Proposed rule: Medicaid insurers must cover mental health benefits

Medicaid insurers would be required to provide the same mental health and substance abuse coverage to their members as private plans do under a new proposed rule from by the Centers for Medicare & Medicaid Services.

The regulation, which applies the 2008 mental health parity law to Medicaid, would mean insurers cannot impose hard limits on, for example, the number of mental health visits members they pay for each year. Insurers also would have to explain why they deny members access to treatment and/or services.

Plus, insurers wouldn't be allowed to carve out mental health or substance-abuse treatment from their Medicaid managed care contracts. Even if states previously let insurers split benefits into a separate behavioral health plan, Medicaid members would be protected under the proposed rule.

"It's significant," Timothy Jost, a professor at the Washington and Lee University School of Law, told the Wall Street Journal. "A significant number of people with mental health problems are on Medicaid."

Former Rhode Island Congressman Patrick Kennedy, who was the lead author of the parity law, said he hopes the proposed legislation will help correct many of the issues found in mental health coverage among private plans. These problems include the National Alliance on Mental Illness's findings that health plan fall well short of providing mental health and substance abuse coverage, as FierceHealthPayer previously reported.

"We have a lot of lessons learned already on the failure of parity to be enforced in commercial plans," Kennedy told Kaiser Health News.

Although some insurers welcomed the proposed rule, they're still concerned about the logistics of actually providing mental health coverage. Mario Molina, CEO of Medicaid insurer Molina Healthcare, said he supports applying the parity law to Medicaid plans but also worries about the shortage of mental health providers who participate in Medicaid. "It won't impact the number of providers, but it will increase demand for them," he told KHN.

To learn more:
- here's the CMS proposed rule
- read the Kaiser Health News article
- see the Wall Street Journal article