Sunday, November 10, 2013

The New York Times Editorial Board on Parity

The New York Times Editorial Board came out with a comment on mental health parity entitled Equal Coverage for the Mentally Ill.  Like most sources with no knowledge of how mental health treatment works in this country - their outlook was very rosy.  I am  sure that is what the authors of the original bill - the late Senator Paul Wellstone and Senator Pete Domenici were hoping for.  Let me tell you why that is not going to happen.  As I followed the link to who is actually on the Editorial Board it is probably significant that there is nobody with health care expertise.  Even if there was the national press has a naive approach to health care and seems to present a distinctly politicized and business friendly viewpoint.  I would generally characterize that as a view that is very short on quality and long on cost effectiveness rhetoric.  The press seems to uncritically accept that "high quality cost effective" health care is the goal of businesses and governments.  Nothing could be farther from the truth.

The actual Rule that was published yesterday is a 205 page document.  It is written in a style that defies comprehension by anyone who is not a Congressional insider or an attorney.  Despite being highly acclaimed by a number of organizations including the American Psychiatric Association (APA) there is a surprising lack of details in why this is some sort of advance.  I go into this with thirty years of experience battling managed care in its various forms and needless to say I am no friend to that approach.  I know that the real goal is for managed care companies to make money and they make money by denying care and providing low quality care.  I also know that governments at all levels are very friendly to the managed care cartel and have bought their theology.  Practically all health care legislation is managed care friendly and the PPACA (Obamacare) facilitates super managed care organizations called Accountable Care Organizations.  With that backdrop and realizing that like most other people, I lack the legal qualifications to read this document, here are a few of my impressions:

1.  Medical necessity - there are 44 references to medical necessity in the document.  There is some concern about transparency.  It is quite easy for a managed care company to tell a person or their physician, pharmacy, or hospital that they are not covering a service because it is not "medically necessary."  This generally means that the company can employ doctors who can arbitrarily deny services.  In Minnesota in the 1990s, several psychiatrists were concerned that these companies were discharging people from hospitals prematurely and they insisted on seeing the actual criteria for these decisions.  They were advised that they were "proprietary" and not available.  The new Rule seems to demand adequate disclosure of these criteria.  Even if it did, the disclosure of this information is irrelevant.  In fact, there are criteria in use right now that are essentially made up on financial information and they have nothing to do with psychiatric treatment.  Unless there is an actual appeal process to a neutral party who has the power to overturn these decisions, managed care companies will continue to do whatever they want.

2.  Utilization review - there is one reference to utilization review (UR), a managed care tactic that is basically designed to harass physicians into discharging patients from a hospital based on the financial demands of the managed care company.  An example would be serial calls to a physician treating a patient with suicidal ideation.  The attending physician who sees the patient every day is concerned that the patient has a significant suicide risk and wants to continue to treat them on an inpatient basis.  The reviewer who is an employee of the managed care company, is sitting in a room several states away, and has never seen the patient and has no professional responsibility to them decides the patient is not at high risk and that they should be discharged from the hospital.  This leads to a series of unproductive conversations and forces the physician working with the patient to call him every day to justify keeping the patient in the hospital.  In many ways dealing with this process is like dealing with a bill collector.  The only difference is that you are paying a penalty for doing  your work and being responsible to a patient.

The rule seems to suggest that the amount of UR done is not a problem as long as it is equally applied across both mental health and general medical surgical services.  There are major problems with that idea.  The first is a decade long initiative by the managed care industry to internalize utilization review by case managers.  They claim these case managers are part of some kind of imaginary patient care team.   In fact they are there applying business standards to force physicians to discharge patients.  The second problem is that UR is completely unnecessary.  Managed care companies have huge financial leverage.  They reimburse a set amount per admission/discharge diagnosis that is a discounted rate.  The only conceivable uses for UR today are to pressure inpatient physicians and to create an incentive through internal UR to increase profits by managing discounted rates.  That happens when a hospital receives a fixed payment for what is probably a 5 day hospitalization and they now have UR by case managers to get physicians to discharge these patients in 3 days instead of 5.  There is no major psychiatric condition requiring hospitalization that  responds to three days of treatment.

3.  Small employer exemption - the Mental Health Parity And Addiction Equity Act (MHPAEA) does not apply to small employers:

 "MHPAEA and the regulations under it do not apply to employers with 50 or fewer employees (although, separately, the EHB regulations adopt MHPAEA)."   

