By: Kelly Dempsey, Esq.
Lawsuits and Department of Labor audits related to Mental Health Parity (MHP) violations are still arising. MHP is a shortened term that refers to the Mental Health Parity Act of 1996 (MHPA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), collectively, the mental health parity provisions in Part 7 of ERISA.
A recent case out of New York (Munnelly v. Fordham Univ. Faculty and Admin. HMO Ins. Plan, 2018 WL 1628839 (S.D.N.Y. 2018)) provides another court’s opinion on one of the hot topics of MHP – residential treatment facilities. The plan at issue denied participant claims for a residential treatment facility indicating that the plan contained exclusions for both residential treatment services and out-of-network inpatient mental health treatment. The plan contended that the interim final regulations were in effect at the time of the claims and thus the plan was in compliance with the rules (as the guidance that clarified MHP compliance with respect to resident treatment facilities was issued after claims were incurred). Additionally, the plan indicated the participant did not comply with the plan’s pre-certification requirements.
For certain portions of the case, the court decided in favor of the participant. The court found that the plan did violate MHP by placing a treatment limitation (excluding coverage for residential treatment facilities) on mental health/substance abuse benefits that was more restrictive than the medical/surgical benefits – in other words, there was no comparative medical/surgical exclusion. Ultimately the plan did not provide a remedy for the participant as there were still questions surrounding the precertification requirements and the application of the out-of-network treatment exclusion.
While the interim final rules were not clear, the final regulations do provide a clear explanation that plans must treat residential treatment facilities the same as skilled nursing facilities to show parity between MHP and medical/surgical benefits. This isn’t the first case about residential treatment facility exclusions and likely won’t be the last if plans do not review and update their plan documents to ensure compliance.
Like most hot topics, until it happens to your plan or your client, this issue isn’t in the forefront of our minds. There are strategies to control these costs which we know can be outrageous; however, plans must be careful when implementing cost containment as some ideas may not comply with MHP.