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Delay sought for mental parity rules

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WASHINGTON—Groups representing employers are asking the Employee Benefits Security Administration to delay the application of mental health parity regulations for at least a year, saying they were caught off guard by certain provisions and have been distracted by the passage of health care reform.

The groups assert that a postponement of the interim final rules for implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which were slated to take effect July 1, is justified so that government agencies can consider how the recently enacted federal health care reform law might affect compliance.

In particular, plan sponsors are concerned that if they make design changes to fulfill the mental health parity requirements, they will lose their “grandfathered” status, which makes them exempt from certain provisions in the Patient Protection and Affordable Care Act.

Because the PPACA also requires employers that set up new health plans to cover preventive care services at 100% for plan years beginning on or after Sept. 23, 2010, the PPACA also could impede those plans' ability to pass the cost-sharing tests in the mental health parity regulations, according to comments submitted by the Washington-based American Benefits Council, the National Retail Federation and the U.S. Chamber of Commerce.

A previous attempt to suspend the regulations by the Coalition for Parity, a group of managed behavioral health organizations, was stymied April 1 when the U.S. District Court for the District of Columbia denied its request for a temporary restraining order and ordered an expedited briefing on the merits.

The group had argued that “the rules were promulgated in the absence of notice and comment,” which is required under the Administrative Procedure Act. However, the government countered that the rules were adopted with the “express statutory authority” of the secretaries of Labor and Health and Human Services after they had determined that “without prompt guidance, some members of the regulated community may not know what steps to take to comply with the requirements” of the MHPAEA.

Briefing on the case is completed and a ruling is forthcoming.

A spokeswoman for the Labor Department said it is not unusual for comment letters to request that regulations be delayed, but she was uncertain as to how likely that was to actually happen.

But Kathleen Mahieu, health management practice leader at Hewitt Associates Inc. in Norwalk, Conn., said she'd be surprised if they didn't grant the delay because of the sheer volume of comments that were submitted—approximately 5,450, according to the DOL—and the fact that health care reform has taken center stage.

“I can't imagine they'll be able to review all of those comments and create final regulations that reflect those comments by July 1 with everything else that's going on,” she said. “What employers must do to comply (based on the interim final rule) is much more extensive than what we saw under the original legislation.”

Moreover, “a lot of what they're doing on parity is going to impact what employers and insurers do on health care reform,” Ms. Mahieu said. For example, “will complying with parity affect their ability to be grandfathered?”

“I would hope that they would consider extending the effective date,” she said.

Because the interim final rule was not issued until Feb. 2, much later than had been expected, many employers had attempted to comply with the law using their own best judgment, said Kathryn Wilber, senior counsel, health policy at the ABC in Washington. Unfortunately, that judgment proved wrong and now employers are scrambling to comply, she said.

Sharon Cohen, an attorney with Towers Watson & Co. in Arlington, Va., said that when her firm analyzed some employer plans, it found that while they may meet the quantitative tests, such as cost-sharing, they often fail the nonquantitative tests, which includes the use of medical management.

Under the interim final rule, employers must provide essentially the same level of coverage for behavioral health care as for medical/surgical care. In addition, they cannot subject behavioral health care treatment to any more stringent medical review requirements than those imposed on medical/surgical benefits, she said.

“The interim final rules go above and beyond where we expected them to go,” said Steve Wojcik, vp for public policy at the National Business Group on Health, a consortium of the nation's largest employers based in Washington.

“It's going to require a lot more plan changes to ensure compliance, so we feel there's more time needed. NBGH also is asking for a delay because of the complexity of implementing both mental health parity and the health reform law,” he said.

Stella Antonakis, senior consultant in national clinical practice at Buck Consultants L.L.C.'s in San Francisco, said employers using behavioral health carve-out models are being challenged by a provision in the interim final rule requiring that the same deductible be applied to medical/surgical and behavioral health benefits.

“It doesn't preclude employers from having carve-outs, but some are concerned administratively about how they will meet the requirements and are worried about noise from employees if the vendors are not able to share information” about claims that apply to the deductible, she said.

“The concern has more to do with medical plan sharing information. Historically, the behavioral health vendors have been more open. Medical vendors are not as flexible,” Ms. Antonakis said.

Gretchen Young, senior vp for health policy at the ERISA Industry Committee in Washington, said application of the single deductible for medical and mental health coverage also is one of its biggest concerns.

“For us, this just came out of left field,” she said.

She added that the final interim regulations failed to define a health plan, so it is unclear at this point whether parity also applies to retiree-only plans as well as those covering active employees.

“Perhaps it is unprecedented” for the agencies to delay implementation, Ms. Young acknowledged, “but there are issues that have to be addressed. We can't turn on a dime.”