chief accomplishments in the non-group insurance market and one of the law’s most popular features. Preventing other forms of financial discrimination on the basis of health status — with the attendant risks of adverse selection in the marketplace — will require ongoing oversight, according to the report. The ACA has already made major inroads in designing a more equitable health care system for people with chronic conditions, but the struggle is far from over

Last Updated 10/09/2019

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