Brian S. King PC
August 10, 2017
200 Independence Avenue SW, Room 424E
Washington, DC 20201
Re: Comments regarding the Mental Health Parity and Addiction Equity Act
Dear Ms. Fuller:
I provide this letter in response to the opportunity the Departments of Labor, Treasury, and Health and Human Services have provided the public to make comments about the Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA"). I appeared at the listening session in Washington D.C. on July 27, 2017, and provided oral testimony. But I wanted to reiterate and supplement those comments with this written information.
I am an attorney and my litigation practice is focused almost exclusively on representing individuals who have denied life, health, and disability claims. The majority of my work is for individuals who have had denied mental health benefits. I have practiced here in Salt Lake City for over 30 years and have concentrated my practice on this area of law for over 20 years. I also serve as the Representative for House District 28 in the Utah state legislature. While my comments in this letter relate primarily to my law practice representing claimants in mental health benefit cases, I am keenly aware of the important role effective mental health parity laws play to ensure that costs that should be borne by commercial insurers and self funded ERJSA plans are not shifted to taxpayers.
First, I want to thank the Departments for scheduling the listening session on July 27, 2017, and providing me, and many others, the opportunity to be heard. It is critical that the Departments be aware of the strengths and weaknesses of MHPAEA in order to improve efficiency of and compliance with that statute moving forward. I believe the information provided during the listening session was very helpful. I'm sure the written comments will likewise provide valuable insights into how regulatory action for MHPAEA will improve coverage for, and access to, mental health care in this country.
As to issues I run across regularly involving MHPAEA, the most common involve violations of nonquantitiative treatment limitations (NQTL). It is relatively easy to recognize and identifY quantitative treatment limitations that violate MHPAEA. Consequently, I think most ERJSA plans and insurers comply with that aspect of MHPAEA's requirements. However, NQTL violations are usually more difficult to identify than quantitative treatment limitation violations. One NQTL violation that is pervasive, in my experience, is the application of improper criteria to residential treatment of mental health illness and substance use disorders.
Improperly Applying Acute Inpatient Medical Necessity Criteria to Residential Treatment Claims
Since the MHPAEA regulations were first being developed, payers fought hard to not be required to cover residential treatment. But there is no question that residential treatment for mental health and substance use disorders is a well-recognized intermediate, or sub-acute, level of inpatient care that is medically necessary. It is often used for treatment of adolescents and young adults. It is relatively long term and relatively expensive compared to other levels of care for medically necessary treatment of mental health and substance abuse. As a result, in the hundreds of denied claims I have handled in litigation involving residential treatment over the last twenty years, I have seen ERJSA plans and innsurers get very creative, as well as brazen, in denying medically necessary residential treatment.
A very common way they do this is for medical reviewers of residential treatment to apply acute inpatient criteria to a residential treatment claim. The medical review asserts that because the patient was not homicidal, suicidal, or actively psychotic, medical necessity for residential treatment does not exist. A variant of this rationale from medical reviewers is that because the patient was not a serious threat to themselves or others, medical necessity does not exist. However, every set of medical criteria for acute inpatient mental health treatment read in conjunction with the medical criteria for residential treatment makes clear that if a patient is suicidal, homicidal, or actively psychotic, or if they are a serious threat to themselves or others, they are appropriately treated at an acute inpatient level of care, not a residential level. In fact, many residential treatment medical necessity criteria go so far as to say that the existence of symptoms demonstrating the patient is homicidal, suicidal, or actively psychotic excludes the patient from being appropriately treated at a residential treatment level of care.
This practice on the part of ERJSA plans and insurers, denying coverage for residential treatment based on acute inpatient criteria, is not infrequent or occasional. It is pervasive. I have seen literally hundreds of cases involving residential treatment with dozens of different insurers making this same assertion: your child is not sufficiently ill to justify treatment at the residential level of care because they are not a serious threat to themselves or others. I argue consistently that this is improper and an abuse of discretion. But so far, only one case has addressed that issue head on and ruled in my favor: Jeanes F. v. CJGNA Behavioral Health, 2011 U.S. Dist. LEXIS 64009 (D. Utah 2011).
One of the barriers to having this argument get traction is the existence of the abuse of discretion standard of review that makes ERJSA such hostile litigation territory for claimants. But in the past couple of years I have been more aggressively asser1ing that the a pplication of acute inpatient criteria to the medical necessity evaluation of residential treatment is an NQTL violation under MHPAEA. I have not specifically gotten a ruling yet on that issue but hope to in the coming months and years. I believe it is more likely going forward that we will get increasingly favorable rulings on this point because the standard of review for compliance with the MHPAEA is de novo rather than abuse of discretion.
