<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:81493.wais]
INSURANCE COVERAGE OF MENTAL HEALTH BENEFITS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JULY 23, 2002
__________
Serial No. 107-118
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
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------------------------------
COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Health
MICHAEL BILIRAKIS, Florida, Chairman
JOE BARTON, Texas SHERROD BROWN, Ohio
FRED UPTON, Michigan HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania TED STRICKLAND, Ohio
NATHAN DEAL, Georgia THOMAS M. BARRETT, Wisconsin
RICHARD BURR, North Carolina LOIS CAPPS, California
ED WHITFIELD, Kentucky RALPH M. HALL, Texas
GREG GANSKE, Iowa EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia FRANK PALLONE, Jr., New Jersey
Vice Chairman PETER DEUTSCH, Florida
BARBARA CUBIN, Wyoming ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES ``CHIP'' PICKERING, ALBERT R. WYNN, Maryland
Mississippi GENE GREEN, Texas
ED BRYANT, Tennessee JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland (Ex Officio)
STEVE BUYER, Indiana
JOSEPH R. PITTS, Pennsylvania
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Cutler, Charles M., Chief Medical Officer, American
Association of Health Plans................................ 15
Hackett, James T., Chairman, President, and Chief Executive
Officer, Ocean Energy, Inc................................. 36
Nystul, Kay, Psychiatric Registered Nurse, Certified Case
Manager, Clinical Management Coordinator, Wausau Benefits,
Inc........................................................ 39
Regier, Darrel A., Director, Office of Research, American
Psychiatric Association.................................... 20
Trautwein, E. Neil, Director of Employment Policy, National
Association of Manufacturers............................... 28
Material submitted for the record by:
Cutler, Charles M., Chief Medical Officer, American
Association of Health Plans, response for the record....... 83
Nystul, Kay, Psychiatric Registered Nurse, Certified Case
Manager, Clinical Management Coordinator, Wausau Benefits,
Inc., response for the record.............................. 67
Regier, Darrel A., Director, Office of Research, American
Psychiatric Association, letter dated September 24, 2002,
enclosing response for the record.......................... 93
Trautwein, E. Neil, Director of Employment Policy, National
Association of Manufacturers, response for the record...... 76
(iii)
INSURANCE COVERAGE OF MENTAL HEALTH BENEFITS
----------
TUESDAY, JULY 23, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Health,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2123, Rayburn House Office Building, Hon. Michael
Bilirakis (chairman) presiding.
Members present: Representatives Bilirakis, Greenwood,
Ganske, Norwood, Wilson, Shadegg, Bryant, Ehrlich, Brown,
Waxman, Strickland, Barrett, Capps, Eshoo, Wynn, and Green.
Also present: Representative Roukema.
Staff present: Nandan Kenkeremath, majority counsel; Yong
Choe, legislative clerk; and Karen Folk, minority professional
staff.
Mr. Bilirakis. I now call this hearing to order. I would
like to thank our witnesses for appearing before the
subcommittee today. Our subcommittee values your expertise, and
we are grateful--very grateful--for your cooperation and
attendance.
The focus of today's hearing is insurance coverage of
mental health benefits. As we all know, Congress has been
grappling for some time with what the Federal Government's role
should be in mandating insurance benefits. While I think that
there is a fairly broad consensus regarding the need to provide
Federal protection for beneficiaries from insurance company
abuses, many people have concerns about the impacts such
mandates would have on costs.
I personally have grave reservations about contributing to
already spiraling health care costs, and have no desire to add
to the already unacceptable number of uninsured Americans.
This notion was reinforced for me during the Congressional
recess of late March and early April. During that 2-week
period, I visited with many people in my district and was
surprised to find that a primary issue that the business
community was concerned with was not a typical bread and butter
business issue; it was the cost of providing health insurance.
Those meetings left quite an impact on me and has certainly
focused my attention on the effects that decisions we make here
in Washington might have on my constituents. These concerns
need to be balanced, of course, with the needs of patients,
including those with mental illness. Congress recognized this
by removing the ability of health plans to impose annual and
lifetime limits for mental health benefits that are different
and similar limits for medical and surgical benefits.
These provisions, which were enacted into law in 1996, were
reauthorized as part of last year's labor health and human
services and education appropriations bill. I am aware that
there are concerns in the mental health community about the
effectiveness of these provisions, and I am aware that many
members, including several on this subcommittee, are co-
sponsors of legislation that would broadly expand upon this
mandate.
I hope that some of our witnesses today will address the
notion that every condition outlined in the Diagnostic
Statistical Manual of Mental Disorders IV, DSM-IV, warrants
full parity. I believe that some mental conditions, just like
some physical conditions, do not warrant equal treatment by a
health plan.
However, I do want to be clear on this issue. I think
serious mental illnesses are problems that deserve serious
attention. But I also believe that we have to be careful with
our limited health care resources.
While I am fully aware of the perils associated with
attempts to define what constitutes a serious mental illness, I
support the idea that full parity may be appropriate for some
illnesses. Again, defining what is serious would likely prove
very difficult. However, I believe that notion gets at what
might be a middle ground on these issues.
I am sure I am not alone in my desire to better understand
this subject matter, which is why I decided to hold this
hearing. Our panel of witnesses should help members of the
subcommittee get a better grasp of the issues we are facing and
the potential impact of various policy decisions.
I would like to remind members of the subcommittee that
committee rules limit member opening statements to 3 minutes. I
hope that all members respect this limit, with the exception,
of course, of the chairman and ranking member. And I plan to
hold to that 3-minute period, and I now yield to the ranking
member, Mr. Brown, for his opening statement.
Mr. Brown. I thank the chairman. I ask unanimous consent,
Mr. Chairman, to start with that all members have their
statements or comments in the record.
Mr. Bilirakis. Of course. Without objection, that is the
case.
Mr. Brown. I thank the witnesses for their testimony this
morning. I want to thank my colleague, Patrick Kennedy from
Rhode Island, for his sponsorship of the leading mental health
parity legislation in this Congress, the Mental Health
Equitable Treatment Act, and the topic of today's hearing. I am
pleased to be 1 of the 240 co-sponsors--a distinct majority in
this body.
My colleague on the subcommittee, Mr. Strickland, who will
join us shortly, is also a leader in mental health issues and a
champion of mental health parity under Medicare and for all
Americans. Today's hearing focuses on the merit of H.R. 4066,
the product of bipartisan negotiations on mental health parity.
It is a thoughtful compromise bill. It recognizes the concerns
of the mental health community as well as those of employers.
The bill prohibits group health plans from imposing
treatment limitations or financial requirements on the coverage
of mental health benefits, unless there are comparable
limitations on medical and surgical benefits. I think the bill
is a compromise responsive to concerns raised by employers.
Like so many chronic and acute diseases covered under
mental--under health insurance today--mental illnesses are
serious, they can be debilitating, and in most cases they are
highly treatable. The fact that health insurance typically has
one set of coverage rules for an illness like heart disease,
and another set of coverage rules for an illness like clinical
depression, is unjustifiable and simply unfair.
Two hundred twenty-six organizations, 66 Senators, a
majority of my colleagues in the House, support this
compromise, although the opposition to it is vocal and
aggressive. The opposition restigmatizes mental illness by
mischaracterizing the bill. Mental health may not receive the
same insurance treatment as other health care needs, but it
should be afforded the same respect as it is debated on Capitol
Hill.
I want to, Mr. Chairman, mention a couple of the myths
floating in opposition to the bill. Opponents argue that
insurers would be required to cover all mental health
disorders, including, for example, jet lag disorder. What
opponents would like you to believe is that under parity
insurers would be required to pay for services rendered by a
patient who, after catching the red-eye, couldn't sleep for a
night or two.
The truth is that the bill only requires treatment of a
medical disorder, if the plan finds that treatment to be
medically necessary. An insurer could deny payment in the case
of jet lag on the basis that the treatment wasn't medically
necessary.
Opponents have also expressed concern that mental health
parity would increase the cost of health insurance, forcing
employers to drop coverage for health insurance services or
drop coverage all--for mental health services or drop coverage
altogether.
They say passing the bill would cause mental health costs
to skyrocket--the argument that they always use, particularly
if this reform coincides with passage of a patient's bill of
rights, since they say health plans would have less ability,
then, to manage their benefits. There is a difference between
managing benefits and short-changing patients.
The cost effect of both of these pieces of legislation has
typically been overstated by their opponents. CBO estimates--
non-partisan CBO estimates the direct cost of services under
the proposed bill would increase group health plan premiums by
less than 1 percent. It costs the typical plan an additional
$1.30 per covered person per month.
The patient's bill of rights and mental health parity would
pass simultaneously. Health plan premiums would increase
according, again, to CBO--not to the Democrats but to CBO--
would increase by just 1.1 percent. When parity was implemented
in Ohio, treatment costs actually declined because in-patient
days dropped by 75 percent. Outpatient visits fell by 40
percent.
As we debate the issue of cost, keep this in mind. This
Nation will bear the costs of mental illness, whether mental
health parity legislation passes or whether it doesn't pass,
whether it is through out-of-pocket costs, emergency room
visits, lost job productivity, patients and businesses in the
health care system and the economy are paying for mental
illness.
Delayed treatment simply increases the costs across the
board to all of us. According to a study 3 years ago by then
Surgeon General Satcher, approximately 1 in 5 adults
experiences some mental disorder over the course of a year.
Our current health care financing system arbitrarily
dismisses or even discriminates against those individuals. That
is short-sighted, and it is morally wrong. Health care coverage
for mental health is the right thing to do for our people. It
is the smart thing and the productive thing to do for our
economy.
I yield back.
Mr. Bilirakis. The Chair thanks the gentleman. Now, for 3
minutes, Dr. Norwood.
Mr. Norwood. Thank you, Mr. Chairman, and thank you for
holding this hearing. This is a very important topic, I
believe, for our committee to be considering today, and we are
grateful.
The issue of mental health parity is a lot, and very
simply, about equality. Are we going to continue to treat
people with mental illness as second-class citizens? Are we
going to continue to stigmatize people with mental health
issues?
Mrs. Roukema's bill, H.R. 4066, is based on the parity
provisions in the Federal Employee Benefit Plan, which the
Members of Congress and other Federal employees and their
families presently have. It will give mental health patients
the same treatment, cost-sharing, lifetime and annual limits,
as those applicable to medical/surgical services, ending
discrimination against those with mental illness.
This compromised mental health parity bill includes
concessions that provide the flexibility and cost containment
that employees desire. Health plans will still be able to use
managed care techniques and will be able to determine when
coverage is medically necessary.
The substance abuse coverage that was included in our
previous parity bill, H.R. 162, was removed. I think it is a
reasonable approach to mental health parity, and I am proud to
be a co-sponsor of the bill.
Now, we are going to hear testimony that tries to suggest
the most infrequent of diagnoses are commonplace. We are going
to hear testimony about costs that suggest passing mental
health parity will destroy health care coverage as we know it--
similar claims that I have listened to over and over again in
the past 5 years about a patient's bill of rights debate.
I thought they were absurd, then, Mr. Chairman, and I think
they are absurd now. And I look forward to discussing exactly
how absurd I think these statements are with our panelists.
Mr. Chairman, I urge the committee to move forward with
this legislation. I am not the only one supporting mental
health parity legislation. So is the majority of this
committee. So is the President. Back in April, the President
said he wants to sign a bill that ``prevents plans from
applying less generous treatment or financial limitations on
mental health benefits that are imposed on medical or surgical
benefits.''
We have that bill before us, and I hope we will act before
this session ends. I look forward, Mr. Chairman, to the
witnesses' testimony, and will be glad to yield back the
balance of my time.
Mr. Bilirakis. The Chair thanks the gentleman. Mr. Green
for an opening statement.
Mr. Green. Thank you, Mr. Chairman, for holding this
important hearing on insurance coverage for mental health
benefits, and this is an important issue that literally touches
every family. I am pleased to welcome, as one of our witnesses
today, Mr. James T. Hackett, Chairman and President and CEO of
the Ocean Energy, Incorporated, headquartered in my hometown of
Houston.
I followed Ocean Energy in their efforts to provide energy
for our Nation for many years, but I particularly appreciate
the progressive nature he has been and his company has been on
mental health parity. Mr. Hackett is a model of a business man
when it comes to providing equitable mental health benefits for
his employees.
He has worked with--not only with his organization to
ensure that every one of the employees at Ocean Energy has
access to quality mental health care. Additionally, he has
reached out to other Houston businesses--Winegarden Realty
Investors, which is a great group in Houston, also The Houston
Chronicle--and urged them to provide mental health parity for
their employees.
If all employers and insurers acted as these organizations
have, there wouldn't be any need for this legislation we are
discussing today that I am proud to be a co-sponsor of.
Unfortunately, far too many people who suffer from some form of
mental illness cannot access treatment because of the archaic
stigma associated with the disease.
The Surgeon General estimates that approximately 20 percent
of the U.S. population, about 60 million Americans, has a
diagnosable mental disorder in any given year. Even the most
conservative of estimates indicates that the untreated mental
illnesses cost American businesses $70 billion a year in lost
productivity and worker absenteeism.
In the United States, mental health disorders collectively
account for more than 15 percent of the overall burden of
disease from all other causes. It is slightly more than the
burden associated with all forms of cancer.
Mr. Chairman, I would like to have my full statement read
into--placed into the record, but like a lot of people, when I
was--before I was elected to Congress, we had other
professions. I was a practicing lawyer in Houston and actually
had a probate judge who handled our mental health cases decide
1 day when he came to the legislature nobody understood mental
health cases.
And so he appointed me as the lawyer to represent people
who were to be--have their freedom taken away for as much as 90
days. And it is--talk about on-the-job training and effort, I
realize what mental illness is in our community and all across
this country and how it is treatable, and there are ways that
we can do it.
The sad part is when you see people go through our
psychiatric centers all over our country, they typically have
no type of coverage for insurance, so it becomes on the public
system to deal with it. And our public system has been
overtaxed for many years. In fact, I think it was just last
weekend in Houston our Harris County psychiatric center was no
longer taking patients, and it is a state/local cooperation.
So, you know, we have a problem in our public facility for
psychiatric patients. What we need to do is make sure the
private sector, like Mr. Hackett and his company and companies
are willing to pay for it, have that coverage for their
employees.
Thank you, Mr. Chairman, for allowing me over my 3 minutes.
[The prepared statement of Hon. Gene Green follows:]
Prepared Statement of Hon. Gene Green, a Representative in Congress
from the State of Texas
Thank you Mr. Chairman for holding this hearing on insurance
coverage for mental health benefits. This is an important issue that
touches many of us, and many of our constituents.
I am pleased to welcome Mr. James T. Hackett , Chairman , President
and Chief Executive Officer of Ocean Energy, Inc., headquartered in my
hometown of Houston, Texas.
Mr. Hackett is a model businessman when it comes to providing
equitable mental health benefits for his employees.
He has worked with his organization to ensure that every one of the
employees at Ocean Energy has access to quality mental health care.
Additionally, he has reached out to other Houston businesses,
including Weingarten Realty Investors and the Houston Chronicle, to
urge them to provide mental health parity for their employers.
If all employers and insurers acted as these organizations have,
there wouldn't be the need for the kind of legislation we are
discussing today.
Unfortunately, far too many people who suffer from some form of
mental illness cannot access treatment because of the archaic stigma
associated with this disease.
The Surgeon General estimates that approximately 20 percent of the
U.S. population--almost 60 million Americans--has a diagnosable mental
disorder in any given year.
Even the most conservative of estimates indicate that untreated
mental illness costs American businesses $70 billion each year in lost
productivity and worker absenteeism.
In the United States, mental disorders collectively account for
more than 15 percent of the overall burden of disease from all causes,
and slightly more than the burden associated with all forms of cancer.
But where most insured individuals can access appropriate cancer
care, far too many must jump through bureaucratic hoops and meet
arbitrary standards before they can access their necessary mental
health care.
The General Accounting Office (GAO) estimates that 87 percent of
health plans routinely force patients to pay more for mental health
care than other health care, or put stricter limits on mental health
treatment than on other health treatment.
This barrier to care is counterproductive. Study after study have
shown that mental health treatment works.
The National Institutes of Mental Health has shown that treatment
for schizophrenia is successful 60 percent of the time, depression can
be treated successfully 70 to 80 percent of the time, and panic
disorder can be treated 70 to 90 percent of the time.
Conversely, heart disease treatment is successful only 45 to 50
percent of the time.
And despite the complaints from the insurance industry, the
Congressional Budget Office has scored this bill as an extremely low
cost bill. CBO estimates that it will only increase premiums by .9
percent.
And as we all know, CBO is reluctant to incorporate cost-savings--
such as increased productivity and lower absenteeism--which could
offset the costs of mental health parity even further.
Mr. Chairman, I know that many of my colleagues are concerned about
the sky-rocketing costs of health care these days.
But I believe that common-sense changes such as mental health
parity will only improve our health care system and will likely drive
down the costs of mental illness.
That is why I am a strong supporter of H.R. 4066, legislation which
would require insurers and employers to provide mental health parity.
This legislation has already been modified significantly from its
original form and bill sponsors have worked hard to address some of the
concerns of the opponents of parity.
But I see no similar concessions on the part of the insurance
industry. They continue to fight for the status quo--a discriminatory
system that had its infancy in the dark ages.
We have come so far in our understanding and treatment of mental
illness. It is time for our insurance system to catch up with the times
and start treating mental illness with the same attitude and policies
that it treats all illnesses.
With that, Mr. Chairman, I yield back the balance of my time.
Mr. Bilirakis. The Chair thanks the gentleman. Dr. Ganske
for an opening statement.
