Parity Implementation Coalition Requests Federal Intervention in Florida BCBS Case

Late last month, treatment advocates asked the federal
agencies that oversee the Mental Health Parity and
Addiction Equity Act (MHPAEA) to intervene in Florida,
where Blue Cross Blue Shield of Florida (BCBSFL) has
fired all its contracted addiction and mental health providers.
The state’s own insurance regulators said at the
time that it was not their job to enforce the MHPAEA
— but the federal government says that is not the case
and has opened an investigation, ADAW has learned.

Florida addiction providers contracted to BCBSFL found
out that not only will their contracts be terminated at
the end of November, but that the new managed care
carve-out — New Directions Behavioral Health, based
in Leawood, Kan. — will offer them new contracts
at greatly reduced fees. No other contractors in the
BCBSFL system appear to have been singled out for this

The Parity Implementation Coalition (PIC) contacted
the state’s Office of Insurance Regulation (OFR) to ask
that the MHPAEA be enforced, but the OFR responded
in an Aug. 17 letter to the Florida Psychological Association
that the office “has no jurisdiction with respect
to enforcement of federal law.” This led to an Aug. 25
letter from the PIC to the secretaries of the Department
of Health and Human Services (HHS), the Department
of Labor (DOL), and the Department of the Treasury,
the three agencies responsible for enforcing the MHPAEA
and the Interim Final Regulations (IFR), requesting
that they “intervene in the BCBSFL issue or provide
guidance on criteria for state and federal intervention
in MHPAEA non-compliance issues,” and “promulgate
additional regulatory guidance as soon as possible on
all three of these issues to thwart the harmful actions
such as this that significantly reduce consumer access
to mental health and addiction services, impact behavioral
health consumers and providers alike, and damage
the integrity of MHPAEA and the IFR.” The letter was
signed on behalf of the PIC by Irvin L. Muszynski of the
American Psychiatric Association and Carol McDaid,
principal with Capitol Decisions.

The DOL, HHS, and Treasury are going to investigate
the situation, but enforcement is the responsibility of
the state insurance department, according to the federal
agencies. In a joint e-mail to ADAW, press spokesmen
said that “state insurance departments are the primary
government enforcer/investigator” with respect to
health insurance companies. “The three departments
will use our normal processes to work with the state
and look into these issues,” said the e-mail. “We thank
the Parity Implementation Coalition for bringing this to
our attention.”

Molly Narendran, spokeswoman for New Directions, after
setting a time for an interview with the company’s
chief medical officer, canceled plans the night before,
sending an e-mail that said “we will not be commenting
at this time.” BCBSFL did not respond to our request
for an interview.

Pamela Greenberg, president and CEO of the Association
for Behavioral Health and Wellness (ABHW), a managed
behavioral healthcare membership group, did
not see the Florida situation as something that happens
only in mental health and addiction treatment.
Although not familiar with the details of the Florida situation
— New Directions is not a member of the ABHW
— Greenberg said she “would equate this to an HMO
terminating a contract with an entire group practice
— let’s say a cardiac group practice — and then contracting
with a new group practice.” Provider payment
changes “may or may not come with the new contracts,”
she said.

Non-quantitative treatment limits

In its letter to the government agencies, the PIC also
requested clarification on the parity law — specifically
the non-quantitative treatment limits (such as having
to stay in the network, or failing first in lower levels of
care) imposed on addiction and mental health treatment
by insurance companies.

“Managed behavioral health organizations are implementing
the MHPAEA, which includes parity for standards
for provider admission to participate in a network,
including reimbursement rates,” said Greenberg,
who said that while the ABHW has some problems with
the non-quantitative treatment limits aspects of the
IFR, managed behavioral health organizations are complying
with the law. “If there is an out-of-network medical
benefit under a plan, MHPAEA requires that there
be an out-of-network benefit for addiction and mental
health services as well,” she said.

In addition, McDaid and Muszynski requested disclosure
of medical and surgical criteria from BCBSFL.
Without information about how the medical-surgical
criteria are established, it’s impossible to test whether
the mental health-substance abuse criteria are on par
— particularly when it comes to non-quantitative treatment
limits. “The PIC fully anticipates that BCBSFL will
ignore our requests for disclosure as has been the case
with many of the other complaints submitted to the
Departments,” stated their letter to the federal agencies.

Limited or no oversight

The Aug. 25 letter also states there is “limited oversight
at the federal level and no oversight in some states”
of the MHPAEA. Since last December when the federal
government issued “sub-regulatory” guidance on
disclosing medical-surgical criteria, the PIC submitted
more than 150 examples of non-compliance with this
requirement, according to the letter.

Based on the regulatory guidance given so far, the letter
said, “BCBSFL could have a robust network of medical/
surgical providers, but drop or significantly reduce their
specialty behavioral network and still be in compliance
with the IFR.” This is not what Congress intended when
it passed the parity law in 2008, the letter said.

In a June 29 press release announcing the agreement
with BCBSFL, New Directions chief medical officer Jonathan
Gavras, M.D., said, “The Mental Health Parity and
Addiction Equity Act of 2008 puts pressure on employers
to provide quality behavioral health care while continuing
to contain costs.” Gavras added that “New Directions
has the experience and processes that can aid
BCBSF customers in these efforts.”

And John Quick, President and CEO of New Directions,
said in the same press release: “This collaboration expands
our commitment to integrating behavioral
health and medical care. We look forward to working
together with Blue Cross and Blue Shield of Florida to
improve behavioral health care for their members while
reducing unnecessary costs.”

Skepticism from provider

Treatment providers are skeptical about regulators’
ability to stop insurance company practices. The major
insurance companies sued to stop implementation
of the parity law, noted John Schwarzlose, CEO of the
Betty Ford Center in Rancho Mirage, Calif. Although the
court dismissed the case, there have been “no changes
to adequate reimbursement and access to treatment
for thousands of people in need,” he said in an e-mail
to ADAW last week, adding, “in many locations the rules
and restrictions have gotten worse.”

“The only chance that things will really change to allow
access to care will be through the courts,” said Schwarzlose.
Referring to a recent development in which a
family won a case in which their daughter with a severe
eating disorder was denied care, Schwarzlose said the
“insurer’s response is to hint that they will take this to
the Supreme Court.”
“We should be pleased and proud that parity passed
after many, many years of effort,” said Schwarzlose. “But
who knows if in the end it will make a difference to people
in need.”


Alcoholism & Drug Abuse Weekly

Parity Implementation Coalition Requests Federal Intervention
in Florida BCBS Case was first published in
Alcoholism & Drug Abuse Weekly Volume 23, No. 34,
September 5, 2011.
Offering significant news and analysis of federal and state
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Alison Knopf, Editor