Purporting to Cover Only "Acute" or "Short-Term" Residential Treatment
A second way in which I have seen ERISA plans and insurers try to circumvent MHPAEA in the last few months is to assert that they cover only "acute" residential treatment or "short-term" residential treatment. In doing this, ERISA plans and insurers seek to unilaterally, and for their own financial self-interest, redefine coverage parameters in a way that is inconsistent with generally accepted standards of medical practice for mental health and substance use disorders. Those generally accepted standards for treatment of mental health and substance use disorders do not recognize such a thing as "acute residential treatment" or "short-term residential treatment." Residential treatment is, by definition under generally accepted standards of medical practice for mental health and substance abuse, a sub-acute (or intem1ediate) inpatient level of care. The average length of stay in residential treatment is seven to ten months.1 Many individuals stay longer.2
ERISA plans and insurers almost always state that they will provide coverage, whether for medical/surgical or mental health and substance abuse, only for "medically necessary" healthcare. These plans and insurers usually go on to include a definition of "medical necessity" or "medically necessary" that includes a reference to "generally accepted standards of medical practice" or language to that effect. As such, it contradicts that language for plans to go on to claim that coverage for mental health and substance abuse is limited to "acute" residential treatment or "short-term" residential treatment. Generally accepted standards of medical practice do not limit medically necessary treatment for mental health or substance abuse to an "acute" or "short-term'' phase.
More critical for purposes of MHPAEA, very few ERISA plans or insurers exclude coverage for medically necessary intermediate or sub-acute levels of care for medical/surgical benefits. And without the plan being able to identify a medically necessary component of some intermediate or sub-acute inpatient level of care for medical/surgical benefits that they specifically exclude, the ERISA plan or insurer who limits coverage of residential treatment to an "acute" or "short-term" time frame violates the NQTL component of MHPAEA.
This practice by ERISA plans and insurers is an NQTL violation because it imposes a treatment limitation that is either applicable only with respect to mental health or substance use disorder benefits or because it is a treatment li mitation applicable to mental health or substance use disorder benefits that is more restrictive than the predominant treatment limitations applicable to substantially all medical/surgical benefits. 29 U.S.C. § I 185a(a)(3)(A)(ii). In addition, drafting or imposing such a treatment limitation on residential treatment violates the Final Rules because it is a medical management standard that limits or excludes benefits based on medical necessity or medical appropriateness (29 CFR § 2590.712(c)(4)(ii)(A)) and is also a restriction based on facility type or other criteria that limits the scope or duration of benefits for services provided w1der the plan or coverage (29 CFR § 2590.712(c)(4)(ii)(H)).
Failures to Respond to Requests for NQTL Information in the Pre-Litigation Claim and Appeal Process
My final comment about the MHPAEA is that I find ERISA plans and insurers almost uniformly fail to comply with requests for information in the pre-litigation claim and appeal process from claimants that are relevant to NQTL and allow the claimant to identify whether MHPAEA is being violated. For example, as the Departments know, in December, 2014, 60 Minutes ran a story about high rates of denial for residential treatment by Anthem, one of the largest health insurers in the country.3 The 60 Minutes story showed that Anthem's medical reviewers for residential treatment provided medical necessity denials in more than 90% of the residential treatment claims they reviewed. Since that time, several claimants I have represented have asked their ERISA plans and Anthem in the pre-litigation claim and appeal process for the denial rates for residential treatment of the doctor reviewing the claim for Anthem. Not once has Anthem provided any information or documents in response to these requests for information.
The refusal of Anthem or any other insurer or ERISA plan to respond to requests for relevant information such as this violates ERISA's claims procedure requirement that ERISA plans and insurers provide a "full and fair review" of denied residential treatment claims. Specifically. the refusal to answer this question constitutes a violation of an ERISA plan's obligation to provide, upon request, "all documents, records, and other information relevant to the claimant's claim for benefits." 29 CFR § 2560.503-1 (j)(3). Information and documents about denial rates requested by claimants is "relevant" under 29 CFR § 2560.503-1 (m)(8)(iii) because they relate to whether the ERISA plan is providing benefits in accordance with the plan terms and establishing administrative processes and safeguards to ensure that similarly situated plan participants and beneficiaries are treated consistently. Both reasons these requests are relevant are specifically identified in 29 CFR §2560.503-l(b)(5). The failure of ERISA plans and insurers to provide this information also deprives claimants of their right to engage in a meaningful dialogue with plan administrators in the pre-litigation claim and appeal process as is required under case law. Gaither v. Aetna Life Ins. Co.. 394 F.3d 792. 807 (I 0111 Cir. 2004); Booton v. Lockheed Medical Benefit Plan, 110 F.3d 1461, 1463 (9111 Cir. 1997).
Thank you for your careful consideration of the information I provided at the listening session and in this letter. I appreciate the effort by the Departments to provide greater understanding of, and compliance with, MHPAEA.
Brian S. King
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