Mr. Ganske. Thank you, Mr. Chairman. On Sunday, I rode the
first leg of the ride across The Register's annual great bike
ride across Iowa. It is called Ride Bright. And I pedaled past
one of the four mental institutions that Iowa had set up a
long, long time ago. Years ago, we began to discharge patients
from those mental institutes and treat them with outpatient
therapy.
The treatment, though, is dependent on their having
benefits. And I don't know that there would be too many people
here in this hearing room today that would advocate not
treating manic depressive illness or schizophrenia like you
would any other disease. It ought to be part of a benefit
package.
There probably is some question about how far down that
diagnostic list you go in terms of benefits. Do we mandate
benefits for everyone who has a neurosis of any type? So there
are some questions that we need to get into, but as a physician
I would have to say that, you know, manic depressive illness,
schizophrenia, and serious mental diseases should be covered as
benefits.
Now, let me talk a little bit about the patient bill of
rights. We have a bill that should be in conference. I call
upon both the Speaker and the majority leader to call the
conference for the patient bill of rights.
There is one case in particular that comes to mind as it
relates to mental illness that is interesting and also tragic.
There was a man down in Texas; his name was Mr. Plosika. He was
in the hospital for depression, suicidal. His physician
recommended that he stay in the hospital for treatment. His HMO
said, ``No, he has been here long enough. And you know what? We
can determine medical necessity. So we have determined that he
doesn't need to be in the hospital anymore.''
Now, in Texas, there is a patient bill of rights that was
passed. And it requires that in cases where there are disputes
that that go to an expedited review. This is the case Plosika
v. Nylcare, for those attorneys for the health plan who are
here.
That HMO said, ``No, he is out of here.'' They told the
family, ``You know, you can keep him here if you want to, but
we are not going to pay for it.'' Well, this family doesn't
have any resources, so they take Mr. Plosika home. That night
he drank half a gallon of antifreeze and committed suicide.
That HMO just totally disregarded the law. The law in Texas
required that they--in that case, that they should have gone to
an expedited review, and they just ignored it. That is why we
need to come to a resolution on the enforcement powers for a
patient bill of rights, so that that type of case doesn't
happen again.
I am not only concerned about the fact that some plans
don't cover diseases like schizophrenia or manic depressive
illness, but I am also concerned about the fact that there are
millions and millions of Americans who are paying a lot in
terms of their health care premiums, expecting to get mental
illnesses covered. And then, because of a 25-year old Federal
law, their health plan can just willy nilly deny them the type
of medical care that they are paying for.
Mr. Bilirakis. The gentleman's time has expired.
Mr. Ganske. Mr. Chairman, that is why we need to come to--
we need to get this conference going on a patient bill of
rights, because we are closer to getting that done than we are
right now for getting this bill done, although this is--I
commend my colleague, Mrs. Roukema, for her work on this.
And I yield back.
Mr. Bilirakis. Well, I would hope that we can continue to
work on this bill and come to some sort of a conclusion.
Ms. Capps for an opening statement. If we limit our opening
statements to 3 minutes, we might be able to finish up in time
to run over and cast the vote.
Ms. Capps. Thank you, Mr. Chairman, for that hint. And
thank you for holding this hearing on such a truly important
issue.
I am a long-time co-sponsor of legislation that would
establish mental health parity, H.R. 4066. I want to commend
our colleague, Marge Roukema here, and Patrick Kennedy, for
their leadership on this issue. We have leaders in this
Congress, and two Senators stand out in my mind--Senators
Wellstone and Domenici--for their leadership.
And I just want to acknowledge the wife of Senator
Domenici, Nancy Domenici, who has been a pioneer, stellar,
working on this issue. When I was a Congressional spouse, she
mentored me in this important topic.
This Congress has spent considerable time addressing the
concerns of how insurance plans treat beneficiaries. For
example, we have considered--and it has been brought up
already--a strong patient's bill of rights that would institute
protections for patients from the abuses of HMOs.
Unfortunately, the majority rejected that plan and supported a
weaker version.
It is, therefore, appropriate that we consider today the
issue of mental health parity, I hope with a better result.
Right now, there are millions of Americans coping with mental
disorders that are treatable by the miracles of modern science.
By some estimates, 1 in 5 Americans face mental health
disorders. These people often cannot get the treatments they
need. Why? Because some accountant in the back room of an
insurance company is afraid that it would cut profits too
much--Arthur Andersen's revenge.
So we deny these tax-paying citizens the care they need and
deserve, even when many of them are paying high insurance
premiums. Several studies indicate that mental health parity
will not significantly raise costs. CBO estimates that true
mental health parity will raise costs by less than 1 percent.
In 1996, Congress did pass the Mental Health Parity Act to
address this problem, but the simple truth is that our
insurance plans simply don't want to pay for mental health
services, and they quickly have found ways around the law to
avoid doing so. Whether they mean to or not, they are
discriminating against people who are struggling to cope with a
disease. We need to enact true mental health parity to finish
the job started 6 years ago.
As a nurse and a Member of Congress, I have worked hard to
eliminate the stigma associated with mental health disorders.
The discrimination of these insurance plans is adding to the
stigma that American people feel. I have supported resources
for an anti-stigma campaign and have pushed the administration
to make this campaign as broad-based as possible.
Our society is already too quick to dismiss the concerns of
people with mental health disorders. We must stop treating them
as second-class citizens. And the simple fact is that treating
them as such and withholding mental health service costs our
society tens of billions of dollars in lost productivity. But
when the insurance companies try to deny these benefits, or,
even worse, insist that beneficiaries be in special plans, they
set this effort back significantly.
I am pleased we are holding this hearing today. Hope it
will lead to real action on this critical issue. We have to
pass mental health parity now.
Thank you, and I yield back.
Mr. Bilirakis. Mr. Strickland for a 3-minute opening
statement.
Mr. Strickland. Thank you, Mr. Chairman. As a psychologist,
I have seen firsthand the devastating consequences of an
untreated mental illness. It wreaks havoc on productivity, our
medical costs, our criminal justice system, not to mention the
personal devastation felt by individuals and families whose
lives are so affected.
Mental health benefits are an integral and a necessary part
of adequate general health care. According to the Surgeon
General's 1999 report on mental health, about 20 percent of the
U.S. population is affected by mental disorders during a given
year.
These disorders are very treatable. In fact, successful
treatment rates for many mental illnesses are higher than for
those of other medical conditions. Furthermore, mental health
parity is affordable. The Congressional Budget Office estimates
that H.R. 4066 will increase the costs of insurance premiums by
just .9 percent.
Discrimination against the mentally ill is wrong. I believe
it is immoral. And given that these illnesses are both
diagnosable and treatable, it is shameful that we do not
require coverage that is simply on par with surgical and
medical benefits.
I would like to enter my complete statement into the
record, Mr. Chairman, but let me say that I worked for a number
of years in a mental health center, a psychiatric hospital, a
prison. And what we are not doing to assist those with these
illnesses is a shame. And I applaud the President; I applaud my
colleagues who support what we are trying to do.
But let me say we ought not to be forced to choose which
pain we are willing to tolerate without treatment. And so that
is why I believe we need to look very carefully at any effort
to impose arbitrary limits on the kinds of illnesses that will
be treated under the parity plan that I hope that we are
eventually able to pass.
I thank you, Mr. Chairman, for this hearing, and I look
forward to hearing the witnesses.
Mr. Bilirakis. I thank the gentleman. Mr. Waxman for an
opening statement.
Mr. Waxman. Thank you, Mr. Chairman. I can't add anything
more to the articulate statement made by our colleague, Mr.
Strickland. I think he laid out the case in a superb way. I
have long advocated the action to establish parity for mental
health care. I am pleased to join with the majority of the
members of this subcommittee and an overwhelming majority of
the House as a sponsor of H.R. 4060 introduced by Congresswoman
Roukema and Congressman Patrick Kennedy.
I have a longer statement I would like to put in the
record, but I am here to show my solidarity and support for
this legislation.
[The prepared statement of Hon. Henry A. Waxman follows:]
Prepared Statement of Hon. Henry A. Waxman, a Representative in
Congress from the State of California
Mr. Chairman, I am pleased that the Subcommittee is holding this
hearing today. It is, in my view, long overdue. And I can only hope
that it is the first step to this Subcommittee, and this Committee,
reporting favorably legislation to provide parity in mental health
benefits.
I have long advocated action to establish parity for mental health
care. I am pleased join with a majority of the members of this
Subcommittee, and an overwhelming majority of the House, as a sponsor
of H.R. 4060, introduced by Congresswoman Roukema and Congressman
Patrick Kennedy.
Providing parity in coverage in mental health benefits is not, and
should not be, a partisan issue. Legislation to accomplish this
objective has strong bipartisan support in both Houses of the Congress.
There are 67 sponsors in the Senate; there are 240 sponsors in the
House. Some 223 national organizations support its passage.
The question before us should not be should we pass this bill; it
should be why haven't we done this sooner. I hope we can put both
questions to rest by marking 2002 as the year this legislation is
signed into law.
Surely in an enlightened society such as ours, the days when people
shut away persons with mental illness, or refused to recognize that it
is a medical condition that can be treated with success, are long past.
Yet our willingness to provide for insurance coverage for the costs of
treatment have lagged behind our willingness to put dollars into
coverage of other forms of medical care. That must change.
Mental illness is real, it is devastating, it affects the well-
being and productivity of countless Americans. It is time to end the
discrimination against treatment that pervades too many of our
insurance products.
We know treatment can be effective. We know that mental illness can
be diagnosed by a clinician, that medical necessity can be established
and appropriate treatment regimens established. And we know this is a
benefit that can be managed so that costs can be appropriately
controlled.
When we consider the benefits of mental health treatments in
keeping working Americans working and productive, of keeping families
viable, of dealing with problems that can otherwise have devastating
effects for society--to me, the question is not whether we can afford
this benefit, but rather how can we not afford it.
I look forward to action in this Committee this year to deliver the
promise of parity in mental health coverage. Thank you.
Mr. Bilirakis. Without objection, of course, all of the
members' statements will be made a part of the record. That has
already been done.
And I would like to say that Mrs. Roukema was here from the
beginning, and I trust will return. And if she does return,
before we get started again, I will give her an opportunity to
make a quick opening statement.
But in any case, we do have a vote, and so, unfortunately,
we will have to recess. We will be back right after we cast
that vote.
Thank you.
[Brief recess.]
Mr. Bilirakis. The Chair recognizes the gentlelady from New
Mexico, Mrs. Wilson, who is here with her beautiful red-headed
daughter, for an opening statement.
Mrs. Wilson. Thank you, Mr. Chairman. I wanted to thank you
for holding this hearing, and thank you for bringing attention
to this issue.
Before being elected to Congress, I was the cabinet
secretary for Children, Youth, and Families in the State of New
Mexico. And we had custody of the abused and neglected children
as well as the delinquent children, and operated the children's
mental health system in New Mexico.
And we have come a long way in the last 20 years in the
treatment of mental illness I think in two ways. The first is
the development of medicines and treatment that can provide
real relief and allow both children and adults to go on with
their lives through medical treatment. And the second is the
reduction of the stigma associated with mental illness.
Mental illness is just as serious as diabetes and deserves
the same kind of treatment and management in the relief that
insulin provides. And we need to take mental illness seriously,
because unlike what some--you know, there is always that
tendency to say, you know, ``Well, you just need to pull
yourself out of it.'' Well, you can't pull yourself out of it
any more than you can pull yourself out of a heart attack. We
need to treat mental illness and diseases of the brain just
like we treat diseases of other vital organs.
I was with President Bush when he announced his support for
a health insurance system that treats serious mental illness
just like any other diseases. I know that his commitment is a
sign to--his commitment to sign a mental health parity bill
into law was very sincere, and I look forward to working with
the chairman and my colleagues to produce a bill that the
President will sign, and that will give hope to families and
patients who need access to care.
And I ask that my entire statement be submitted to the
record.
And, Mr. Chairman, thank you again.
Mr. Bilirakis. The Chair thanks the gentlelady.
[Additional statements submitted for the record follow:]
Prepared Statement of Hon. Chip Pickering, a Representative in Congress
from the State of Mississippi
Mr. Chairman, thank you for holding this hearing this morning.
Mental illness is a serious issue and I look forward to the testimony
from our witnesses this morning. According to the Surgeon General 1 out
of 5 people suffer from mental conditions in any given year. While the
range and type of mental illness various greatly, in recent years we
have made progress in the diagnosis and treatment of mental illnesses.
I am sure that we all have somehow been touched by mental illness.
Whether it is a family member or a friend, we recognize the importance
of receiving the quality service that is needed to treat someone who
suffers from a mental illness.
In 1996, Congress passed the ``Mental Health Parity Act'' which
required group health plans to remove the cap that was in place on
lifetime or annual dollar caps for mental health benefits and created
exemption for certain small businesses. Also several states, including
my own, have passed mental health legislation that requires coverage
for beneficiaries suffering from certain mental illnesses.
We must continue work together as we address this important matter.
The mental health of individuals is important and I am committed to
reaching a solution to provide the best possible coverage for those
suffering from mental illnesses.
______
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Thank you Mr. Chairman, I commend you for holding this important
hearing. Mental illness is a serious problem affecting tens of millions
of Americans. According to the Surgeon General, approximately one in
five Americans suffer adverse mental conditions during any given year.
The impact from such illnesses on families can be devastating.
All of us in Congress want to ensure that patients have health
insurance for serious and catastrophic mental illness. Certain types of
mental illnesses are too important to ignore and deserve to be covered
in the same way as many physical diseases or conditions. At the same
time, however, we must always remember that our employer-based system
is voluntary. Simply increasing mandates may prompt employers to stop
offering benefits or coverage.
In an analysis of recent mental health parity legislation, CBO
indicated that affected plans would experience an increase of between
30 and 70 percent of their mental health costs. Those are serious
numbers for affected plans that could result in reduced access to care.
According to CBO, those numbers may go up further if the provisions of
the Patients Bill or Rights are enacted.
Last year, employers experienced an estimated 10-12% premium
increase. Some estimates for premium increases this year are as high as
16%. As we look at legislation related to coverage of mental health
services, we must be very sensitive to the issue of increased costs.
During this time of economic uncertainty, we should be doing everything
possible to insulate employers and employees from spiraling cost hikes,
not the other way around.
Within this debate over mental health coverage, I am specifically
concerned about requiring the expansion of health insurance to cover
all conditions in the American Psychiatric Associations DSM IV manual.
Some of these conditions include: unhappiness in the job, a chaotic
home life, difficult personal relationships, spirituality disorder,
conduct disorders, and jet lag. Some of these may be important issues.
Some of them may warrant emotional, pastoral, family or other
counseling, but the question arises: should we mandate their coverage
under group health plans? We do not have such federal mandates for non-
mental health benefits. Additionally, most states do not come close to
mandating anything as sweeping as complete coverage under DSM IV with
its far-reaching categories.
Many states that regulate mental health benefits use definitions
that involve a substantially smaller number of disorders than listed in
DSM IV. Most states use the subcategories of disorders that are
biologically-based for purposes of interpreting their mental health
parity laws. For the record, let me say that I believe that it will be
difficult to implement a sweeping parity concept. Today, health plans
simply do not treat all categories of non-mental health benefits
equally. For example, outpatient physical therapy, emergency care,
specialty care, speech therapy, occupational therapy, chiropractic
care, and preventive care often have different limitations than other
categories of medical items or services. Differences in categories are
often necessary and appropriate. There may well be specific categories,
both among mental and other types of services, that need to be treated
differently for certain purposes. That shouldn't be precluded in law.
I also do not believe it is proper to say that a state has a
discriminatory law when such law treats spelling disorder, mathematics
disorder, caffeine intoxication, conduct disorder, sibling rivalry
disorder, or relational problems as qualitatively different from
schizophrenia or bipolar disorders for insurance purposes. All
disorders--while important to the patient--are not equal in their
severity.
As we study this important issue and consider legislation in this
area, we must make sure that we are only talking about covering well-
established diagnosis and treatments and not simply syndromes that are
in a research phase. Any new law should have specific scientific
standards of proof that demonstrate efficacy.
Mr. Chairman, I look forward to listening to today's witnesses.
Given the expiration of the existing federal mental health parity laws
at the end of the year, this hearing is particularly timely. This
Congress, and this Committee, must decide how to reauthorize this law
and determine what refinements are appropriate. This is quite a
challenging task, but that's why I'm quite pleased we are having a
hearing to explore these complex issues.
Thank you again for focusing on this issue, Mr. Chairman.
______
Prepared Statement of Hon. Albert R. Wynn, a Representative in Congress
from the State of Maryland
Mr. Chairman, thank you for holding this important hearing to
address the ``Insurance Coverage of Mental Health Benefits.'' Mental
health illnesses affect one in five Americans each year. Clearly,
mental health coverage is an important issue and I look forward to
hearing from today's witnesses.
Over the last two decades, a revolution in science and service
delivery has broadened our understanding of mental health and illness
that has improved the way in which mental health care is provided.
Research about the complex workings of the brain has provided us with
the knowledge needed to deliver effective treatment and better services
for most mental disorders.
This notion is supported by a Surgeon General's Report on Mental
Health from 1999. The report concluded that the efficacy of mental
health treatments is well documented, and a range of effective
treatments exist for most mental disorders.
Mental health, however, does not only directly affect many
Americans, but impacts our economy. It is estimated that untreated
mental illness costs the nation $79 billion in lost productivity.
H.R. 4066, of which I am a cosponsor with 238 of my House
Colleagues, is the underlying bill at issue in this hearing. The
measure would require insurers that offer mental health benefits to
treat that coverage the same as they treat medical or surgical
benefits. This legislation, among other things, would help individuals
suffering from depression, bi-polar disorder and post-traumatic stress
disorder. The measure also includes a small business exemption for
companies with 50 or fewer employees.
