Psychiatr News September 16, 2005
Volume 40, Number 18, page 1
© 2005 American Psychiatric Association
Major Study of Parity Cost Proves Its Affordability
Kate Mulligan
A prominent health care economist calls a study of the effects of mental
health parity benefits for federal employees the "capstone" of
efforts to establish a research basis proving the affordability of
parity.
The time is right to push for parity in Medicare for mental health
benefits, including substance abuse, according to APA President Steven
Sharfstein, M.D.
A long-awaited report on the results of offering parity through the Federal
Employees Health Benefits (FEHB) program provides powerful evidence that can
be used to refute claims that parity is unaffordable.
The release of "Evaluation of Parity in the Federal Employees Health
Benefits (FEHB) Program: Final Report" came shortly before the
introduction of the Medicare Copayment Equity Act by Sens. Olympia Snowe
(R-Maine) and John Kerry (D-Mass.) in late May (Psychiatric News,
July 1).
APA's Department of Government Relations led the effort to develop the
legislation and mobilize support from the Mental Health Liaison Group, which
in addition to APA represents more than 30 professional and advocacy
organizations. The bill would end the 50 percent copayment required for
outpatient psychiatric services funded through Medicare (Psychiatric
News, July 1).
"We have yet another evaluation showing that parity does not break
the bank," said Sharfstein. "This study is particularly impressive
because it was national in scope and analyzed the effects of parity benefits
in the largest employer-sponsored health insurance program in the
country."
He added that President George W. Bush frequently has pointed to the FEHB
program as a model insurance program.
Health economist Thomas McGuire, Ph.D., offered another reason for the
importance of the FEHB study.
"It was done by the `first string,'" he said. "These are
the people and research organizations you would want to do the
work."
The participating organizations included the Health Solutions division of
Northrop Grumman Information Technology Inc., Department of Health Care Policy
at Harvard Medical School, RAND Corporation, University of Maryland School of
Medicine, and Westat.
The principal investigator was Howard Goldman, M.D., Ph.D., a professor of
psychiatry at the University of Maryland and editor of Psychiatric
Services. The study encompasses data from 1999 through 2002. The final
report was submitted to the Department of Health and Human Services and the
Office of Personnel Management at the end of 2004 and made public in May.
McGuire agreed with Sharfstein that the size and scope of the study give
weight to the findings. "The FEHB [program] evaluation is the capstone
of the line of research that has established the affordability of providing
parity of benefits in health insurance," he said (see box on
page 36 for key
findings).
McGuire is a professor of health economics in the Department of Health Care
Policy at Harvard Medical School and co-editor of the Journal of Health
Economics.
The report is timely because the Mental Health Parity Act of 1996, which
provides legislative authority for a limited federal parity mandate, will
sunset at the end of the year unless it is reauthorized. The act has been
reauthorized annually since 2002.
Study Examines Effects of Policy Shift
In January 2001 the Office of Personnel Management (OPM) implemented a
directive to the approximately 250 health plans providing benefits to federal
employees and their families through the FEHB program to comply with a policy
requiring that mental health and substance abuse (MH/SA) services be covered
to the same extent as general medical care with respect to deductibles,
copayments, and limits on physician visits and inpatient days.
Services to be covered were identified as "clinically proven
treatment for mental illness and substance abuse.. .conditions listed in the
DSM, Fourth Edition." OPM encouraged plans to manage the costs
of care by such methods as the establishment and use of network providers. OPM
did not require plans to provide parity in benefits for plan members who chose
to use out-of-network providers.
The parity policy represented a genuine change in MH/SA benefits for the
approximately 8 million individuals covered through FEHB insurance plans.
Before implementation of parity, 98 percent of the plans continuously
participating in the program over the four-year study period contained at
least one benefit feature that was more restrictive for MH/SA care. Some
health plans, for example, limited annual outpatient mental health care to 28
visits.
In fall 2000, the U.S. Department of Health and Human Services issued a
contract for a study to evaluate the implementation and impact of the new
policy in terms of changes in access, utilization, cost, quality of care, and
other issues. The research was also supported by six other federal
agencies.
Researchers Used Multiple Approaches
The list of key research questions included items that could be answered
using relatively simple methods. For example, researchers were asked to
determine whether the FEHB plans complied with the new policy. Through review
of plan documents and interviews, they determined that all plans complied.
