THE pervasive view that mental illness was categorically different from physical illness has resulted in profound discrimination against those with mental-health conditions. One of the most far-reaching manifestations of this discrimination is how health insurers have refused or limited coverage for medically necessary mental-health care.
In landmark state legislation known as the Mental Health Parity Act, the Washington state Legislature addressed this discrimination directly. It passed what is, at least on paper, one of the strongest parity laws in the nation.
Fully effective in July 2010, it has two mandates. First, insurers must cover medically necessary mental-health services if they also cover medical and surgical services. Second, coverage must be delivered under the same terms and conditions as medical and surgical services.
What was promised, however, is not what is being delivered. Insurance companies quickly found ways to circumvent the law.
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Insurers still impose blanket exclusions on medically necessary mental-health care, limit their networks of mental-health providers and impose barriers to coverage under the guise of “utilization review.” The network limits force some consumers to travel many miles and hours to get the covered mental-health services they need. These discriminatory exclusions and limitations often do not appear in the text of an insurance policy.
For years, the Office of the Insurance Commissioner, led by Mike Kreidler,simply missed that these companies were limiting treatment, allowing millions of Washington residents with insurance to suffer unfair and illegal insurance discrimination.
Now, the office is finally taking action. It has issued a discussion draft of possible mental-health parity regulations. Those draft regulations need to be strengthened, finalized and enforced as soon as possible.
What more needs to be done? Plenty. But the following represent three good next steps:
First, get rid of blanket exclusions that apply only to mental-health services. The Office of the Insurance Commissioner needs to carefully comb through health-plan exclusions to ensure that the exclusions do not game the Parity Act.
Blanket exclusions of educational or habilitative services should be rejected because the exclusions really apply only to mental-health services. Mental-health therapies that are recognized by the medical community as necessary and effective must be covered, just as they are for non-mental-health conditions.
Second, eliminate hidden treatment limitations. Nearly all insurance companies use secret proprietary review criteria to determine what mental-health treatments will be approved or denied. These criteria are geared toward episodic treatment and do not apply to treatment of chronic mental-health conditions such as personality disorders and post-traumatic stress disorder (PTSD). Those conditions require long-term services.
Patients are routinely forced through a maze of bureaucratic review procedures to get authorization for treatment, and are often subject to arbitrary limits on diagnostic work and therapeutic care. These tactics must be transparent and subject to review by the insurance commissioner’s office, rather than buried in internal guidelines and provider-credentialing standards.
Third, shine light on bad practices. Federal and state laws allow patients to appeal denied claims, first through the insurer and then through an independent-review organization. But in Washington, there is no practical way to find the results of these independent reviews.
Transparency can end discriminatory denials. For example, California requires public posting of the results of all independent medical reviews of denied insurance claims. When the California Insurance Commissioner Dave Jones saw appeals involving autism services were reversed nearly 90 percent of the time, he issued a warning to all insurers that such de facto exclusions violated the law. Without disclosure of these decisions, the Washington commissioner and the public have no way to detect similar discriminatory denials.
Kreidler needs to end insurance discrimination. Without adequate enforcement by his office, private attorneys have filled the void, winning on an insurer-by-insurer, exclusion-by-exclusion basis. Such litigation is time-consuming and piecemeal.
The insurance commissioner needs to take systemic action so that the Parity Act’s promise to end discrimination in insurance coverage becomes a reality for all insured Washington residents.
Eleanor Hamburger, a partner at Seattle law firm Sirianni Youtz Spoonemore Hamburger, focuses on health-insurance coverage and class-action litigation. Sean Corry is a health insurance consumer advocate and president of Sprague Israel Giles, a Seattle insurance brokerage.