Unfortunately, the bill does not require plans to provide coverage
for benefits relating to alcohol and substance abuse. Currently, the
number HMOs that cover alcohol and substance are limited. In the year
2000, according to the Department of Health and Human Services, 14
million Americans used illegal drugs and nearly 60 million Americans
are binge or heavy alcohol drinkers. Half of state and a third of
Federal prisoners reported committing their offense under the influence
of alcohol or drugs. Alcohol and substance abuse is clearly an illness
for which we must provide adequate treatment. It will not only improve
the lives of those who suffer from alcohol and substance abuse, but
could possibly reduce crime levels, improving neighborhoods.
While H.R. 4066 has significant flaws because it omits alcohol and
substance abuse coverage, the measure on balance is helpful. H.R. 4066
would provide much needed relief for many patients who are forced to
pay more for mental health care than other health care costs.
Ms. Barna-DeWald and her husband are upper middle class
professionals living in Fairfax, VA. Her ten-year old son, Adam, has
suffered from bi-polar disorder since the age of three. Unfortunately,
treatment restraints placed on Adam by insurance companies and HMOs
deny him access to experts in the field and limited access to therapy,
diagnostic screenings and appropriate hospitalization. If her child
suffered from a broken leg, her insurance would have covered
significant costs for x-rays, treatment, and physical therapy. Instead,
Adam's medical care is limited because of the stigma associated with an
illness of the brain. The unfortunate reality is that a lack of
treatment of brain disorders often leads to the death by suicide of a
bi-polar individual. This story is quite sad. However, consider this
scenario with a low-income, single mother.
Some health insurers are opposed to mental health parity laws like
H.R. 4066 because of concerns that they will drive up costs and
insurance premiums. However, Magellan Health Services, the nation's
largest Managed Behavioral Health Care Organization covering nearly 70
million individuals, reported that it had yet to see a premium cost of
more that one percent as a result of implementing state mental health
parity requirements.
Twenty percent of Americans are affected by mental illness, which
unfortunately costs our economy nearly $80 billion in lost
productivity. Scientific research indicates, that when treated
properly, most mental illnesses are curable at little additional cost
to health insurers. Therefore, the health benefits provided by health
insurers for physical illness should equal that of mental illness. It's
a matter of fairness and common sense.
______
Prepared Statement of Hon. John D. Dingell, a Representative in
Congress from the State of Michigan
Chairman Bilirakis, thank you for convening this hearing on
insurance coverage of mental health benefits. I am pleased to see that
the Subcommittee is taking action on such an important issue within our
jurisdiction.
During my years of advocating for America's patients, one of my
objectives has been to ensure that patients get the health insurance
coverage they have paid for. Many health plans serve their enrollees
well and provide access to appropriate doctors and hospitals when these
services are medically necessary. Unfortunately, we are all familiar
with stories of those with health insurance who did not receive the
care they needed.
This lack of access to care is happening to health plan enrollees
with mental illness. Mental illness is not rare; one in five adults
suffers from a mental disorder in any given year. And yet over two-
thirds of them never receive any treatment.
Why? Partly because health plans provide unequal coverage for
mental health care. Almost 90 percent of health plans place additional
limits on mental health benefits--often in the form of fewer covered
hospital days or higher cost-sharing for outpatient services--that do
not exist for other types of medical care.
The bill that my colleagues, Representatives Roukema and Kennedy
have introduced, H.R. 4066, would level the playing field for patients
suffering from mental illness. This bill has the support of 239 members
of the House and a majority of members of this Subcommittee. It has
been scored by the Congressional Budget Office, and the cost is
minimal.
Because this bill has some cost associated with it, certain parties
oppose its passage. They argue it is unfair to saddle employers and
employees with another cost increase on top of rising health insurance
premiums. They ask, why should everyone else be expected to shoulder
the cost burden of treating plan enrollees with mental illness?
The answer is simple. Unequal insurance coverage of mental health
benefits discriminates against people who suffer from mental illness. I
am not aware of any health plans balking at the portion of premium
increases associated with heart disease, or arguing that it is unfair
to require all plan enrollees to share the costs of treating people who
happen to get cancer.
Mental illness strikes people of all ages, in all economic classes,
and in all parts of the country. Members of Congress know that the
mental health benefits they or their families may need some day will be
there; the plans in the Federal Employees Health Benefits Program are
required to provide equal coverage for mental health services as for
other medical services. We have no excuse for not extending the same
assurance and protection to all other employees and their families with
health insurance coverage.
We will go right into the panel at this point. Dr. Charles
M. Cutler, M.D., is Chief Medical Officer for the American
Association of Health Plans; Dr. Darrel Regier is the Director
of Office of Research of the American Psychiatric Association;
Dr. Neil Trautwein is Director of Employment Policy for the
National Association of Manufacturers; Mr. James T. Hackett,
who was introduced by Mr. Green, he is Chairman and President
and CEO of Ocean Energy in Houston, Texas; and Ms. Kay Nystul
is Psychiatric Registered Nurse, Manager, Clinical Management
Coordinator, Wausau Benefits, Wausau, Wisconsin.
Your opening statements are a part of the record. I would
hope that you would complement them, or supplement them if you
will, orally. And we will proceed with Dr. Cutler at this
point.
STATEMENTS OF CHARLES M. CUTLER, CHIEF MEDICAL OFFICER,
AMERICAN ASSOCIATION OF HEALTH PLANS; DARREL A. REGIER,
DIRECTOR, OFFICE OF RESEARCH, AMERICAN PSYCHIATRIC ASSOCIATION;
E. NEIL TRAUTWEIN, DIRECTOR OF EMPLOYMENT POLICY, NATIONAL
ASSOCIATION OF MANUFACTURERS; JAMES T. HACKETT, CHAIRMAN,
PRESIDENT, AND CHIEF EXECUTIVE OFFICER, OCEAN ENERGY, INC.; AND
KAY NYSTUL, PSYCHIATRIC REGISTERED NURSE, CERTIFIED CASE
MANAGER, CLINICAL MANAGEMENT COORDINATOR, WAUSAU BENEFITS, INC.
Mr. Cutler. Thank you, Mr. Chairman. Mr. Chairman and
members of the committee, my name is Dr. Charles Cutler, and I
am the Chief Medical Officer of the American Association of
Health Plans, AAHP.
AAHP is the principal national organization representing
HMOs, PPOs, and other network-based health plans. Our member
plans provide coverage for approximately 170 million members
nationwide, including enrollees in the commercial market as
well as participating in Medicare, Medicaid, State and Federal
employee plans, and Tri-care.
We appreciate the opportunity to discuss health plan
coverage and mental health benefits. In this environment of
rising costs, employers are facing some very difficult
decisions about coverage and affordability. And it is important
to avoid enacting legislation that may inadvertently reduce
access to health benefits.
According to the AAHP annual survey, 96 percent of health
plans cover mental health and substance abuse services,
including drugs to treat mental illness. In fact, many health
plans reported that the drugs used to treat mental illness
ranked among the top three most frequently utilized classes of
drugs.
What has been a significant factor in enabling health plans
to expand access to mental health care is care management.
Tools such as early identification, use of treatment plans and
care managers, group therapy, physician education and feedback,
and quality measurement, have increased access and improved
quality.
In light of the progress we have made and the current
environment of rising health care costs, we have several
concerns with H.R. 4066, the Mental Health Equitable Treatment
Act of 2002. First, Members of Congress should be troubled by
the prospect of codifying a manual developed by a non-
governmental body, and it was never intended to be used as a
standard for insurance coverage.
The DSM was designed to be used for clinical, research,
administrative, and educational purposes. By requiring parity
for every condition in the DSM, except substance abuse, H.R.
4066 creates a tremendous conflict of interest to the group of
professionals responsible for developing this directory of
conditions.
Second, by codifying the DSM, H.R. 4066 would require
parity for a broad list of disorders, including jet lag,
academic, occupational, and religious problems, where there is
little evidence that treatment actually improves clinical
outcomes. This is in direct conflict with the Institute of
Medicine's recommendations to move toward a more evidence-based
system of health care delivery.
Additionally, requiring parity of this broad list of
disorders has the potential to divert resources away from
conditions where treatment has proven effective and crowd out
these conditions in favor of other more peripheral conditions.
Third, we are concerned that H.R. 4066 would impede the
very care management tools that have enabled plans and
employers to expand mental health benefits by making them more
affordable. As evidenced by our industry survey results, more
patients with previously undiagnosed mental illness are being
identified. Patients with mental illness are benefiting from
disease management, care managers, and the use of evidence-
based guidelines and quality measurement.
Because there are fewer well-defined protocols in mental
health, health plans need the flexibility to manage mental
health benefits differently in order to ensure that the patient
is receiving the most appropriate care possible, yet it is not
clear that this would be permitted under H.R. 4066.
Fourth, H.R. 4066 takes a step back from the goal of
uniformity by adding Federal requirements on top of an already
complex and confusing patchwork of State laws. In doing so,
H.R. 4066 would increase the cost of compliance and result in
more confusion for consumers, employers, and plans over which
law applies.
This is a significant issue for the employee benefit
community and one I am sure that Mr. Trautwein can address
further. But it is an issue that Congress needs to confront on
terms broader than just mental health parity legislation in
light of current health care cost trends.
In conclusion, AAHP and our member plans are committed to
continuing to expand Americans' access to effective mental
health benefits. However, we are concerned that rather than
benefit consumers, the restrictive requirements could have the
unintended effect of narrowing or eliminating benefits
altogether at a time when we are debating how to expand access
to currently uninsured individuals.
Thank you, and I look forward to answering any questions.
[The prepared statement of Charles M. Cutler follows:]
Prepared Statement of Charles M. Cutler, Chief Medical Officer, The
American Association of Health Plans
introduction
Mr. Chairman and members of the Committee, my name is Charles
Cutler, M.D., and I am the Chief Medical Officer for the American
Association of Health Plans (AAHP). AAHP is the principal national
organization representing HMOs, PPOs, and other network-based health
plans. Our member organizations arrange for health care services for
approximately 170 million members nationwide.
AAHP and its member plans strongly believe in the value of quality
mental health services. In fact, health plan coverage and management of
these services has resulted in millions of Americans having access to
mental health care. Moreover, medical management techniques have been
essential to efforts to expand the scope of covered mental health
services, including increased access to prescription drugs that
effectively treat mental illnesses.
We appreciate the opportunity to testify today on the important
issue of insurance coverage of mental health care services. Our
testimony will focus on the following three areas:
(1) The extent to which health plans already cover mental health
services;
(2) Why new legislative requirements must be carefully weighed in light
of rising health care costs; and
(3) Why pending legislation would reduce the quality and increase the
cost of mental health care services.
i. health plan coverage of mental health services
By keeping coverage affordable, health plans have enabled millions
of Americans to afford health insurance who otherwise would have been
unable to afford coverage. In fact, a recent study
PricewaterhouseCoopers (PwC) conducted for AAHP illustrated that,
without managed care, the cost of private health insurance would be
expected to increase an additional $182 billion over the next five
years, or about $1,600 per policyholder. In addition to expanding
access to coverage, health plans have made a wider range of benefits
available to more Americans.
Health plans routinely cover mental health services. In fact, in
AAHP's 2002 Industry Survey, which surveyed plans representing nearly
40 million enrollees, 96 percent of plans reported covering mental
health/substance abuse services. Health plans also routinely cover
pharmaceuticals used to treat those with mental illnesses. Indeed, many
health plans report that drugs used to treat mental illnesses rank
among the top three most frequently utilized classes of drugs, and
nearly half of plans report spending more money on drugs to treat
mental illness than on any other class of drugs.
Most impressive is the innovation health plans have demonstrated in
administering mental health benefits to consumers. For example, the
majority of health plans have established disease management programs
for individuals with depression. These disease management programs
include regular encouragement of providers to screen patients for
depression and dissemination to providers of clinical guidelines on the
treatment of depression. They may also include such beneficial
practices as the use of care managers, group therapy, physician
education and feedback, and quality measurement. As a result, a
substantial percentage of plans have reported demonstrable improvement
in closing the gap between what the scientific evidence tells us are
beneficial practices and what actual practice has been with respect to
the treatment of depression.
These effective strategies are starting to cross over into the
management of other mental health conditions, with a significant number
of plans implementing or planning to implement disease management
programs for bipolar conditions, schizophrenia, anxiety disorders,
substance abuse, and Alzheimer's disease. For example:
<bullet> Medica Health Plan worked with its partner, United Behavioral
Health, to establish a demonstration project that uses
community-based caseworkers to facilitate access for Medicaid
beneficiaries to clinical mental health and substance abuse
benefits and improve compliance with treatment recommendations.
Case managers work with employment services to coordinate
behavioral and vocational plans. Case managers also help
participants address barriers to treatment and employment, such
as housing, child care, transportation, and legal problems. To
date, more than 80 percent of program participants have
completed assessments and are following treatment
recommendations.
<bullet> HIP Health Plan of New York ensures that the appropriate
follow-up is provided to individuals who have been hospitalized
for mental health conditions by offering three levels of case
management programs. First, case managers ensure that members
are scheduled for follow-up visits within two or three days
following discharge. Second, any individuals who fail to
receive their follow-up visit are then either contacted by
phone by trained mental health professionals or seen by
visiting nurses in their homes. Third, those with high levels
of impairment are offered the plan's intensive case management
(ICM). By promoting more care in an outpatient setting, HIP has
seen an 88 percent decrease in the number of readmissions and a
70 percent decrease in the number of hospital days.
<bullet> PacifiCare Behavioral Health, a subsidiary of PacifiCare
Health Systems, launched a program to promote the integration
of behavioral health care services with other aspects of a
member's health care and reduce fragmentation of care. This
effort focuses on developing comprehensive treatment plans that
address prescribing guidelines, treatment compliance, and
clinical outcomes measurement. To date, the program has
impacted approximately 13,000 patients and 7,000 providers, and
has resulted in a 16 percent improvement in treatment
compliance.
This range of approaches in providing access to mental health
benefits is an important indicator of how the market has evolved to
meet consumer and purchaser needs. It is critical that these and other
management tools developed in the future be preserved and promoted,
since they have largely been responsible for improving the quality and
accessibility of mental health benefits for millions of Americans.
rising health care costs
In April of this year, AAHP commissioned PricewaterhouseCoopers
(PwC) to conduct a study of the factors fueling rising health care
costs. The PwC study concluded that, of the 13.7 percent increase in
health insurance premiums experienced by large employers between 2001
and 2002, government mandates, increased litigation, and fraud and
abuse accounted for over a quarter of new spending.
Given the significant role government mandates play in contributing
to rising health care costs, more and more states are considering ways
to evaluate the merits and tradeoffs of proposed mandates before they
are enacted. More than half a dozen states have instituted processes to
analyze the prospective costs and benefits of proposed mandates,
including the impact on the number of uninsured Americans.<SUP>1</SUP>
We believe Congress should have a similar process in place. An
evaluation of the aggregate impact of mandates at the federal and state
level, including those proposed in H.R. 4066, is warranted. If Members
of Congress wish to require employers and health plans to offer a
specific benefits package to their employees and members, or to limit
the utilization of techniques to promote affordability, there should be
an explicit discussion about that objective and a recognition of the
resulting tradeoffs that such mandates will force employers to make.
The continuing effort to enact mandates one by one at both the federal
and state levels prevents a thoughtful discussion of these tradeoffs.
---------------------------------------------------------------------------
\1\ States that have enacted mandate review commissions or panels
include the following: AR, FL, MD, ME, PA, SC, VA, and WA.
---------------------------------------------------------------------------
With respect to mental health parity proposals, cost estimates
vary. The Congressional Budget Office (CBO) has estimated that the
provisions of H.R. 4066 would increase premiums by only 0.9 percent on
average. We do not believe this estimate reflects the true costs of the
bill, in part, because CBO relied on the experience in the Federal
Employees' Health Benefits Program (FEHBP), which had less than one
year of experience with complying with mental health parity
requirements at the time of the CBO estimate.
Other sources have estimated more realistic cost increases. The
California Public Employees' Retirement System (CalPERS) has reported
that mental health parity legislation would cause premiums for its two
PPO options to increase by 3.3 and 2.7 percent, respectively, in 2003.
Similarly, a 1998 study commissioned by the Substance Abuse and Mental
Health Services Administration (SAMHSA) estimated that a mental health
parity law would increase premiums by an average of 3.4 percent.
Specifically, the study found that a federal parity mandate would cause
expenditures on mental health services to increase by 111 percent for
enrollees in PPO plans, by 63 percent for enrollees in point-of-service
plans, and by 11 percent for enrollees in HMO plans.
These projected cost estimates cannot be taken lightly when it has
been estimated that for every 1 percent increase in premiums, an
additional 300,000 Americans lose their health insurance. In fact,
earlier this year, Governor King of Maine vetoed an expanded mental
health coverage bill because of cost concerns. As he said in his veto
message, ``As we look for ways to reduce the costs of health care, we
must not exacerbate the problem by adding new mandates. When you are in
a hole, the first rule is not to dig any deeper.''
iii. concerns with pending legislation
In light of the progress we have made in expanding access to mental
health services, and the current environment of rising health care
costs, it is important to seriously consider the substantive concerns
we have with H.R. 4066, the ``Mental Health Equitable Treatment Act of
2002.''
H.R. 4066 Would Require Parity for Every Condition in the DSM
(Except Substance Abuse)--Even Those Conditions Not Based on
Medical Evidence. Current federal parity law maintains a health
plan's ability to construct mental health benefits that
specifically address the needs of its enrolled population.
However, H.R. 4066 would require parity for all of the
conditions listed in the most recent edition of the Diagnostic
and Statistical Manual of Mental Disorders (DSM), which
includes a broad list of disorders, some of which are not based
on scientific evidence. For example, jet lag (circadian rhythm
sleep disorder; jet lag type, code 307.45), caffeine
intoxication (code 305.90), and academic, occupational, and
religious problems (codes V.62.3, V.62.2, and V.62.89,
respectively) are all conditions listed in the current version
of the DSM that plans would be required to cover on par with
medical and surgical benefits.