But the list of questions also included items that required more
sophisticated and innovative methods of arriving at answers. Researchers were
asked to determine whether the quality of care was affected by the parity
policy and how providers "experienced" the policy.
Researchers studied data for major depression and substance abuse
disorders, two tracer conditions, to assess changes in quality of care for
these conditions. They compared claims information about treatment to
determine whether patterns of care were consistent with practice
guidelines.
Focus groups of psychiatrists, psychologists, and other mental health
personnel in different regions of the country helped determine how providers
experienced the change in policy. None reported a clear understanding about
how the parity benefit affected service provision, and some confused federal
with state parity requirements.
The most important set of questions concerned the impact of parity on cost,
access, and utilization of MH/SA services. It was important for researchers to
be able to separate the impact of parity on changes in those areas from
changes that would have occurred without implementation of parity.
To identify health plans that did not offer parity but did offer mental
health and substance abuse benefits typical of those offered by large
employers, Goldman and his colleagues turned to a database by Med-Stat, a
company that collects data about health plans.
"For purposes of comparison," he said, "we matched those
plans with a set of similar FEHB plans that did offer parity." The aim,
he said, was to come as close as possible to designing an experiment that
would determine whether changes in cost, access, and utilization were due to
the implementation of parity or to other health care trends.
Both the FEHB and the MedStat plans showed similar increases in the items
measured, suggesting that implementation of parity alone did not increase
cost, access, and utilization.
An important difference, however, between plans offering parity benefits
and those that did not was the cost to beneficiaries for MH/SA services.
When parity went into effect, all copays and limits were changed to comply
with the new policy. The median copay dropped from $20 to $10 per visit for
outpatient mental health services; for inpatient care, the respective figures
were $40 and $0.
"Users of services in most but not all plans experienced a decrease
in out-of-pocket spending, indicating that parity provided the intended
additional financial protection for MH/SA expenditures for many
enrollees," according to the report.
Use of Carveout Vendors Increased Slightly
Health care economist McGuire told Psychiatric News,
"Implementation of parity requires some form of cost-control measures in
order to be financially viable."
Studies of the effects of implementation of parity at the state level found
that costs typically increased "a few percent" and sometimes not
at all and that implementation was accompanied by increased use of carveouts
and other managed care measures intended to control costs (Psychiatric
News, September 19, 2003; June 21, 2002; June 7, 2002).
FEHB plans were asked to report "whether the health plan contracts
with a vendor—such as a managed behavioral health organization—for
management of behavioral health benefits." Information was also elicited
about whether carveouts were established post- or pre-parity and whether they
were established in response to the parity policy.
Researchers separated the FEHB plans into two groups for administrative
reasons. In the first group, 62 (26 percent) reported that they had carved out
benefits either in anticipation of, or in response to, implementation of
parity. Of the 156 plans in the second group, 103 (66 percent) reported having
a contract with a carveout vendor to manage behavioral health care benefits.
Eighty-one of the 103 plans, however, reported preexisting carveouts that were
implemented for reasons other than FEHB parity.
Darrel Regier, M.D., M.P.H., director of the American Psychiatric Institute
for Research and Education and APA's Division of Research, said, "The
report provides an excellent foundation for our ongoing examination of how the
implementation of parity affects psychiatrists and other providers of mental
health services, in addition to valuable new information about cost and
utilization."
He pointed out that important questions about the effects on the mental
health workforce and on patient care remain unanswered. Among them: Did parity
change the proportions of various kinds of mental health providers supported
through the FEHB program? Did parity impact access for patients in terms of
availability of specific kinds of providers?
With support from the American Psychiatric Foundation, Regier and his
colleagues have been conducting a survey of Washington, D.C.–area
psychiatrists to gain more information on the impact on psychiatrists and
patients' access to care. Parallel surveys are being conducted by the American
Psychological Association and the National Association of Social Workers.
"Although some questions remain about the impact of managed parity on
clinical practitioners," Regier said, "the study provides
convincing evidence that parity mental health benefits under the FEHB program
reduced out-of-pocket costs for patients—particularly for those using
inpatient services—and that ending discriminatory insurance coverage for
patients with mental disorders is a completely affordable national health
policy goal."
"Evaluation of Parity in the Federal Employees Health Benefits
(FEHB) Program" is posted at
<http://aspe.hhs.gov/daltcp/reports/parity.htm>.
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