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Important Facts to Know about Health Insurance and Mental Health Services

Insurers ask for a medical peer review when they are not sure whether a claim should be accepted and whether the treatment provided was medically necessary. This review process helps in avoiding fraud and reducing healthcare costs. However, there is often a tussle between the insurance company and the covered individuals if the claim is denied. Typically, peer review physicians provide expert opinions regarding various aspects insurers want to be clear about. These include causality, standard of care, diagnosis, restrictions and limitations, return-to-work concerns, and level of impairment. Medical peer reviews provide answers for concerns such as appropriateness of treatment, whether the treatment was investigative / experimental, and medical necessity. Mental illness treatment is something that can be denied by health insurers for a variety of reasons.

Health Insurance

The MHPAEA (Mental Health Parity and Addiction Equity Act) of 2008 is a federal law that prevents group health plans and health insurance companies that provide mental health or substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical benefits. Unfortunately, patients in this category constantly face claim denials.

Let us consider some common concerns people have about coverage for mental health and substance abuse disorders.

  • Affordable Care Act and Mental Health Benefits: Since 2014, most small group and individual health care plans including those sold on the Healthcare Marketplace are required to cover mental health and substance use disorder services. Medicaid Alternative Benefit Plans are also required to do so. These insurance plans must have coverage of essential health benefits including 10 categories of benefits as defined under the health care law, and one of those categories is mental health and substance use disorder services. These plans must also comply with mental health and substance use parity requirements as laid out in MHPAEA. This signifies that coverage for mental health and substance abuse services typically cannot be more restrictive than coverage for medical and surgical services.
  • Medicaid and Mental Health/Substance Use Disorder Services: Medicaid programs in all states provide some mental health services and some offer substance use disorder services to Medicaid beneficiaries. Children’s Health Insurance Program or CHIP beneficiaries receive a full service range. Services provided include therapy, counseling, medication management, peer support, social work services, and substance use disorder treatment. For adults, the states determine which of these services should be covered. Medicaid and CHIP require that children enrolled in Medicaid are provided a wide range of medically necessary services including mental health services. Apart from this, coverage for the new Medicaid adult expansion populations is required to include essential health benefits including mental health and SUD benefits, and also meet mental health and substance abuse parity requirements under MHPAEA just as health plans.
  • Medicare and Mental Health/Substance Use Disorder Services: Medicare provides coverage for a range of mental health services.
    • Medicare Part A (Hospital Insurance) provides coverage for inpatient mental health services provided in a hospital. Part A covers nursing care and related services/supplies, your room and meals.
    • Medicare Part B (Medical Insurance) covers mental health services a patient would generally get outside of a hospital. This would include visits with a psychiatrist or other doctor, visits with a clinical psychologist or clinical social worker, and lab tests ordered by your doctor.
    • Medicare Part D (Prescription Drug) provides coverage for drugs the patient may need to treat a mental health condition. Each Part D plan has its own list of covered drugs (formulary).
  • Whether the employer plans will cover mental health/SUD services: For those enrolled in large employer plans, if mental health or substance use disorder services are offered, they are subject to the parity protections required under the MHPAEA. Moreover, from the year 2014, for most small employer and individual plans, mental health and substance use disorder services are required to meet MHPAEA requirements. Covered individuals must carefully study their plan’s enrolment materials and any other information to see what the coverage levels are for all benefits. The Affordable Care Act requires that insurers provide covered individuals with a clear summary about their benefits including mental health benefits.

What Are the Types of Care That Are Commonly Denied?

  • Residential treatment for mental illness
  • Psychological rehabilitation, intensive outpatient treatment, partial hospitalization and assertive community treatment (ACT)
  • Diagnostic assessments, standardized tests such as the Patient Health Questionnaire 9 (PHQ-9) that evaluates depression, and psychotherapy services that are office-based.

A major reason for claim denials for mental illness is the question of medical necessity. There are diverse definitions of whether a particular mental health condition is eligible for the same extent of coverage as a physical health condition. For instance, an insurance plan could impose strict limits on the number of annual visits for a behavioral health condition such as an eating disorder while having much fewer limits for treatment addressing physical health conditions such as heart disease. Though medical necessity reviews are conducted to evaluate the legitimacy of the claim, applicants face claim denials. As Dr. Taft Parsons III, the chief medical officer for Molina Healthcare of Michigan that provides healthcare benefits to state residents covered by government programs points out, claims are sometimes denied because the information that was documented and submitted did not meet all the criteria in the guidelines. He disagrees with the idea that claims are not conscientiously evaluated, asserting that when a covered person gets a determination that something was not medically necessary, a physician has looked at that and compared the information submitted from the patient’s clinician to the insurance company and reviewed it based on the guidelines for the care provided.

Avoiding Accidental Claim Denials

Providers, insurance lawyers and the companies providing them with medical review solutions would agree that doctors and other professionals providing mental health services should be more familiar with the medical necessity criteria by which insurance claims are evaluated. Accidental denials can be avoided if clinicians anticipate the language that could spur a denial and write patient reports to offer an honest evaluation. Documentation in the clinical notes must be flawless and provide the correct evaluation. Consistent treatment protocols and documentation of the mental health conditions can improve access to services for MH and SUD. Evidence-based medicine (EBM) practices can help strengthen the care for patients, from testing to diagnosis to treatment. Regarding the approach of insurers, Parsons says that they make sure their members get the best evidence-based care at the right time, in the right setting, for the right price.

Medical peer review services provided by a dedicated medical review company can help ensure that genuine MH and SUD claims are not denied. Patients and their families should carefully review the insurance policy to understand what is covered and what steps need to be taken for the treatment to be approved. They can get in touch with the insurance company to review what mental health services are covered and the policies that govern access to such treatments. They should also have a clear idea about their state’s parity laws as well as the insurance company’s appeals process.

 

     

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