Aside from the obvious conflicts this raises with the
national goal recently articulated by the Institute of Medicine
to move towards a more evidence-based system of health care
delivery, the bill also raises the appropriateness of
essentially codifying a diagnostic manual developed by a non-
governmental body that was designed to be used for clinical,
research, administrative and educational purposes and never
intended to be the standard for insurance coverage.
Moreover, while proponents of this legislation have
maintained that this bill does not require plans and employers
to cover any specific mental health services and would, in
fact, permit exclusions of mental health services from
coverage, the reality is quite different. The bill clearly
states that any exclusions of coverage of mental health
services may not result in a ``disparity'' between coverage of
mental health and medical surgical benefits. ``Disparity'' is
not defined, leaving its meaning, and its implications,
ambiguous at best. At worst, this ambiguity will generate
increased litigation and could undermine any flexibility for
plans and employers to design mental health benefits that best
meet the needs of their enrollees and employees.
It is also important to point out that a number of states
require plans to cover certain mental health conditions, but
permit cost-sharing and other limitations. In these instances,
the plan would be mandated to cover mental health benefits
under state law, but any allowance to use different financial
and visit limitations would be overruled by the federal law to
cover those mandated benefits on par with medical/surgical
benefits under federal law.
H.R. 4066 Would Impede the Use of Medical Management
Techniques for Mental Health Services. Health plan medical
management techniques have enabled more Americans to receive
affordable, quality mental health care. As evidenced by our
industry survey results, patients with mental illnesses have
benefited from disease management, care managers, preventive
screening, treatment plans, evidence-based guidelines, quality
measurement, and self-referral. H.R. 4066 would impede the very
medical management tools that have enabled employers to expand
mental health benefits by making them affordable. If Congress
were to preclude the utilization of these tools, it will have a
direct impact on employees and the choices that employers can
offer.
Advocates point to language in the bill that purports to
permit medical management of mental health benefits. But a
closer reading of the language shows that: (1) the requirement
that ``treatment limitations'' (very broadly defined) be
comparable arguably extends the parity requirement to medical
management; and (2) even if the definition of ``treatment
limitation'' was found not to include medical management
techniques, the rule of construction allowing medical
management still requires that medical management be
``comparable'' to that used for medical/surgical benefits.
While this sounds harmless enough, the fact of the matter is
that medical management techniques such as care managers and
treatment plans are sometimes used more often with mental
health care than with other non-mental health disease
categories. This is because there are oftentimes less well-
defined protocols on the mental health side.
Medical and surgical care for many diseases have more clear
care plans, milestones and outcome measures. For example, most
hospitals have specific care plans for bypass surgery based on
the ideal clinical protocol, measures of the patient's heart
and lung functions, and the specific care needed to reach the
best outcome. However, this is not the case for mental health
conditions. The timeline, steps in treatment, milestones and
outcomes are much less defined than on the medical/surgical
side. When an individual has heart surgery, we know when the
heart is functioning well and when the wounds have healed.
Progress in treating mental health conditions is evaluated
using more subjective physician and patient self-assessment or
a patient's ability to perform activities of daily living.
Therefore, health plans need the flexibility to manage mental
health benefits differently in order to ensure that the patient
is receiving the most appropriate care possible. More frequent
use of treatment plans, care managers, and other management
techniques, are often necessary to ensure that patients are
getting the most appropriate care for the condition, yet it's
not clear that this would continue to be permitted under H.R.
4066.
H.R. 4066 Would Exacerbate the Problem of Inconsistent and
Often Conflicting Federal and State Requirements Applying
Simultaneously. By only narrowly preempting state law, H.R.
4066 would add federal requirements on top of an already
complex and confusing patchwork of state laws. In doing so,
H.R. 4066 would increase the cost of complying with this
patchwork of state and federal laws, and result in more
confusion for consumers, employers, and plans over which law
applies.
Also, as mentioned earlier, a number of states have made the
decision to require coverage of certain mental health
conditions but permit limitations in days, visits, and cost-
sharing. The regulatory reality of this legislation before
Congress and its interaction with state law is that this bill
does not respect those state decisions. Plans operating in
those states would be required to cover the benefits mandated
by state law, but then would also be required to cover those
mandated benefits on par with medical/surgical benefits under
federal law.
conclusion
AAHP and our member health plans are committed to continuing to
work to expand Americans' access to effective mental health benefits.
However, we respectfully oppose doing so through mandates or
restrictions on proven strategies that have largely been responsible
for increasing access to health benefits. Rather than benefit
consumers, restrictive requirements could have the unintended effect of
narrowing or eliminating benefits altogether at a time when we are
debating how to expand access to currently uninsured individuals.
Thank you and I look forward to answering any questions.
Mr. Bilirakis. Thank you very much, Dr. Cutler.
Dr. Regier, please.
STATEMENT OF DARREL A. REGIER
Mr. Regier. Chairman Bilirakis, Representative Brown,
members of the committee, and especially Mrs. Roukema, we would
like to thank you for your sponsorship of the bill, and we
would also like to thank you for holding this hearing.
I am Darrel Regier. I am the Director of Research of the
American Psychiatric Association and the Executive Director of
the American Psychiatric Institute for Research and Education.
Prior to coming to the American Psychiatric Association, I
served as a senior research director and associate director of
the National Institute of Mental Health, and for 25 years as an
assistant surgeon general in the United States Public Health
Service, who edited several sections of the Surgeon General's
1999 report.
Our 38,000 members and their patients wish to express their
appreciation to the subcommittee for this support. I will
briefly summarize the main points of my written statement, and
would then be pleased to answer any questions that you may
have.
I trust there is no longer any debate about the scope and
impact of mental disorders in America. As the 1999 Surgeon
General's report put it, few families in the United States are
untouched by mental illness.
Mental disorders know no racial, cultural, ethnic,
religious, geographic, or economic boundaries. The World Bank
and the World Health Organization found that mental illness was
the second leading cause of disability and premature death
worldwide, following only heart disease and impact. Because of
a variety of factors, including chronic underfunding of the
public system and loss of State hospital bed space, our jails
and prisons have become the new institutions for many with
severe mental disorders, as Mr. Strickland mentioned.
Meanwhile, private insurance is reducing coverage and
shifting costs to the public sector. In Minnesota, for example,
Blue Cross/Blue Shield pressured parents of severely ill
children to place them in foster care, so Medicaid would pick
up treatment costs and refused to pay for treatment of near
fatal anorexia because life-threatening eating disorders were
not among the serious mental disorders covered. Fortunately,
the State forced Blue Cross/Blue Shield to alter its practices.
Opposition to parity is economically short-sighted. The
Surgeon General found that the lack of parity coverage of
treatment for mental illness costs American businesses over $70
billion every year in lost productivity, increased use of sick
and disability leave, and higher use of non-psychiatric mental
services.
For example, one study found that depressed workers use
more work disability days than others with an average salary
impact of between $200 and $400 per worker. Another study found
that when a national company reduced its mental health benefits
by 40 percent over a 3-year period, the company paid out 40
percent more in primary health expenses, coupled with a 20
percent increase in absenteeism and a 5 percent decline in
productivity.
Now, the good news is that we understand the science of
mental illness better today than at any time in our history.
Simply put, our treatments do work. Yet Americans seeking
effective treatment for mental illness can't get the care they
require because of open and now legal insurance discrimination.
We believe that short-sighted opposition to parity is led
by an insurance industry that has clear incentives to offer
substandard coverage and avoid risk for selected populations
such as those with mental illness. Competition by insurance
plans to avoid enrolling individuals who are at risk for mental
illness is wasteful and inefficient as mentioned in a New
England Journal of Medicine article by economist Richard Frank,
and serves only to maximize insurance profits at the expense of
business and the economy.
Market segmentation and risk avoidance are precisely the
reason why Congress passed the Health Insurance Portability and
Accountability Act, the HIPA law, to prevent insurance
companies from refusing coverage to individuals with
preexisting conditions. The same principle is at work with
mental health parity.
I understand that Congress is very wary of overregulating
the economy, but what we have right now is a marketplace that
does not work. Insurance works best by spreading the risk
equally over the largest possible population. Lack of parity is
a distortion that prevents the market from working properly.
Because of this anti-competitive distortion, insurers are
given a clear incentive to race to the bottom to avoid risk and
reduce their own costs and liability. This segments the market
from mental health insurance and shifts costs from insurers to
employers, who are unable to take advantage of competition. It
is the antithesis of free market economics.
Worst, lack of parity penalizes responsible employers, such
as those we will hear later, who recognize the value of non-
discriminatory mental health coverage. In effect, insurers are
subverting responsible employers by segmenting risk and cost
and shifting the obligation of mental health care onto an
already overburdened public sector.
Now, the parity costs are low. Despite what you will hear
today, every significant health economist and actuary who has
published credible evidence over the past 8 years, met at a
major Robert Wood Johnson conference that is summarized in this
report in May of 2001.
They completely back the Congressional Budget Office
estimates of nine-tenths of 1 percent at max, and, in fact,
that is a high end required by the Unfunded Mandates Act in
which if you really look at what the impact will be it is four-
tenths of 1 percent after management response, which could not
be considered under the Unfunded Mandates Act.
Now, experience in States and in Federal Employees Health
Benefits Program amply sustains the finding that a Federal
parity law such as envisioned in H.R. 4066 and S. 543 will
result in negligible cost increases to employers. In fact, our
largest concern is not cost overruns; it is assuring that the
management will be, in fact, appropriate and will provide the
appropriate access that we are seeking to obtain with this
bill.
Now, DSM----
Mr. Bilirakis. Please summarize, Doctor, if you would.
Mr. Regier. Okay. While lacking any other effective
arguments, parity opponents have lately started attacking the
Diagnostic and Statistical Manual as too broad and imprecise to
serve as the foundation for covered diagnoses.
I think this is a smokescreen. First of all, the ICD-10 has
12,000--or IC-9 CM has 12,000 diagnoses for all disorders. DSM
has some 200 disorders for mental disorders. Having a code on a
list of disorders does not guarantee payment. What is required
is to have a clinical procedure or a treatment code, a CPT
code, and a treatment plan in order to obtain payment.
So the fact that there are DSM outlier codes that are not
as serious as schizophrenia is no different than the fact that
you have premature baldness, freckles, and a range of--and
diaper rash in the ICD-10. And those are covered at parity with
breast cancer under current law. What we are asking is for, in
fact, equal treatment for the whole range of disorders, so
there isn't this artificial segmentation of disorders in the
mental health area.
So, Mr. Chairman, we would like to--would be happy to
discuss some of the DSM issues that you have raised in the
question period, and we welcome further questions on either the
cost or the DSM issues.
[The prepared statement of Darrel A. Regier follows:]
Prepared Statement of Darrel A. Regier, Director, Office of Research,
American Psychiatric Association
Chairman Bilirakis, Representative Brown, and members of the
Subcommittee, I am Darrel A. Regier, M.D., M.P.H. I am currently
Director of Research for the American Psychiatric Association and
Executive Director of the American Psychiatric Institute for Research
and Education (APIRE). Prior to joining the American Psychiatric
Association, I served as a Senior Research Director for the National
Institute of Mental Health, and as an Assistant Surgeon General in the
United States Public Health Service.
My testimony today is presented on behalf of the American
Psychiatric Association (APA), the national medical specialty
representing some 38,000 psychiatric physicians. Our members are the
frontline specialists in the medical treatment of mental illness. We
practice in all settings, including private practice, group practice,
hospital-based services, nursing facilities, and community-based care,
along with all health programs under the auspices of the Federal
Government such as the Public Health Service, the Indian Health
Service, and the Department of Veterans' Affairs (VA health system).
Our psychiatric physician members also provide service and leadership
as academic faculty and practitioners in academic medical centers of
excellence, and are at the forefront of research into the sources of
and new treatments for persons with mental illness, including substance
use disorders.
First and foremost, APA commends you for holding this hearing on
the vital topic of ending insurance discrimination against patients
seeking medically necessary treatment for mental illness. Our members,
and hundreds of thousands of our patients, also wish to express their
appreciation to the many members of your Subcommittee on both sides of
the aisle who have cosponsored H.R. 4066, the Mental Health Equitable
Treatment Act of 2002, or who have expressed support for parity in
other ways.
As you know, 240 Members of the House have cosponsored H.R. 4066,
President Bush has called on Congress to send parity legislation to him
for signing this year, and 66 Senators have sponsored S. 543, the
Senate companion bill to H.R. 4066. This broad support underscores our
message that there is a moral imperative for ending discrimination
against patients seeking treatment for mental illness, and particularly
that parity is a health policy issue, not a partisan political issue.
We are deeply grateful for your support, and look forward to working
with you, the Subcommittee, and Chairman Tauzin to make parity the law
of the land.
1. mental illnesses are prevalent
We trust that there is no longer any debate in this body about the
scope and impact of mental disorders on your constituents. As the
landmark 1999 Surgeon General's report on mental health noted, ``few
families in the United States are untouched by mental illness.'' About
20 percent of the U.S. population are affected by mental disorders in
any given year, although recent work by Narrow, Regier, et al
(``Revised Prevalence Estimates of Mental Disorders in the United
States,'' Archives of General Psychiatry, February 2002) suggest that
the use of a clinical significance criterion provides a more useful,
accurate--and lower--prevalence measure. According to the article,
``For adults older than 18 years, the revised estimate for any disorder
including substance abuse was 18.5%.'' The full text of the article is
attached to this statement.
Regardless of the exact level of prevalence, the impact of mental
illness is indisputable. The Global Burden of Disease study issued in
the early 1990's by the World Health Organization found that mental
illness was the second leading cause of disability and premature death
worldwide, second only to heart disease and outstripping the disease
burden caused by cancer.
Major problems continue to exist in the public safety net and in
the availability of effective out-patient treatments for acute and
chronic mental disorders. Access to any specialty mental health
services has increased from 0.8% of the population in 1950, to 3% in
1975, about 6% in 1983, and up to 7.0% in 1996. In addition, primary
care settings have become an increasingly important part of the mental
health service system providing such care to 6-7% of the population.
Likewise, voluntary support group services have expanded over three-
fold in the past 15 years (from 1% to 3% of the population).
A tragic consequence of our nation's previous attempts to reform
the mental health system from the Community Mental Health Centers of
the 1960s and 1970s to the current blend of managed Medicaid and State
categorical programs, is that those with the most severe mental
disorders have often seen their services diluted as expansion has
occurred for those with less disabling conditions. As a result of
deinstitutionalization of the State Mental Hospitals over the past 50
years, with beds decreasing from 550,000 in 1955 to about 54,000 in
1997, jails and prisons have become the new institutions for many with
severe mental disorders, with many others left to fend for themselves
as homeless street people. Congress--and particularly Representative
Strickland and Senator DeWine among others--has sought to address the
problem through promising mental health courts legislation that would
help divert some segments out of the forensic system and into
treatment. This is both humane and cost-effective, but it is only part
of the solution to a complex problem.
2. mental illnesses are costly to the economy and to businesses
Clearly, by any standard, mental illness has a major impact on the
lives of millions of Americans, and their families--and employers--
every year. This is a crucial point in the national debate about
parity: mental illness costs the American economy and American
businesses tens of billions of dollars each and every year. In fact,
the Surgeon General's report on mental illness found that the lack of
parity coverage of treatment for mental illness costs businesses over
$70 billion every year in lost productivity, increased use of sick and
disability leave, and higher use of non-psychiatric medical services.
In a similar vein, an MIT/Sloan School of Management report (1995)
found that clinical depression costs American businesses nearly $30
billion a year in lost productivity and worker absenteeism. An article
in Health Affairs (1999) reported that depressed workers have between
1.5 and 3.2 more short-term work disability days in a given 30-day
period than other workers, with an average salary equivalent cost of
disability for these workers of between $182 and $395 per depressed
worker. Put another way, every American taxpayer and every American
business--big or small--is paying directly for our failure to require
non-discriminatory access to medically necessary treatment for mental
illness, including substance abuse disorders.
Notably, a study reported by Robert Rosenheck, M.D., at Yale
University, highlighted the negative impact when a national company
reduced its mental health benefits by 40% over a 3-year period, with a
consequent offsetting increase of its primary health care expenses by
40%. The company's absenteeism rate increased by 20% and its worker
productivity experienced a 5% decline. Presumed savings from reduced
mental health benefits had significant adverse health and productivity
consequences, hidden by a narrow focus on cost of the mental health
benefit alone.
The literature is replete with examples of the clear benefits to
employers of good coverage of treatment of mental illness. For example,
Health Economics reports that treating workers with depression with
prescription medications resulted in a decline in medical costs of
nearly $900 per employee per year, and that absenteeism dropped by 9
days. The Wall Street Journal (1999) reported that a four-year study of
EAP mental health program effectiveness by McDonnell Douglas ``yielded
a four-to-one return on investment after considering medical claims,
absenteeism, and turnover.'' A 1998 study by Johns Hopkins and UNUM
Life Insurance found that employer plans with good access to outpatient
mental health services have lower psychiatric disability claims costs
than plans with more restrictive arrangements. Clearly, there is little
economic sense for employers to selectively limit access to mental
illness treatment.
3. the knowledge base is growing
The struggle in Congress to eliminate arbitrary insurance
discrimination against patients seeking treatment for mental illness
occurs at a point when the diagnostic science and treatment options
have never been better. Mental illness diagnosis and treatment is
accelerating as the most exciting frontier of biological science. The
bipartisan support in Congress for doubling the budget of the National
Institutes of Health, including the National Institute of Mental Health
has directly contributed to the strengthening of the science base in
our understanding of brain functioning and the impact of mental
disorders.
