Landmark Legislation Signed into Law

From NAMI California by Gabby Hyman, Editor, October 3, 2008

In a victory for consumers and families, The House of Representatives today approved landmark mental health parity legislation that will outlaw discrimination by health insurance providers when paying for treatment for Americans suffering from mental illnesses or substance abuse. The 263-171 vote, approving the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, was part of the financial bailout package signed by President George Bush.

In its inclusion of the Wellstone Act, the House ended a 20-year struggle for parity for consumers and family members, and a 12-year battle led by Senator Paul Wellstone and, following his death, his son David. It is estimated that roughly 67 percent of adults and 80 percent of children requiring mental health services do not receive help, in large part because of discriminatory insurance practices

In sum, the bill represents a triumph for those who have struggled for decades to receive equal health insurance coverage from their employers or from self-paid health plans without artificial limits on inpatient/outpatient visits (in or out of network) or for emergency care to treat mental illness, dual diagnosis, or substance abuse. The legislation applies to group health plans of 51 or more employees.

As written (courtesy of the House bill text), the legislation:

• Requires group health plans to apply the same beneficiary financial requirements to mental health or substance-related disorder benefits as they apply for medical and surgical benefits, including limits on deductibles, co-payments, and out-of-pocket expenses.
• Revises the definition of "mental health benefits" to include substance-related disorder benefits.
• Requires plan administrators to make the criteria for medical necessity determinations with respect to mental health and substance-related disorder benefits available to plan participants, beneficiaries, or providers upon request.
• Sets forth the minimum scope of mental health and substance-related disorder benefits under a group health plan. Requires such plans offering out-of-network coverage to apply the same coverage offered for medical and surgical services to mental health and substance-related benefits.
• Allows group health plans an increased exemption of 2% of the actual costs of coverage of mental health and substance-related disorder benefits in the first plan year after initiation or 1% in each subsequent year. Revises the similar exemption for small employers.
• Makes the amendments made by this Act applicable to plan years beginning on or after January 1, 2009, and to group health plans under a collective bargaining agreement at the expiration of such agreement or by January 1, 2009.
• Requires the Secretary of Labor to: (1) annually sample and conduct random audits of group health plans to determine compliance with this Act; and (2) provide assistance to plan participants and beneficiaries in complying with the requirements of this Act.
• Declares that nothing in this Act preempts state laws that provide greater consumer protections and benefits than those provided by this Act.
• Increases from 15.1% to 20.1% after December 31, 2008, and before January 1, 2015, the minimum Medicaid drug rebate percentage drug manufacturers must agree to for covered outpatient drugs.
• Amends title XVIII (Medicare) of the Social Security Act to set forth new requirements for the hospital exception to the general prohibition against physician referral of Medicare patients for certain services to facilities in which such physicians or their immediate family members have financial interests (self-referral).
• Requires hospitals to develop procedures to prevent conflicts of interest, ensure bona fide investment, and safeguard patients. Requires the Secretary of Health and Human Services to establish policies and procedures to ensure compliance with such requirements and to conduct audits to determine if hospitals have violated such requirements.
• Increases the amount available to the Physician Assistance and Quality Initiative Fund (PAQI Fund) in 2013.
• Requires the Comptroller General to: (1) evaluate the effect of the implementation of this Act on the cost of health insurance coverage and related matters; (2) submit biannual reports to Congress on obstacles faced by individuals in obtaining mental health and substance-related disorder care under their health plans; and (3) report to Congress on the availability of uniform patient placement criteria for mental health and substance-related disorders for guiding determinations of medical necessity.

Finally, Equal Rights to Treatment and Coverage

Despite oppositions from many employers and insurance companies who claimed the legislation would drive up costs, the House version of the bill (as well as the Senate version passed recently), prohibits limitations on coverage or increased co-pays for treatment.

According to bill proponents, many of the 35 million Americans who suffer from mental illness or substance abuse diseases each year will finally receive assistance as a result of what is being termed the Civil Rights Act of the new millennium.

The bill pivots on the distinction of parity: equal treatment for insurers, no matter the illness. Typical annual limits include 30 visits to a doctor or 30 days of hospital care for treatment of a mental disorder. Such limits would no longer be allowed if the insurer had no limits on treatment of conditions like cancer, heart disease and diabetes. Insurers could still deny coverage if they find that a service is not medically necessary.

“Illness of the brain must be treated just like illness anywhere else in the body,” Speaker Nancy Pelosi, Democrat of California, told The New York Times.

“I have a mental illness, and I am fortunately getting the best care this country has to offer because I am a member of Congress,” said Representative Patrick J. Kennedy, Democrat of Rhode Island and chief sponsor of the House bill. Mr. Kennedy has been treated for depression and drug dependence.

The main Republican sponsor, Representative Jim Ramstad of Minnesota, a recovering alcoholic, said, “I am living proof that treatment works and recovery is real.”

“This is a historic day and a great civil rights victory for millions of Americans who have been unable to access mental health treatment,” said David Shern, Ph.D., president and CEO of Mental Health America. “With approval of this bill, we will tear down the walls of stigma and discrimination and the open the doors to the power and promise of treatment and recovery. It recognizes that mental health disorders are every bit as debilitating, and just as treatable, as cancer and diabetes. With economic problems making it even harder for Americans to afford treatment and driving up rates of depression and family difficulties, passage of this law is even more important.”

"This bill is a major achievement, one I know my dad would be proud of," said David Wellstone. "This bill will go a long way to ease the pain and suffering of those with mental illness and addiction, and I am proud to have been part of this effort. It's a great day."

In addition to thanking Wellstone, Representatives Kennedy and Ramstad for their vigilant efforts, NAMI California expresses gratitude for the tireless efforts of Senators Pete Domenici (R-NM), Edward M. Kennedy (D-MA), Mike Enzi (R-WY) and Christopher Dodd (D-CT).

Read the entire Wellstone portion of the Bill, click here.

References: The New York Times, Wellstone.org, The U.S. House of Representatives, Mental Health America

Source: NAMI California