According to the Census that eliminates about 34 million people or about the same number of uninsured that the PPACA purports to cover for the first time.  It also defeats the concept of parity.  But it turns out there are a lot of exceptions.  So who knows the total number of people who will be not even be covered:

"MHPAEA requirements do not apply to:
  • Non-Federal governmental plans that have 100 or fewer  employees;
  • Small private employers who have 50 or fewer employees;
  • Large group health plans that are exempt from MHPAEA based on their increased cost.  Large group health plan sponsors that make changes to comply with MHPAEA and incur an increased cost of at least two percent in the first year that MHPAEA applies to the plan (the first plan year beginning after October 3, 2009) or at least one percent in any subsequent plan year (generally, plan years beginning after October 3, 2010) may apply for an exemption from MHPAEA based on their increased cost. If such a cost is incurred, the plan is exempt from MHPAEA requirements for the plan year following the year the cost was incurred. Subsequently, the plan sponsors must notify the plan beneficiaries that MHPAEA does not apply to their coverage.  These exemptions last one year. After that, the plan is required to comply again; however, if the plan incurs an increased cost of at least one percent in that plan year, the plan could claim the exemption for the following plan year. The following set of FAQ’s provide additional information related to the application of MHPAEA. In particular, see Q. 11 for a discussion of the processes by which plans may claim a cost exemption; and
  • Self-funded non-Federal governmental employers that opt-out of the requirements of MHPAEA.  Non-Federal governmental employers that provide self-funded group health plan coverage to their employees (coverage that is not provided through an insurer) may elect to exempt their plan (opt-out) from the requirements of MHPAEA by following the Procedures & Requirements for HIPAA Exemption Election posted on the Self-Funded Non-Federal Governmental Plans webpage (See, then issuing a notice of opt-out to enrollees at the time of enrollment and on an annual basis. Thereafter, the employer must also file the opt-out notification with CMS"

4.  This bill will have no impact on gun violence.  You can't assess and treat potentially violent and aggressive people in a rationed, low quality system of care that is run by case managers bent on getting people out of the hospital.  There are many better suggestions on this blog but they require a system of quality care and professionalism.

5.  The bill will not save any money.  It should be painfully apparent that delegating the management of health care in the United States to a profit motivated middleman is a recipe for health care inflation.  That point is routinely lost on politicians and journalists.  The other point that these folks never seem to get is that managed care companies have in many cases acquired the means of production that they had sought to control.  This creates an additional conflict of interest.  If you now own all of the MRI scanners, you have an interest in seeing them run 24/7 especially when they might be covering a significant part of your hospital costs.  That might explain what an MRI of the C-spine is $1,500 in the US and $150 in Japan.

6.  The rule is doomed if the Editorial Board is serious about it depending on enforcement by state insurance commissioners.  The members of the Board must not have ever filed a complaint with a state insurance commission.  In many states it is difficult to find the state agency responsible for taking complaints against managed care companies.  Unlike Medical Boards, insurance complaints are often a well kept secret.  There are often pro-insurance and pro-managed care statutes in state law and industry insiders on the commission.  In my experience, the only hope state residents have against the managed care industry is an activist Attorney General.  Activist AGs happen about once a decade.    

These are all huge deficiencies in a Rule that is supposed to assure parity between mental health and substance use disorders and general medical surgical treatment.  Combined with pressure for collaborative care in primary care clinics, it is very easy to imagine that this Rule will not make any difference at all.  That is my preliminary take on the Rule with my previously stated qualifiers.

I fully expect a business friendly government to continue to be an obstacle to the provision of quality mental health and addiction services largely due to the conflict of interest it creates when it uses private businesses to make money by denying care at several levels.  But the New York Times won't be telling you that.

George Dawson, MD, DFAPA

Final Rule on Mental Health Parity.  Federal Register.  November 13, 2013.


  1. I think we'd have a stronger argument for parity if everything bad that happens in life wasn't a mental disorder. For example, if diagnosis was limited to the original RDC criteria, parity would be noncontroversial (except maybe for drug and alcohol addiction and today most people would accept that). But the APA wants everything by government fiat cost be damned. That's not realistic, and under ACA things are going to get rationed. If it comes down to a kid's cancer treatment vs. something psychiatric, mental health is going to lose that argument.

  2. Possibly but managed care has already greatly simplified that for us. The only indication for hospitalization is "dangerousness" or being "suicidal." They don't really give a damn what the diagnosis is or even the fact that their reviewer is essentially saying they can determine dangerousness and suicidality better than the responsible clinician - even though they are sitting in an office several states away.

    So kids aren't being deprived of cancer treatment, the mentally ill are being deprived of competent care.