Last year's Nobel Prize winner, Eric Kandel, is a psychiatrist. His
selection underscores the message that scientific advances are leading
to understanding the molecular basis of cognitive processes that are
affected by mental disorders. Breakthrough advances in
psychopharmacology as well as rigorously tested psychosocial treatments
are research peers to those in cancer and heart disease. Disorders of
the central nervous system are on the cutting edge of science for
genetics, neurophysiology, functional imaging, and the study of the
interaction between environmental and genetic factors that pose risks
or protections against the development of disorders and disease.
4. treatment works, but barriers to treatment are significant
This is good news: we understand how the brain works--and how
mental disorders affect the brain--better today than at any time in our
nation's history. Our ability to diagnose mental illness has never been
more precise. And our ability to effectively treat mental illness has
never been stronger. Yet the good news is tempered by the fact that for
Americans in every walk of life, the ability to secure all medically
necessary care for their mental illness is largely negated by open,
legal, and blatant insurance discrimination. As the Surgeon General's
report puts it so eloquently, ``the mental health field is plagued by
disparities in the availability of and access to its services. A key
disparity often hinges on a person's financial status: formidable
financial barriers block off needed mental health benefits from too
many people regardless of whether one has health insurance with
inadequate mental health benefits . . .''
In the absence of parity-level insurance coverage for mental and
addictive disorders, our patients in the private sector are falling
farther behind current standards of access for medical and surgical
services. Over the period of 1988 through 1997, we saw mental health
costs decrease by over 50% while there were minimal changes in medical/
surgical costs. In an uncertain economy, we are concerned that mental
heath services will fall even further behind, and patients requiring
care will see disproportionate cuts in services.
While a parity law will not remove every barrier to mental health
care, it will be a major step forward. We believe that the opposition
to a national parity law is led by an insurance industry that wants to
avoid regulation and has clear incentives to offer poor coverage for
select populations, such as those with mental illness. Congress
addressed problems with pre-existing conditions exclusions through the
Health Insurance Portability and Accountability Act. Now legislation is
needed to prevent insurance companies from offering meager mental
health benefits to avoid attracting beneficiaries in need of the
services.
Writing in the New England Journal of Medicine (December, 2001),
Frank, Goldman, and McGuire put the problem very eloquently: ``Insurers
have an incentive to enroll people who are relatively healthy and
therefore represent a low financial risk. This incentive distorts
competition among health plans because they compete for people they
consider to represent a low risk. It has long been argued that plans
with good mental health benefits would attract people with mental
disorders that are costly to treat (an adverse selection of enrollees),
and insurers tend to provide poor mental health benefits in order to
avoid such enrollees. Competition by plans to avoid enrolling people
who represent high risks, although good for the individual health
plans, is wasteful and inefficient.''
This is a crucial concept. I am mindful of the healthy concern for
overregulation of the marketplace by this Congress, and particularly by
members of the majority in this house of Congress. But what we have now
is a marketplace that does not work. Insurance works by spreading the
risk equally over the largest possible population. The lack of parity
represents a significant market distortion that prevents ``the market''
from working properly. Because of this anti-competitive distortion,
insurers are given an incentive not to compete, but instead to dive to
the bottom, attempting to avoid risk and reduce their own costs and
liability. This segments the market and shifts costs from insurers to
employers, who are unable to take advantage of market competition. It
is the antithesis of free market economics. Worse, it penalizes
responsible employers who recognize the value of non-discriminatory
mental health coverage and prevents them from moving employees where
the work is, as those employees in need of mental health care are stuck
where the benefits are good. In effect, insurers are subverting
responsible employers by segmenting risk and costs and shifting the
obligation of mental health coverage onto an already overburdened
public sector.
As Frank, et al, put it: ``Parity can improve the efficiency of
insurance markets by eliminating wasteful forms of competition that are
the result of adverse selection . . . Parity for mental health benefits
establishes the same floor for mental health coverage and for other
types of medical care.''
5. parity opponents misrepresent current legislation
Much of the opposition to parity is based not on what the various
parity bills actually would do, but on what opponents fallaciously
assert they would do. Both H.R. 4066 and the Domenici/Wellstone bill in
the Senate (S. 543) would leave medical necessity determinations up to
the health plan, and would give employers and insurance companies wide
latitude in benefit design and in management of the services delivered.
These and similar bills are not mandates but should be properly viewed
as coverage conditions.
I'm confident that if insurance companies proposed that Congress
should sanction the exclusion of coverage of cancer or heart disease,
or that Congress should permit insurers to charge diabetics more than
twice as much out-of-pocket for seeing an endocrinologist than for
seeing an internist, or that breast cancer patients should only be
allowed to see an oncologist for 5 visits, every member of this
Subcommittee would be outraged and rightly so. Yet that is more or less
where we are with coverage of treatment of mental illness. This archaic
and discriminatory practice of the private insurance industry limits
mental health coverage in ways that it does not limit other medical
treatment. The MHETA legislation says, in effect, that it is no longer
acceptable to single out one group of patients for special,
deliberately discriminatory and limited care that is uniquely applied
to them because they are diagnosed with a mental illness. It is frankly
difficult to comprehend how those opposed to parity can continue to
sanction the disenfranchisement of patients with one type of medical
condition--mental disorders--from the full rights accorded to all other
patients for their own medical or surgical care.
6. cost of parity
A major concern of employers and insurance companies from the mid
1970's to the mid 1990's was that better mental health benefits would
result in use of more mental health services than were needed or were
cost effective--the so-called moral hazard risk. After reviewing all
available research on this issue, the National Advisory Mental Health
Council came to the following conclusions:
A. The Current baseline treatment costs for mental disorders, as a
percent of total health care premium costs, appear to be lower
than they were a decade ago.
<bullet> The mental health benefits under the Federal Employees Health
Benefits Program (FEHB) dropped from 8% of premium to 2%
between 1988 and 1997.
<bullet> For mid- to large-size corporations the premium cost for the
mental health benefits was halved, dropping from 6% of premium
to 3% during the same period.
<bullet> The average annual growth rate for all mental health care rose
at a 1% lower rate for each year between 1986-1996--a
cumulative 10% lower level.
B. In the context of expanding mental health benefits under several
State and Private Insurance parity initiatives, the expected
large increase in costs did not occur.
<bullet> In Texas and North Carolina, where parity insurance coverage
for State employees was introduced in 1992 with managed care,
the costs dropped 30% to 50% while the percent of the
population accessing some care increased 1 to 2%.
<bullet> In Maryland, where managed behavioral health care had already
penetrated the private insurance market before the 1994
comprehensive State Parity law, premiums had already dropped by
about 50%. Introduction of parity resulted in a slight increase
of total premiums of less than 1%. Most of this increase came
from HMO programs that previously had the most restrictive
mental health benefits.
<bullet> Multiple case studies of private insurance companies with
partial or full parity-level benefits, referenced in the Senate
parity reports, have demonstrated a long-term capability of
controlling costs while often increasing the number with access
to some care.
In addition to the findings of the NAMHC, others report similar
experiences. For example, in response to Energy and Commerce Committee
staff queries for recent real-world data, you may wish to review
testimony before the House Education and Workforce Committee, in which
the representative for Magellan--the largest managed behavioral
healthcare organization in the country, covering nearly 70 million
individuals--reported that ``the implementation of parity legislation
results in only a very modest increase in the total healthcare premium
for a commercial insurer when one starts with a typical, but limited,
mental health benefit. At Magellan we have yet to see an increase of
greater than 1% of the total healthcare premium as a result of state
parity legislation. In fact, our experience is that cost increases
typically range from 0.2% to 0.8% of the healthcare premium.
Furthermore, we have found that these modest increases are similar for
both large and small employers, and in rural, urban and suburban
areas.''
The Subcommittee would also find it helpful to know that Magellan's
experience with mental health parity is not unique. William Flynn of
the Office of Personnel Management (OPM) related a similar experience
of the Federal Employees Health Benefits Program in remarks to the
Senate in July 2001, noting that FEHBP's implementation of parity--not
only for mental health, but also for substance abuse services--resulted
in an average premium increase of 1.64 percent for fee-for-service
plans, 0.3 percent for HMOs, and an aggregate program increase of 1.3
percent for 2001.
With respect to the leading parity legislation in Congress, your
own Congressional Budget Office (CBO) estimated that S. 543, The Mental
Health Equitable Treatment Act of 2001, would, if enacted, increase
premiums for group health insurance by an average of 0.9%. CBO, under
considerable pressure, continues to reaffirm its estimate of 0.9
percent. This is literally pennies per employee.
7. the dsm-iv is an effective, precise diagnostic tool
Because the generic ``anti-mandate'' complaints of some business
and insurance groups has lost its effectiveness, much of the current
objection to parity has focused on concern that the diagnostic criteria
for mental disorders, codified in the fourth edition of the APA's
Diagnostic and Statistical Manual (DSM-IV), are allegedly too broad.
These allegations are simply unfounded. NIH and NIMH research
applications, FDA treatment indications for new drug products, and
legal determinations of competence to stand trial all are predicated on
widely accepted DSM criteria.
The truth is that DSM-IV criteria are included in virtually all
state Medicaid legislation, the Federal Employees Health Benefits
Program guidelines for parity, and in fact the ``medical necessity''
criteria of virtually all managed behavioral health companies employed
by general health insurance companies to manage their benefits. Thus,
the same companies that complain that DSM criteria are too broad
currently use DSM criteria every day for documentation and treatment
justification when determining claims outcomes.
Parity opponents have also focused on peripheral conditions--those
identified in DSM not as DSM diagnoses but as conditions for the focus
of clinical attention--in an effort to imply that if parity is adopted
the floodgates would open for conditions such as ``malingering'' and
``jet lag sleep disorder.'' As a clinician who submits insurance claims
for review, I would like to challenge the business and insurance
witnesses here today to offer any objective evidence that they are
paying for these peripheral conditions to any statistically significant
degree. Since diagnostic codes must be accompanied by credible
procedure or treatment codes, along with evidence of clinically
significant impairment, no insurance company would retain their
managing or reviewing staff if more than a miniscule proportion of such
codes were paid.
The carefully crafted language in both the House and Senate parity
bills fully protects the ability of health plans to make such the
``clinically significant distress or disability'' determinations
required of all DSM-IV disorders. Thus, ``malingering'' is no more
likely to be covered in a post-parity world than it is today. Quite
frankly, it is remarkable that an insurance industry that has
historically sought to avoid responsibility for treating severe mental
disorders is today expressing concern that only severely mentally ill
patients should be covered by parity legislation. Most likely, the DSM
issue is a canard that is intended to distract the Congress from the
real issue: blatant discrimination against a single group of patients
who for no fault of their own happen to need treatment for mental
illness.
8. treatment guidelines focus on effective care
Still others question the range of treatments available to patients
with mental illness, implying that because treatments vary, there is no
standard of effectiveness. This is also not true. The production of
evidence-based treatment guidelines is now developing rapidly in
psychiatry as in the rest of medicine, and we are making every effort
to quickly evaluate the effectiveness of new treatments. As clinical
trials are conducted, previous and less effective treatments for
disorders are generally discarded and no longer appear in treatment
guidelines.
This is no different than the rest of medicine. For example, when
clinical trials showed that the use of carotid endarterectomy as a
means of preventing strokes from atheromatous plaques was associated
with more deaths than medical management, use of the surgical
intervention largely declined. The same was true, for example, of the
use of renal dialysis for schizophrenia, which was at one time proposed
as a means of eliminating ``brain toxins'' that caused psychotic
symptoms. The fact is that treatments for mental illness--typically
involving the combination of pharmacotherapy and psychotherapy--have
never been better than they are today.
9. treatment of symptoms is not unusual in all of medicine
Other opponents of parity assert that we treat symptoms rather than
causes. It is fair to say that for many mental disorders, we do not
fully understand the causal mechanisms, although through NIMH and other
research our understanding of brain functioning and the impact of
mental disorders on brain functioning are rapidly growing. In the
absence of certainty of the precise cause of some mental disorders, we
do indeed treat the symptoms--and treat them very effectively. This is
not different than many other medical surgical conditions.
For example, we know that certain forms of arthritis are associated
with joint inflammations that we are unable to prevent because we do
not now know the full causation, but we nevertheless control symptoms
with non-steroidal anti-inflammatory agents. Likewise, we know that
certain forms of depression and anxiety disorders are associated with
low levels of seratonin and norepinephrine in certain areas of the
brain, and with cognitive and mood symptoms, that we are presently
unable to fully prevent. However, we have very effective medications
that, both separately and in combination with psychotherapy treatments,
offer very substantial symptomatic reductions.
It's worth noting that as recently as the past few weeks, our press
has been full of news stories about two studies that have revised
conventional medical thinking. In one instance, standard use of hormone
treatments in menopausal women was fundamentally challenged. In
another, surgical intervention as a treatment for arthritis was found
to be of questionable utility. These findings underscore an important
fact of medicine: Thankfully our standard of treatment is not a static
measure but is being constantly updated and refined as our knowledge
base increases. This is as true, if not more so, for our understanding
and treatment of mental illness. Yet we commend the expansion of the
knowledge base for medical treatments on the one hand, while
criticizing treatment of mental illness for not being ``set in
concrete'' on the other. This dual standard has, I believe, its
foundation in ongoing stigma about mental illness.
Let me put this another way: Arguing against parity coverage of
mental illness treatment because we are not absolutely certain of the
precise cause of mental illness is like arguing against treating cancer
because we are not absolutely certain what triggers abnormal cell
growth.
10. 35 states have parity laws
Mr. Chairman, opponents of parity will always find one more excuse
why Congress should continue to permit discrimination against patients
with mental illness. APA believes that the time has come for our
national legislature to say ``Enough.'' 35 states have enacted some
form of parity legislation. While the definitions of parity and the
scope of coverage vary, the fact remains that not a single state parity
law has been repealed, and several narrow laws have been expanded.
This is a crucial point. State legislators and Governors are
certainly at least as cost conscious as the Congress, if not more so.
Yet 35 states have enacted some form of parity law, and not one has
repealed it. That should tell you a great deal about real-world
experience with parity. Unfortunately, state parity laws vary in the
scope of coverage and do not, of course, extend to ERISA plans, which
is why we are here today.
11. time to end legal insurance discrimination
Mr. Chairman, the struggle over parity is a struggle for basic
human rights. It is the story of the triumph of science over stigma and
ignorance. There can be no doubt that mental illness exacts a terrible
toll on our economy and our patients. There is no doubt that our
understanding of the causes of mental illness has never been greater,
and our ability to effectively treat these devastating illnesses has
never been better. Why then do we continue to treat one group of
patients differently from all others? On behalf of our 38,000 physician
members, their patients, and their patients' families, we urge you to
require simple equity in the treatment of mental illness. Thank you.
Mr. Bilirakis. Thank you. Thank you, Doctor, and there will
be questions.
Mr. Trautwein, please, sir.
STATEMENT OF E. NEIL TRAUTWEIN
Mr. Trautwein. Thank you, Mr. Chairman, and Mr. Brown, and
members of the committee. My name is Neil Trautwein, and I am
Director of Employment Policy for the National Association of
Manufacturers.
I appreciate this opportunity to appear before you this
morning to discuss this important issue. Manufacturers like Mr.
Hackett here are strong supporters of employer-based health
care. Ninety-seven percent of NAM members provide coverage to
their workers, and most of those people provide coverage to
dependents.
These health plans cover a wide array of benefits of
medical/surgical and mental health and employee assistance
plans. Employers support mental health care benefits, because
mental health conditions affect management and workers alike.
It is the compassionate thing to do to provide coverage--mental
health coverage.
However, in the current cost environment, the ability of
employers to provide good quality benefits is being compromised
by increasing costs. A majority of NAM members are experiencing
cost increases above the stated national rate of inflation.
Thirteen percent of our smallest members are experiencing cost
increases above 26 percent. This is particularly a tough time
for employers to provide health coverage.
The NAM is opposed to the legislation currently under
consideration by this committee and the Congress, Mrs.
Roukema's bill, and the bill--comparable bill in the Senate,
the Domenici-Wellstone bill.
The Congressional Budget Office recently issued a
clarification of their prior estimate on the Roukema and
Domenici-Wellstone bills that really bears out, really more
than bears out, our previous cost concerns. CBO's July 12,
2002, memo--and I would ask permission to insert a copy of that
in the record----
Mr. Bilirakis. Without objection.
Mr. Trautwein. Thank you, sir. Indicates that once you
remove non-affected populations--that is, populations that
would not be subject to the mandates of size or prior coverage
or the employer doesn't offer mental health coverage--the
effects are quite substantial. For affected firms, this could
mean cost increases between 30 to 70 percent. So it is
something that does have our great attention and our great
concern.
As has been noted, CBO had previously indicated that
premium increases so different from the cost increases would
average .9 percent. We think a big part of this problem is the
expansive approach taken by these bills. And, in particular, we
are troubled by the use of the DSM in this process.
The DSM is a professional classification of mental health
conditions maintained on a proprietary basis by the American
Psychological Association. No other area of medical practice
has such a blanket array of coverage.
This legislation doesn't mandate any coverage of any
particular condition in the DSM, but if you cover one you
better cover all or be subject to the discrimination
provisions. There is no apparent distinction between the most
recognized, the so-called brain-based disorders, and such
celebrated conditions as the jet lag condition we have
discussed, malingering, and my kids' personal favorite, which
is oppositional defiant disorder.
The Roukema bill allows plans to maintain medical necessity
and utilization techniques, but though the science is advancing
and progress is being made to getting more objective standards,
it is still a very subjective area. Where there is
subjectivity--and if you talk to practitioners in the area,
there is often disagreement about treatment where there is
disagreement, and these days there is often litigation.
Increased litigation is a very substantial deterrent for
firms of any size to offer coverage, but particularly for the
small to mid-sized firms who aren't affected by the size
limitation in this legislation.
Maintaining different categories of treatment are very much
a part of plan design today. Many of the most comprehensive
plans maintain these distinctions, and I would note that no
similar expansion of coverage is planned for in the Medicare
area.
Mr. Chairman, our clear preference is that no expansion be
made beyond the 1996 law. But if expansion is contemplated, we
would urge that the example of the States be looked at, where a
majority of the States, 30 States, have taken the tack of
identifying the most serious disorders, still allowing
employers to provide more than is mandated but limiting the
effect of the mandate.
Mr. Chairman, I thank you, and I look forward to any
questions you may have.
[The prepared statement of E. Neil Trautwein follows:]
Prepared Statement of E. Neil Trautwein, Director of Employment Policy,
National Association of Manufacturers
Mr. Chairman, my name is E. Neil Trautwein and I am director of
employment policy for the National Association of Manufacturers. I am
pleased to appear before you today on behalf of our more than 14,000
members (including 10,000 small and mid-sized companies) and 350 member
associations serving manufacturers, employers and employees in ever
industrial sector and all 50 states. We commend you for holding this
hearing to focus attention on the issue of insurance coverage of mental
health benefits.
Manufacturers are strong supporters of employer-sponsored health
care. Ninety-seven percent of NAM members voluntarily offer coverage to
their workers. The median contribution level among NAM members is 80
percent; 25 percent of NAM members continue to cover 100 percent of
premiums.
Our health plans cover a wide variety of benefits, including mental
health benefits and employee assistance plans. We understand that
mental illness can affect workers and management alike. Mental health
benefits, like medical and surgical benefits, are important to the
productivity of our members.
Nevertheless, we are greatly concerned by the mandated expansion of
these benefits, particularly in the current cost environment. We are
opposed to the mental health parity legislation currently under
consideration by this committee and the Congress: the Roukema (H.R.
4066) and the Domenici-Wellstone (S. 543) bills. In our view, this
legislation is too expansive and explosive in its potential to add to
the already rapidly rising cost of coverage. We urge Congress to look
to less expansive and less burdensome means to improving insurance
coverage for mental health benefits. We stand ready to assist these
efforts.
health care inflation has returned
Employers, workers and dependents are experiencing severe pressure
from rising health coverage premiums. Fifty-seven percent of NAM
members are experiencing cost increases at or above the 13% average
rate of inflation. Thirteen percent of our smaller members have
experienced rate increases of more than 26 percent.
Employers are increasingly less able and less willing to absorb
health cost increases in the current economy. Workers are already
feeling the pinch in terms of a greater share of premiums, higher
copayments and deductibles and reduced benefits. To a large extent, it
is workers and dependents that will bear the brunt of future cost
increases from mandated benefits or other factors.
This cost pressure is unlikely to abate in the foreseeable future.
Though pharmaceutical costs have received the lion's share of recent
attention, it is but one factor among many today--and not even the
leading factor at that. Other factors include: health care spending by
our aging and rather sedentary population; increased use of health care
services by workers unaware of their true cost; the movement away from
the most tightly controlled managed care networks; and advances in
medical practice and technology that leads to increased spending at the
very earliest days and at the end of our lives. Given the difficulty of
addressing any one of these many factors, we employers tend to be
resistant to the addition of any type of mandated benefit.
cbo clarifies true cost of parity mandate for affected firms
We have long believed that the Congressional Budget Office's (CBO)
estimate of an average 0.9 percent premium increase greatly understates
the potential impact of mental health parity legislation. A July 12,
2002 memorandum from Jennifer Bowman, Jeanne De Sa and Stuart Hagen
from the CBO that clarifies their previous estimate demonstrates that,
if anything, our cost concerns were greatly understated.
The CBO memorandum describes their 0.9 percent estimate to be:
``a weighted average of the effects across both affected and
unaffected plans. Because the bill would exempt firms with 50
or fewer employees (about 30 percent of private sector
employees) from the federal requirements, because a number of
states already have laws with similar requirements, and because
some firms do not offer mental health benefits, a number of
firms would face little or no additional costs from complying
with the federal law. On the other hand, many firms that
currently use benefit design elements that would be prohibited
under the bill, such as having different day or visit limits,
deductibles, coinsurance or copayments for mental health
benefits than they have for medical or surgical benefits, would
have experience increases in premium costs higher than 0.9
percent.''
The memorandum goes on to estimate that ``affected plans would
experience an increase between 30 and 70 percent in their mental health
costs.'' These cost increases will be reflected in higher claims costs
which in turn will lead to higher premium costs--on top of the already
rapidly rising cost of health coverage.
As I noted earlier, employers have a limited array of options with
which to respond to rising premium costs. Given these latest, explosive
estimates on the effect of the proposed new mental health parity
mandate, many employers who can, likely will, consider dropping mental
health coverage entirely. Though some employers may seek to establish
or expand employee assistance programs to help compensate for the loss
of mental health coverage, workers and dependents may find themselves
largely without mental health benefits. This is a result that would
serve no one well.
roukema bill too expansive
The Roukema bill changes the definition of ``mental health
benefits'' from those specified under the plan to ``all categories of
mental health conditions listed in the Diagnostic and Statistical
Manual of Mental Disorders, Fourth Edition (DSM-IV).'' No other area of
medical specialty has similar blanket coverage, though I strongly
suspect that other specialties will quickly beat a path to Congress'
door for equivalent protection. Maintaining different categories of
treatments (e.g., rehabilitative or chiropractic services) and
different cost-sharing structures is integral to benefit plan design.
Many of the most comprehensive plan designs maintain differences
between categories of mental health conditions. Employer-sponsored
health plans need the flexibility to experiment with differing
coverage, or, indeed, with full parity as some plans have done.
Mandated coverages take this needed flexibility from employers.
In fact, we may well see litigation to determine which categories
of medical and surgical services will be matched to mental health
services to determine what parity coverage will be. No similar
expansion is contemplated for the Medicare program (which imposes
different cost-sharing and limits on treatment for mental health care
than for medical or surgical benefits)--a wise precaution given
Medicare's precarious future finances.
The Roukema and Domenici-Wellstone bills state that plans are not
required to offer any mental health benefits or any particular mental
health benefits. Though plans are not required to offer services, if
they offer one mental health benefit, they must offer all if to do so
otherwise would amount to discrimination. The Roukema bill apparently
allows no distinction to be drawn between serious disorders like major
depression, schizophrenia and bipolar disorder and such celebrated
conditions as Circadian Rhythm Sleep Disorder/Jet Lag (DSM-IV 307.45),
Partner Relational Problem (V61.1), Malingering (V65.2) and
Oppositional Defiant Disorder (313.81). Our purpose is not to make
light of any of these conditions, but to emphasize the need to draw
distinctions in the level of coverage. I enclose a partial compilation
of additional DSM-IV conditions at the conclusion of my testimony and
request that it be included therein.
The Roukema and Domenici-Wellstone bills also allow plans to
maintain medical necessity and utilization management techniques.
However, the subjectivity inherent in mental health care (researchers
note a wide variance of views on what are and are not mental disorders)
will make use of these techniques difficult. Too strict an
interpretation of medical necessity will invite further legislation and
greater litigation. Too loose an interpretation may lead to the kind of
``anything goes'' mentality that led to insurance fraud seen frequently
in the 1970s through 1990s.
Increased litigation surrounding medical necessity determinations
is a substantial deterrent to offer mental health coverage for small to
mid-size employers who do not fall within the 50-employee carve-out.
Indeed, as costs increase as a consequence of the parity mandate, these
may be among the first employers to be priced out of coverage.
Many have pointed to the ability of managed care to tightly manage
benefits for the proposition that expanded mental health parity can
also be effectively managed. Employers and insurers jointly developed
the concept of managed care to provide better and more cost-effective
care. However, the era of tightly managed care has largely passed as a
result of consumer demand and the much-debated Patients' Bill of Rights
proposals. Managed care is unlikely to be able to manage this expansive
new benefit mandate.
We are troubled by the use of the DSM-IV, a professional
classification of mental health conditions maintained on a proprietary
basis by the American Psychiatric Association (APA). This exhaustive
compilation--which is updated by vote of the members of the APA--is
more suitable to professional practice than benefit administration. As
the DSM-IV notes, ``[m]oreover, although this manual provides a
classification of mental disorders, it must be admitted that no
definition adequately specifies precise boundaries for the concept of
`mental disorder.' '' Health plans are better more appropriately
characterized by lists of defined benefits than by blanket coverages.
roukema bill is also too restrictive
The Mental Health Parity Act of 1996 prohibited group health plans
from maintaining different annual or lifetime limits on mental health
services than for medical or surgical benefits. The Roukema bill would
also prohibit plans from maintaining different cost sharing or limits
on days or visits. Plans would still be permitted to carve out mental
health benefits.
Employer-sponsored health plans need the flexibility to manage
health benefits, especially in today's cost environment. Though the
trend--in response to employee and consumer demands--has been away from
more restrictive management of benefits, this proposal takes almost
every option employers have to manage the benefit--except for the
litigation-prone determination of medical necessity on a case-by-case
basis. Greater flexibility in the management of mental health benefits
is required.
majority of states take different approach
Our clear preference, given the current health care inflation, the
CBO's latest clarification of the potential costs of this mandate, and
the problems identified above with the Roukema bill, is that no
expansion be made beyond the 1996 law. But, we also recognize the large
body of support in Congress for mental health parity as well as
President Bush's own commitment to the concept. Therefore, we encourage
this committee and the Congress to consider the following if it is
inclined to act in this area.
Some thirty states (including Florida and Texas, but not Ohio) have
taken the approach of specifying which conditions are subject to the
parity mandate. These conditions are, most often, the serious, so-
called ``brain-based'' disorders like schizophrenia, major depressive
disorder or bipolar disorder. This would certainly be preferable to
adopting the whole of DSM-IV if our preferred position of allowing the
plan to define the scope of parity coverage is not taken.
In addition, plans should be afforded some greater degree of
flexibility in administering the benefit. If Congress is to move beyond
the scope of the 1996 law, then it should do so more cautiously given
the current cost environment and the greater projected cost impact of
the Roukema bill.
conclusion
Employers voluntarily offer a wide range of benefits to their
employees, including mental health benefits and employee assistance
plans. The NAM opposes mandated health benefits because of rising
health care costs and the need for greater flexibility of benefit plan
administration. We oppose the Roukema bill and its Senate counterpart,
the Domenici bill, which, though well-intentioned, are flawed in their
approach. We urge Congress and the Bush Administration not to take
additional steps that will add to the existing cost of coverage and
instead look to more limited measures taken by the states--if any
expansion of the mental health parity mandate is undertaken.
Thank you, Mr. Chairman. I will look forward to any questions you
may have.
[GRAPHIC] [TIFF OMITTED] 81493.001
[GRAPHIC] [TIFF OMITTED] 81493.002
[GRAPHIC] [TIFF OMITTED] 81493.003
Mr. Bilirakis. Thank you very much, Mr. Trautwein.
Mr. Hackett?
STATEMENT OF JAMES T. HACKETT
Mr. Hackett. Thank you, Mr. Chairman, and all of the other
members of the subcommittee for holding this hearing and giving
us an opportunity to speak to a very important issue that
America faces.
In January of 2002, as Congressman Green mentioned, we
implemented voluntary mental health parity for our employees.
We have 1,100 employees. Our medical claims for mental health
amount to about 3.7 percent of our overall claims, to give you
some flavor for the amount of cost that this represents that
we're speaking of. We estimated that our costs would go up by
1.3 percent based on this change to our benefits program.
So I can assure you that those of us--the other two
companies who went out and did the same thing with us in
Houston feel very strongly that the cost estimates that were
previously quoted are very much on target with our experience
in terms of actual practice as opposed to theoretical
conjecturing.
We believe that the productivity gains, the fairness issue,
and the compassion issue, far outweigh the costs involved in
this particular change for our companies. We think it is good
for our employees. We think it is good for the Houston
community. We think it is absolutely essential for the American
people to have mental health parity.
Why? Over 15 percent of the disease burdens, more than
cancer, arise from mental health. We believe that in our own
personal lives. It is not black magic anymore, which I suggest
to you that most businessmen still believe it is. It is not a
character flaw.
It is a physiological issue. It can be treated with, we
believe, and it can be dealt with for Americans. And two-thirds
of those that have it don't seek treatment because of the
stigma and because of the cost issue, and I firmly, firmly
believe in that.
We have personally experienced in our family life an
inequity that applies to this particular rule. It is not what
drove us to change our mental health plan, but it is an exact
example of why it is a problem. If it were not, the resources
of my personal family would have had huge problems with a
daughter who suffered from sexual assault 3 years ago at the
age of 16.
That daughter suffered post-traumatic syndrome disorder.
That is not one of the causes that was mentioned by Dr. Ganske.
Importantly, it is not one of the listed disorders that are
claimed to be serious disorders. They mostly don't apply to
young children.
She was--what that is described as medically is that you
suffer from intense fear, helplessness, or horror. And horror
is the right word, I promise you. She suffered panic attacks,
was not able to attend school for over a year. In-patient
treatment was required outside of the State of Texas, because
no Texas facilities could handle a child of that age.
We had extensive treatment, and she was able to recover.
And, fortunately, she is going to Villanova next year for
college a year after she was supposed to, but it is a dream
come true. I promise you that if she had not gotten treatment,
she would not be recovered. I promise you she would be a shadow
of her former self if she had not gotten treatment. It is that
powerful to have the right people dealing with this.
Second, I promise you she would not have recovered if it
was up to our plan at Ocean Energy to help out a family to do
it, if they didn't have the resources that we had. I promise
you that is a fact, and now our plan actually helps poor people
in our employ to actually help themselves and their families
out of dire circumstances.
Existing plans like OEI's--Ocean Energy's plans--
discriminate by duration of treatment, by co-payments, and by
diagnosis. Uneven and inadequate coverage must end. Voluntary
efforts like ours will continue, but I promise you they will be
slow; they will be spotty. It will disadvantage people for
decades if we don't make this change.
There is a lot of misinformation surrounding this issue, an
unbelievable amount to me, when you actually experience it in
your families, as many of us have and many of us don't want to
admit that we have. And I think that the start of this is to
take the wonderful and rare opportunity that we have as
legislators in this country to actually make a meaningful
impact on the welfare of those in our States, as well as the
welfare of all Americans.
The cost is small, and I challenge anyone to dispute this.
The benefit to America is enormous.
Thank you very much.
[The prepared statement of James T. Hackett follows:]
Prepared Statement of James T. Hackett, Chairman, President and Chief
Executive Officer of Ocean Energy, Inc.
Mr. Chairman and Members of the Subcommittee, thank you for holding
this hearing and providing me the opportunity to offer my perspective
on insurance coverage of mental health benefits. I am James Hackett,
Chairman, President and CEO of Ocean Energy, one of the largest U.S.
independent oil and gas exploration and production companies with an
approximate $3 billion market capitalization. We are based in Houston
and employ 1,000 people around the world.
At the beginning of 2002, Ocean Energy voluntarily established full
parity in insurance coverage for our workforce for mental health
services. We took this step along with two other Houston companies,
Weingarten Realty Investors and The Houston Chronicle; an announcement
that a fourth company is adopting parity for its workforce is imminent.
Each of us has estimated that any increase in cost due to parity will
be minor and more than offset by avoided costs of lost employee
productivity.
In addition, the leaders of these organizations have recently
banded together to conduct a letter-writing campaign to our peers in
other Houston corporations to encourage them to review their own
insurance coverage to ensure parity between mental health benefits and
coverage for medical and surgical care. The reason we are taking this
public action is very clear: our employees, the Houston community and
the American people deserve access to mental health care equal to that
of physical health care.
Why? Mental illness is the second leading cause of disability and
premature mortality in the United States. Mental disorders collectively
account for more than 15 percent of the overall burden of disease from
all causes, and slightly more than the burden associated with all forms
of cancer. With striking scientific advances over the last half
century, mental disorders are now reliably diagnosed and for virtually
every such disorder, there is a range of treatments and services that
have been shown to be effective. Those treatments have efficacy rates
comparable to or exceeding those for many medical and surgical
conditions. Yet the Surgeon General's 1999 Report on Mental Health
notes that nearly two-thirds of all people with diagnosable mental
disorders do not seek treatment. ``Concerns about the cost of care--
concerns made worse by the disparity in insurance coverage for mental
disorders in contrast to other illnesses--are among the foremost
reasons why people do not seek needed mental health care,'' the Surgeon
General reported.
Sadly, I learned about the inequities in the coverage of mental
health services after my teen-age daughter was the victim of a sexual
assault that led her to suffer from post-traumatic stress disorder. A
diagnosis of PTSD means that an individual experienced an event that
involved a threat to one's own or another's life or physical integrity
and that this person responded with intense fear, helplessness, or
horror. Her despair left her with severe panic attacks that were so
intense that she could no longer attend her high school and had to be
treated at an inpatient center. This facility was out of state because
no such inpatient care for teenagers existed in Texas. After missing a
full-year in school and undergoing very expensive psychiatric and
psychological treatment, she was able to recover and is now looking
forward to attending college, a dream we had forsaken three years ago.
I cannot describe to you the agony that my family experienced as we
sought first a diagnosis and then the appropriate treatment for this
violent offense against a young woman. It was during this process that
we became exposed to the often-overlooked and highly stigmatized mental
health care system and the fact that in America--the land of the free
and the plenty--many citizens, despite having so-called ``good
insurance coverage,'' simply cannot afford to receive the care their
condition requires.
Fortunately, we did have the financial resources to provide the
medical care that my daughter needed and our family the support it
needed to deal with the illness. If we had depended on our company-
provided benefits for full payment our daughter would not have been
able to receive the needed inpatient treatment nor avail herself of the
needed followup psychiatric treatment. I am certain that she would be a
shadow of her former self. Today, that daughter is a beautiful example
of how access to the proper mental health treatment can literally mean
the difference between life and death. She also exemplifies how the
medical community is now learning to treat mental illness more
successfully than heart disease. The treatment success rate is more
than 80 and 60 percent for clinical depression and schizophrenia,
respectively, while the treatment success rate for heart disease, for
example, is considerably lower--between 40 and 50 percent.
Currently, Federal law allows health-insurance discrimination
against people with mental disorders: discrimination in duration of
needed treatment, discrimination in cost-sharing burdens, and
discrimination by diagnosis (allowing insurers to cover some mental
disorders but not others despite the need for treatment). As a result,
millions of Americans who experience mental disorders are likely to
encounter uneven and often inadequate mental health coverage, usually
in the form of disproportionately higher co-payments and limits on
inpatient and outpatient visits. While I personally believe as a
business leader that providing mental health benefits on par with
physical health benefits makes not only economic but moral sense, there
is a need for governmental intervention to end insurance discrimination
against mental illness. That is why I implore you to support the Mental
Health Equitable Treatment Act, H.R. 4066, which prohibits group health
insurance policies providing mental health benefits from imposing
treatment limitations or financial requirements on the coverage of
mental health conditions unless comparable limits are imposed on
medical and surgical benefits.
You have a rare opportunity here to make a difference in the lives
of millions of Americans without creating a detriment to American
business. A recent MIT study concluded that clinical depression alone
costs U.S. businesses nearly $30 billion a year in missed days and poor
work performance. Business leaders should not overlook such information
when reviewing their insurance coverage as it relates to mental health
parity. But unfortunately they do. Too few businesses have really
examined mental health parity--typically because of misunderstandings
regarding mental illness, the erroneous belief that parity means
additional cost, and misperceptions about the efficacy of treatment. I
was one of those business leaders until my personal circumstances made
me see what was going on in our own company. Today more than ever,
managers of every business have the opportunity to support their
employees while, at the same time, reducing the cost to their companies
of mental health-related productivity losses.
I do believe that in time, most business leaders will realize, as I
have, that providing mental health benefits on par with medical and
surgical care is good for the bottom line. But quite frankly, we cannot
afford to wait for that time. Mental health parity is good for American
workers and good for the American economy, and for that reason I
support H.R. 4066.
I thank the Subcommittee for holding this hearing and urge you to
adopt H.R. 4066 as introduced. I would be pleased to answer any
questions you may have.
Mr. Bilirakis. Thank you so much, Mr. Hackett.
Ms. Nystul?
STATEMENT OF KAY NYSTUL
Ms. Nystul. Thank you, Mr. Chairman, and members of the
committee for--I truly appreciate this opportunity to speak
before this panel in regards to mental health coverage. I am a
registered nurse with over 20 years of experience in the field
of mental health and feel very strongly about doing the right
thing for patients in need of mental health treatment.
Today I work for Wausau Benefits as a nurse case manager,
and part of my job--my whole job, actually, is to ensure that
people with mental illness get the care they need when they
need it at the appropriate level of care that they need it.
I am also--one of the primary resources is their health
plan. Therefore, public policy that encourages health plan
sponsors to continue offering mental health coverage for those
who truly need it is vital. There are limits to health plan
benefit funds, and so choices have to be made. Unreasonable new
Federal mandates would put these already limited health plan
funds at risk.
Employer plan sponsors must choose what coverage to offer
or, indeed, whether to offer coverage at all. Mandates that
prescribe how plan sponsors must provide for mental health
coverage, and, hence, how much--how they must spend it create
an incentive for employers to not offer the coverage at all.
I know this is the opposite result of what Congress is
trying to achieve. It is also very much at odds with what
employer sponsors do voluntarily today. Wausau Benefits provide
employee benefit plan administrative services for 434 employer
groups ranging in size from 200 employees to large national
accounts. We do business with two-thirds of the health care
providers in the United States.
I have experience working in hospital settings, eating
disorder units, chemical dependency and substance abuse
treatment support units, and community support programs. Given
my clinical experience, I have concluded that while every
situation is unique, there are appropriate levels of care that
will achieve the same desired results. That is where case
management can be very effective.
Levels of care can be high cost or low cost. Most patients
prefer the least restrictive treatment setting, which is
generally more low cost, if at all possible, which is certainly
consistent with both case management and quality of care
objectives.
In my role as a nurse case manager, my No. 1 job is to be
an advocate for the patient. Case management does empower the
patient to get to an independent state through education,
assistance in assessing treatment options, and developing
support systems. People need support and enough information
about their illness to help them make informed decisions.
For some disorders, there are good alternative treatments
that will provide the same quality of care at a more--as the
more expensive clinical settings but at a fraction of the cost.
If all the DSM conditions were to be eligible for coverage,
there would inevitably be services to spend the money on,
whether or not an actual clinical need for such services is
proven or effective. It is critical that plans be able to
continue using behavioral health management techniques and
criteria, so mental health dollars can wisely be spent.
Wausau Benefits has three concerns with this bill. First,
the bill attempts to extend the concept of parity to all
illnesses defined in the DSM-IV--a policy decision that was
questioned in our appearance before the Education and Workforce
Committee in March and repeated again today.
Second, the bill in its rules of construction purports to
allow plans flexibility in the way they manage mental health
cases, but, in fact, forces plans to use management tools only
if they are designed and applied exactly as they are in
medical/surgical cases.
We argue that this formula calls into question whether
plans can manage serious mental illness differently from the
way they manage less serious behavioral problems and leaves
open to court interpretation whether a plan's use of management
tools for mental health cases offers enough for management of
medical/surgical cases to be considered in violation of the
bill.
Finally, Wausau Benefits questions the overreliance of the
bill on medical necessity as the only screen for inappropriate
or even harmful treatment of mental health cases.
To highlight the problem presented by the overly broad
scope of this bill, let me cite a few real cases that we have
faced as an administrator of benefits for large companies
across the country in recent years. We have had a request for
treatment for a college-age student who was kicked out of
school for drinking. His parents would not allow him back home,
wanted him to suffer consequences, and put him in 24-hour
treatment.
Costs of facilities like this can range anywhere from $300
to $1,650 a day. The patient could have safely and effectively
been treated at an outpatient setting, but since there was
nowhere for the patient to live the facility would not
discharge him.
We have also had requests for a 16-year old girl who was
oppositional defiant. She was often truant from school,
impulsive, didn't follow rules at home, and caused chaos in the
family. Her family requested in-patient treatment for 9 to 12
months at a facility at approximately $300 per day.
If you do the math on that, that can be over $100,000 for
only 6 to 9 months of the treatment requested. And one case
could certainly cause significant cost to that plan.
Another case where a parent insisted that a 13-year old
child needed 12 months of intensive in-patient treatment and
would not consider anything less. The bottom line was they
didn't want the child at home because he was not following
rules and not compliant with homework. There were absolutely no
symptoms to justify confinement, yet this family wanted these
services.
We have also had requests for 4-year olds to be admitted to
acute psychiatric in-patient facilities, because they have had
aggressive behaviors, and, in the particular case I am citing,
because he had been kicked out of 4 day cares. His single
mother had begun a new career, was unable to stay home with the
child, and certainly needed and wanted the placement that 24-
hour in-patient provided. She successfully persuaded a doctor
to agree to admit the child at roughly $1,600 a day per cost.
Mr. Bilirakis. Would you please summarize, Ms. Nystul?
Ms. Nystul. In summary, finding just the right policy
answer is a complex task, yet the desired outcome is simple.
There is clear need for mental health resources to be carefully
allocated to the right cases and right treatment options. As
stated earlier, this bill would require parity to be applied to
all mental health conditions listed in the American Psychiatric
Association's Diagnostic Statistical Manual.
Federal mandated application of coverage for all conditions
listed in the DSM-IV is not the right prescription for
effective allocation and delivery of mental health benefits. A
clear distinction needs to be drawn between biologically based
serious mental illness and all of the other conditions listed
in the DSM-IV, which I have mentioned in my testimony.
In conclusion, mandating parity treatment of the entire
DSM-IV is not the answer. Federal mental health policy must be
crafted in such a way that people who need mental health
treatment do get it. Federal mandated health policy must not
put funding sources at risk. Otherwise, people will not be as
likely to seek care when they need it.
When people suffer from serious mental illness and receive
care when they need it, everybody wins. Employers get----
Mr. Bilirakis. Ms. Nystul, I am sorry, but you are three
and a half minutes over time, and I--can you finish up?
Ms. Nystul. One last sentence. The employees get their
lives back, the employer gets their employees back, and no one
faces financial devastation.
Mr. Bilirakis. Thank you.
Ms. Nystul. Thank you.
[The prepared statement of Kay Nystul follows:]
Prepared Statement of Kay Nystul, Wausau Benefits
introduction
Chairman Bilirakis, I truly appreciate the opportunity to appear
before the Health Subcommittee and provide a statement on the issue of
mental health coverage. I am a registered nurse with over 20 years of
experience in the field of mental health and feel very strongly about
doing the right thing for patients in need of mental health treatment.
I am also a certified case manager and today work for Wausau
Benefits as a behavioral health nurse. As a case manager, I work
closely with patients and treatment providers to promote optimal
quality of care while at the same time managing the patients'
particular psychiatric needs and helping them to wisely use the
resources available to them.
One of the primary resources is their health plan. Therefore,
public policy that encourages health plan sponsors to continue offering
mental health coverage for those who truly need it is vital. There are
limits to health benefit plan funds and so choices have to be made.
Unreasonable new federal mandates would put these already limited
health plan funds at risk.
Employer plan sponsors must choose what coverage to offer or
indeed, whether to offer coverage at all. Mandates that prescribe how
plan sponsors must provide for mental health coverage and hence how
much they must spend, create an incentive for employers to not offer
the coverage. I know this is the opposite result of what Congress is
trying to achieve. It is also very much at odds with what employer
sponsors do voluntarily today.
The vast majority of the plans Wausau Benefits administers provide
coverage for mental health benefits. The particular benefits vary
widely. Typically inpatient and outpatient services for both
psychiatric and chemical dependency are covered as are the prescription
drugs needed to treat these conditions.
Wausau Benefits provides employee benefit plan administrative
services for 434 employer groups ranging in size from 200 employees to
large, national accounts which may include several thousand employees.
The company's Claim Services Operation processes more than nine million
claims per year for over two million benefit plan members. We do
business with two-thirds of the health care providers in the United
States.
behavioral health management
I have experience working in acute hospital settings, eating
disorder units, chemical dependency/substance support units, and
community support programs. Given my clinical experience, I have
concluded that while every situation is unique, there are appropriate
levels of care that will achieve desired results. That is where case
management can be very effective. Levels of care can be high-cost (most
restrictive) or low-cost (least restrictive). Most patients prefer the
least restrictive treatment setting if at all possible, which is
consistent with both case management and quality of care objectives.
In my role as a nurse case manager, my number one job is to be an
advocate for the patient. Case management empowers the patient to get
to an independent state through education, assistance in accessing
treatment options, and developing support systems. People need support
and enough information about their illness to be able to make informed
decisions. To those ends, nurse case managers communicate directly with
the patients' attending physician to address the specific psychiatric
needs of that patient.
When a third party payer is involved, experience suggests that
money is spent differently than it would be spent if it were coming out
of a family budget. On their own nickel, patients tend to be more
selective about the level and kind of treatment sought. For some
disorders, there are good alternative treatments that will provide the
same quality of care as the more expensive clinical settings but at a
fraction of the cost.
Furthermore, if all DSM conditions were to be eligible for
coverage, there will inevitably be services to spend the money on,
whether or not an actual clinical need for such services is proven or
effective. It is critical that plans be able to continue using
behavioral health management techniques and criteria so mental health
dollars are wisely spent.
comments on pending mental health parity proposals
Wausau Benefits has three concerns with HR 4066. First, the bill
attempts to extend the concept of parity to all illnesses defined in
the DSM IV-TR, a policy decision we questioned in our appearance before
the Education & Workforce Committee in March and repeat again today.
Secondly, HR 4066, in its rules of construction, purports to allow
plans flexiblility in the way they manage mental illness cases, but in
fact forces plans to use management tools for mental health cases only
if they are designed and applied exactly as they are in medical-
surgical cases. We argue that this formula calls into questions whether
plans can manage serious mental illnesses differently from the way they
manage less serious behavioral problems and leaves open to court
interpretation whether a plan's use of management tools for mental
health cases differs enough from its management of medical/surgical
cases to be considered violative of HR 4066. Finally, Wausau Benefits
questions the overeliance of HR 4066 on medical necessity as the only
screen for inappropriate or even harmful treatment of mental health
cases.
To highlight the problem presented by the overly broad scope of HR
4066, let me cite a few real cases Wausau Benefits has faced as an
administrator of benefits for large companies across the country in
recent years.
<bullet> A college age student was kicked out of school for drinking
alcohol. His parents would not allow him to come home and
instead put him in a 24-hour treatment facility at a cost of
anywhere from $300 to $1650 a day. The patient could have been
safely and effectively treated in an outpatient setting, but
since there was nowhere for the patient to live, the facility
would not discharge him.
<bullet> A 16-year old girl was diagnosed as an oppositional deviant.
She was often truant from school, impulsive, did not follow
rules at home and caused chaos in the family. The parents
requested inpatient treatment for 9 to 12 months at a cost of
approximately $300 per day.
<bullet> A parent insisted that a 13-year old child needed 12 months of
intensive inpatient treatment and would not consider anything
less. The cost was approximately $300 per day. The parent
wanted the child out of the home. Not following rules at home
and failing to complete homework were the symptoms used to
justify confinement.
<bullet> A request was received for a 4-year old to be admitted to an
acute psychiatric inpatient facility because he had been
expelled from four different day care facilities due to
``agressive behaviors'' including hitting other children. His
single mother had recently begun a career as an attorney was
was unable to stay home with the child. She successfully
persuaded the doctor to agree to admit the child into an
inpatient care setting at roughly $1600 per day.
Reading these cases, it is easy to focus on the high dollar costs
which are associated with aggressive inpatient courses of treatment,
but it is just as important to focus on the question of whether the
treatment chosen is effective or possibly even harmful to the
individuals involved. Wausau Benefits attempts to work as often as it
can with physicians and patients to take full advantage of community
health services and other sound alternatives to inpatient care.
Application of HR 4066 to all illnesses listed in the DSM-IV, a large
percentage of which have just been officially added to the list in the
last two years, will not only waste precious health care dollars, but
also facilitate the inappropriate treatment of some younger Americans.
Regarding the HR 4066 requirement that management tool design and
use not vary between mental health cases and medical/surgical cases, I
want to point out that health plans differentiate between the kinds of
treatment and financial limits they impose on different types of cases
within the medical/surgical field. There are financial and treatment
limitations on in-patient stays, annual limits on various preventive
health exams, durational limits on physical therapy--all presumably
designed around the general concept there are limits to the therapeutic
benefit of these services. Following this logic, it is reasonable to
ask why plans should not be able to establish different treatment
limits or financial requirements on different types of mental illness
benefits. For example, Wausau Benefits would recommend that plans be
allowed much more flexibility with regard to cases not involving
biological-based illnesses. Unfortunately, the language of HR 4066
raises major questions about a plan's ability to treat different mental
health matters differently. Since medical/surgical limits and
requirements do differ, it is also difficult under HR 4066 do determine
whether the general parity rule has been violated by a particular limit
on mental health treatment. This situation invites litigation which is
unacceptable in today's cost-constrained environment and will be even
more so once a Patient Bill of Rights is approved.
Since plans are effectively prevented by HR 4066 from establishing
defensible treatment limits or financial requirements and from
effectively managing mental health benefits, the only method of
screening appropriate treatment and payment allowed by the bill would
be a ``medical necessity'' screen. As a clinical professional, I can
assure members of the panel that using medical necessity as a last
resort screening methodology for many of the less serious mental health
illnesses is like not managing the benefit at all. Many cases in the
behavioral health area are based on self-reported symptoms which, by
themselves, do not justify clinical intervention. Another problem is
the lack of proven courses of treatment for recently identified
behavioral health problems. I do not believe Congress wants employers
or TPA's to turn a blind eye to the kinds of cases I highlighted
earlier in my testimony. I recommend that plans be allowed to retain
control over their payment policies with regard to questionable
requests for treatment without having to risk violating the law or
consider eliminating mental health benefits for their employees.
behavioral versus biological and federal policy--additional discussion
Finding just the right policy answer is a complex task, yet the
desired outcome is simple. There is a clear need for mental health
resources to be carefully allocated to the right cases and treatment
options.
As stated earlier, HR 4066 would require parity to be applied to
all mental health conditions listed in the American Psychiatric
Association's Diagnostic Statistical Manual. Federally mandated
application of coverage for all conditions listed in the DSM-IV is not
the right prescription for effective allocation and delivery of mental
health benefits. A clear distinction needs to be drawn between
biologically based mental illness and other conditions listed in the
DSM-IV.
Conditions that are biologically based, or where there is a bio-
chemical imbalance with identifiable symptoms and significant
functional impairment clearly require treatment. It is precisely these
kinds of conditions for which health plans earmark the bulk of their
mental health dollars.
Serious mental health illnesses like major depression can affect
anyone. These illnesses are treatable. Referral to a mental health
specialist for evaluation and treatment is key to recovery. However,
people don't always seek services because they don't recognize the
symptoms, they have trouble asking for help, fear the stigma sometimes
associated with mental health conditions or blame themselves for the
state they're in. And, often, people don't know what treatments are
available. While benefits and patient advocacy are clearly critical,
the private market response has fulfilled patient needs.
Biologically based conditions are generally more objectively
defined and measurable, and more importantly, they respond to known
treatment options. On the other hand, treatments for conditions that
are not biologically based have few if any objective criteria to
determine what treatment is necessary or when treatment has been
successful
I often refer to these people as the ``unhappy well.'' People
facing non-biologically-based problems may seek treatment because they
feel it will help them in some way and that certainly is their right,
but an intervention is not likely to improve their situation as life
events will continue to occur. In other words, it can be difficult to
determine when treatment should conclude or whether or not it is
successful. In these scenarios, an unspecified sum of money can be
spent on treatment that produces little or no tangible improvement.
Conditions listed in the DSM-IV include such things as unhappiness
in their job (V62.2), a chaotic home life (V62.89), or difficult
personal relationships (V61.20), none of which stem from chemical
imbalances, but rather from life choices/stressors that we all have.
Remember, the vast majority of employers do cover mental illness.
However, plans generally do not cover mental health conditions that do
not cause significant functional impairment. Such impairments include
learning disorders (315.9), pathological gambling (312.31), bereavement
(V62.82), communication disorders (307.9), spirituality (V62.89),
sexual and gender identity disorders (302.6;302.9), conduct disorders
(312.8) and jet lag (307.45). When people are able to function in
activities of daily life, yet have a condition that is ``diagnosable,''
the treatment sought should be considered optional or elective rather
than necessary even though treatment could potentially increase quality
of life. Utilizing high cost treatments for low-impact conditions is
not a wise use of limited health plan dollars.
conclusion
In summary, I believe that case management works. Mandating parity
treatment of the entire DSM-IV is not the answer. Federal mental health
policy must be crafted in such a way that people who need mental health
treatment get it.
Federally mental health policy must not put funding sources at
risk, otherwise people will not be as likely to seek care when they
need it. When people suffering from serious mental illness receive care
when they need it, everybody wins. The employees get their lives back.
The employer gets their employees back. No one faces financial
devastation.
Mr. Bilirakis. Thank you very much.
Ms. Nystul, let us see. In the case of the college-age
student, the cost of $300 to $1,650 a day, the facility would
not discharge him because there was nowhere for the patient to
live, was that benefit paid?
Ms. Nystul. That benefit, as far as I know, was paid.
Mr. Bilirakis. It was paid. In the case of the 4-year old,
where the mother was unable to stay home with the child,
persuaded the doctor to admit the child into an in-patient care
setting at roughly $1,600 per day, was that paid?
Ms. Nystul. A few days of that admission----
Mr. Bilirakis. A few days was paid.
Ms. Nystul. [continuing] were covered.
Mr. Bilirakis. What happened after that few days?
Ms. Nystul. Then it went to independent review with an
external--with external reviewers that we have that are Board
certified psychiatrists. Because, clearly, at that point there
were no symptoms for this child to be in there, other than he
had been kicked out of every day care in his area.
Mr. Bilirakis. And there was a clear, independent review.
The psychiatrists, were they employed by the--by Wausau?
Ms. Nystul. Not employed by us, but certainly paid for
their services. Again, they are external from us.
Mr. Bilirakis. And they chose to turn down any additional
payment?
Ms. Nystul. They don't--they make a recommendation as to
whether the care meets criteria for medical necessity.
Mr. Bilirakis. And what was their recommendation?
Ms. Nystul. And in that case they felt it did not.
Mr. Bilirakis. It did not. All right.
I am going to read a very lengthy set of questions. It is
really one question broken down into various areas. It is
intended for Dr. Regier, but I would ask Dr. Cutler and Ms.
Nystul also to comment on these points.
Dr. Regier, there won't be enough time for you to respond
orally to these questions, but I want to get them in the
record, and also ask you to respond in writing as I would ask
Dr. Cutler and Ms. Nystul. And if Messrs. Hackett and Trautwein
would also like to respond to them, feel free to do so.
Let us see. Dr. Regier, your testimony states that the
controversy over whether to incorporate DSM-IV into statutory
law is a red herring. Many States, as has been testified to,
that have looked at this issue have chosen to limit any parity
requirements to biologically based or serious mental illness as
they define them. Those States do not require use of DSM-IV
criteria.
Moreover--and I am going to furnish this in writing to you
all, so you don't really have to worry about making notes on
it. Moreover, what you are asking us to do is incorporate an
800-page manual by reference into a statute. That is the manual
that I held up earlier. That would give that document legal
standing in many ways and with many consequences.
If you are asking us to take such a step, then I would want
to fully understand and resolve all the attendant
controversies. I think it will take both questions at this
hearing and many followup questions to begin to understand the
use of such a complicated document into a new legal setting.
First, I want to ask a number of questions about how you
think the reference to DSM-IV and H.R. 4066 works. In your
opinion, does the inclusion of the DSM-IV reference require
companies to use the diagnostic standards in that document as a
matter of law? And I would ask, is that your objective?
Next, in your testimony, you refer to the categories of
DSM-IV referred to as conditions for clinical focus. These
include such items as sibling relational problem, occupational
problem, academic problem, and religious or spiritual problem.
Some of these terms would apparently apply even if they are not
termed ``mental disorders'' under the manual.
Do you believe that H.R. 4066 incorporates these
conditions, even where the manual states that they are
conditions and not mental disorders?
C. Your written testimony mentions the term ``clinically
significant impairment.'' Do you believe such a term should be
directly incorporated into legislation as a filter to eliminate
less serious claims? Also, in your opinion, whose burden is it
to show that there is a clinically significant impairment?
Should it be the burden on the claimant, or on the plan
manager?
Next, could you support language that says that the
diagnosis of a disorder or its treatment must be well
established and supported by clear scientific evidence? And, of
course, I would ask, as I said before, Dr. Cutler and Ms.
Nystul to respond.
My time is up. I would just merely say that I know Mrs.
Domenici is still in the audience. The Senator--I have worked a
number of conferences, health care conferences, where the
Senator was involved. And he is--he refers to me as Doctor. I
am not sure really why. And he, of course, brought up this
point. And he has had this personal experience. Mr. Hackett has
had personal experience.
I would wager that probably every one of us, to some
degree, not to the same degree, but every one of us has had
similar--some sort of similar, or at least some sort of
experience in this area.
And I would say that if we all really want to seriously do
something about this problem, we should not be looking at it as
an either/or. I keep using this argument with my wife all the
time. She is either/or. Should we be looking at an either/or
situation? Or should we be trying to do something at least
maybe for the serious cases, if you will, or those that are
very definitely supported by some sort of scientific evidence,
that sort of thing.
And I would say--and I have already sort of mentioned this
already to Mr. Brown--if we really seriously want to do this,
not use it as an issue, but do this. I really think it is
doable, but we can't necessarily be, just stubborn and say
either my way or no way.
Having said that, I would yield to Mr. Brown.
Mr. Brown. Thank you, Dr. Bilirakis.
Dr. Regier, a question for you. In Mr. Trautwein's
testimony, he mentions what he calls an explosive estimate,
that the Congressional Budget Office stated that the bill would
cause mental health costs to increase from 30 to 70 percent,
mental health costs to increase 30 to 70 percent for affected
plans.
My understanding is that mental health costs are pretty
clearly a very small part of health care costs overall. And
that would say to me that a 30 to 70 percent increase in mental
health costs would not be a particularly big increase overall
in plans. I understand CBO's estimate of--about the bill's cost
is still--I believe, still only .9 percent. Could you elaborate
on that to make sure I understand it?
Mr. Regier. Yes, I would be happy to. Actually, Mr.
Trautwein is completely correct. It would be a 30 to 70 percent
increase. And if you realize that the current percentage of
premiums at the present time accorded to mental health and
substance abuse is somewhere between 1 and 3 percent, if you
multiply that times 30 percent or a 70 percent increase, you
get .9 percent, which is exactly what the Congressional Budget
Office, you know, estimated.
So I think there was a bit of a misleading inference in Mr.
Trautwein's statement, that this was somehow explosive. This is
no news. This is exactly the basis on which the CBO made their
estimate, and it is simple arithmetic.
Mr. Brown. So while it is narrow cost on that specific part
of it, mental health may, in fact, be explosive. The cost
overall to health care is minimal.
Mr. Regier. That is correct. And that is basically because
in the last 10 years, as the FEHBP found, mental health costs
dropped from 8 percent in 1988 to something like 2 percent of
the total mental health benefit for the Federal Employees
Health Benefit Program. And so you have this very low baseline
from which we are now operating.
So the whole field has changed from when some of the
earlier estimates of the cost of parity were made.
Mr. Brown. Okay. Thank you. I have another set of questions
for Dr. Regier and Mr. Hackett.
When Congress was considering the prescription drug
benefit, common sense told us that giving seniors a good, solid
prescription drug benefit would help keep them out of
hospitals, would help keep them from getting sicker, and that
would, in turn, decrease Medicare's total expenditures in the
perhaps peculiar way or not that the Congressional Budget
Office figures the cost of a new program. They didn't include
this type of cost savings in their estimate of the cost of the
prescription drug benefit.
Likewise, CBO's cost estimates for 4066, the legislation
Mrs. Roukema and Mr. Kennedy have introduced, doesn't factor in
savings that result from mental health parity. CBO's estimate,
while only .9 percent, doesn't include the increase in--
obviously, in productivity that Mr. Hackett talked about, lost
time, decrease in disability, all of those kinds of things.
The first question, Dr. Regier, is: is it your belief that
mental health parity would decrease health care expenditures
for other conditions and bring additional cost savings outside
the health care arena?
Mr. Regier. I think there is ample evidence that that would
occur. And, in fact, the best evidence we saw was a study that
I mentioned to you that Dr. Rosenheck at Yale University did of
a large company which showed what happened when you overly
constricted mental health benefits. They constricted them by
something like 40 percent, and what happened is there was this
hydraulic experience in which, by constricting them, they shot
up their cost of general medical primary care services, they
shot up the level of absenteeism, and they also decreased the
level of productivity in that company.
So I think there is ample evidence that with an appropriate
mental health benefit that is managed in a sense that--to make
sure that there is a medical necessity, you know, for the
care--that, in fact, this is a very efficient way of doing
business.
Mr. Brown. Okay. Mr. Hackett, briefly--my last question,
Mr. Chairman. Is the cost of mental health parity offset by
other savings in your mind?
Mr. Hackett. Very definitely. And I think, just to support
the previous estimates on your cost issues, ours were almost
exactly the same. We go from about 2.4 percent of our total
cost to 3.7, with the additional benefits.
I do think that we don't even know what is out there,
frankly. I don't know how many people in my company are
distracted from dealing with family problems that might
otherwise be treatable.
I know that the secretary right next to me told me she
almost declared personal bankruptcy, which I had no idea, about
a year ago, because of a mental health problem with her husband
that was not being treated because our policies didn't cover
it. So we don't even know how good it is going to get.
Mr. Bilirakis. If the gentleman would yield. Mr. Hackett,
did your company make available all of these benefits prior to
your personal experience?
Mr. Hackett. We actually had made the decision to do that
prior to our----
Mr. Bilirakis. Prior.
Mr. Hackett. [continuing] experience with this in terms of
the frustrations, but it clearly provided extra impetus to feel
good about it.
Mr. Bilirakis. That is commendable.
Dr. Norwood?
Mr. Norwood. Thank you very much, Mr. Chairman. I would
like to start by saying that my tendency here is to agree with
your comments that there is somewhere in the middle, if we are
actually going to change the law. And right now both sides are
out as far as they can with their views.
And if no one is willing to yield in any way, then we are
not going to be able to improve mental health to the degree
that some of you want, and maybe a lesser degree than others of
you want.
I am--this is an interesting hearing to me, because it
reeks of patient protections. It reeks of HMO reform, and it
goes right back to where the basic systematic problem is in our
system of health care today, where sometimes we have an
external review and sometimes we don't. And it is a system that
one side wants everything and the other side wants to pay for
nothing.
And there needs to be somewhere in the middle there, and
the only way to get into that middle, I believe, is to have the
Federal Government set some standards that are reasonable in
health care insurance. And in today's hearing, it is about
mental health and the standards that should occur there. And
one side is trying to get standards into this debate, and the
other side is doing everything it can to make sure that no one
is in charge of that but them, so that they can manage the cost
according to their bottom line, not necessarily according to
the needs of our patients.
Dr. Cutter, can you give me some idea what you think the
cost today in the health care system is for mental health? Do
you have some percentage in mind, any of you? Is 5 percent of
total health care spending somewhere in the neighborhood right?
Mr. Cutler. I don't have a current percentage, Dr. Norwood,
but I would be happy to get that for you.
Mr. Norwood. Well, do any of you know? Or am I right to
think--yes, sir?
Mr. Regier. It is actually less than 5 percent in most
cases. It is, as I mentioned before, somewhere in the
neighborhood of often 1 to 3 percent of the benefit. In some of
the better plans it will go up to 4 percent, but there are
actually fairly few that are up to 5 percent.
Mr. Norwood. So, on average, let us say for the sake of
discussion, 3 percent. Yet Dr. Cutler tells me the insurance
coverage in the Nation today is about 96 percent of mental
health coverage; 96 percent of plans cover mental health.
Now that says to me one or two things. It says to me that
there are not near as many people having problems with mental
health as we think, or either you may be covering it but not
very well. And that needs to be--that is what this is all about
is, are you covering it very well?
To say to us 96 percent of the plans have mental health
coverage means totally nothing in my viewpoint. It just means
some--either people aren't sick or you aren't covering it very
well, or you are managing the costs so that you don't really
spend any money on the mental health coverage.
You pointed out, Dr. Cutler, that the DSM was troubling to
you, that we should codify that into law. And you pointed out,
further, that your problem with that was that these were
independent people setting up protocols that you then would
have to follow because we have put it into law. Am I stating
that correctly?
Mr. Cutler. Dr. Norwood, I think I said something slightly
different. First of all, with regard to the point about cost,
obviously there is a spectrum of costs within health plans
based on the kind of benefit package that an employer has
purchased. So as Mr. Hackett knows, he purchased a benefit
packet previously with a lower level of benefits. He has now
decided to increase those benefits, so those costs have gone
up.
So the cost, when you asked, what is the number for health
plans, will vary based on the benefits that an employer has
decided to purchase.
Mr. Norwood. And what you decide to cover of what they have
decided to purchase.
Mr. Cutler. Well, we cover what employers decide to
purchase.
Mr. Norwood. No, no, you don't. Come on. We have been doing
this too long. Now, that is not right. You determine what is
medically necessary, and you cover that, which is why we have
an external review from time to time to tell you you are wrong,
you didn't cover that. And it is not new news that managed
care's job is to manage costs. So you don't cover everything
that is medically necessary, that you call a benefit. And I
didn't mean to interrupt you, but I couldn't help it.
Go back to the--get me on the protocol----
Mr. Cutler. The DSM----
Mr. Norwood. [continuing] what is your problem with the
protocol?
Mr. Cutler. Our issue with the DSM is not that it is
developed by someone who is independent. Our issue with the DSM
is that, first of all, it was never designed to be used as a
catalog for payment. It was designed to be a catalog of mental
diagnoses that could be used in a consistent way for a variety
of other purposes, such as research, education, and so on. It
was never designed for payment.
As Dr. Regier pointed out, there are already diagnoses or
categories in the DSM about which there is controversy whether
they are even mental conditions or not. So to mandate payment
using that book, in our mind, is inappropriate.
There is no other similar book which is developed by other
organizations, and the examples, as you know, would be the CPT,
which the AMA develops, or the ICD-9 classification, where all
of the entities in those compendia are mandated for coverage.
Health plans don't cover every diagnosis in the ICD-9 code
book, and don't cover every procedure in the CPT code book.
And the last point is, obviously, there is a built-in
conflict of interest, because the DSM is a book which is
developed by the people who would be paid for the services, so
that one of the considerations going forward is, should they
include items in the DSM in order to be paid for it.
Mr. Norwood. Well, I know my time is up. Could I have just
30 seconds, Mr. Chairman, to----
Mr. Bilirakis. Without objection, 30 seconds.
Mr. Norwood. The problem here is somebody develops your
protocols. I don't know who that is, but someone sets those
protocols, and they are, in effect, mandated by law under
ERISA. Now, I think perhaps this DSM is something that wasn't
set up for payment but might be very helpful in case you didn't
get your protocols right, because it was developed by
professionals in mental health.
I am not sure where your protocols come from, and don't
forget about this. I will be back in a minute, Mr. Chairman.
Mr. Bilirakis. Mr. Green to inquire.
Mr. Green. Thank you, Mr. Chairman. In follow up to my
colleague from Georgia, I can see the concern of some of our
opposition on the fear of treatment for procedures that may not
work.
I think it was just last week--I don't know if Mr. Regier
mentioned it--but how successful arthroscopic surgery has been
in treating patients, and yet it has been on the protocols for
a number of years. And so even in the physical side of
medicine, there is no guarantees.
Mr. Chairman, members, I think this is--I served 20 years
in the Texas legislature, and it seemed like coming to
Washington--it is interesting because so often in the States--
States have to mandate benefits for coverage. And over the
years that has been the complaint of the insurance industry. We
have these laundry lists of mandated benefits that individual
States do, so they come under Federal law, under ERISA, so they
don't have to have these mandated benefits.
Times do change. My first term in the Texas legislature in
1973--the first mandated benefit I voted for was for insurance
companies to carry newborn children on the insurance policies.
It was not covered until after the legislature mandated
benefits for newborns to be covered by group insurance.
Now, maybe if the insurance companies realize it, it will
either be done by you working the system or the legislature,
whether it is local, in our States, or on the Federal level, to
provide this needed coverage. Again, in 1973, it was mandated
benefits for newborns, which today is outrageous that it wasn't
covered.
But maybe 20 years from now we will say, ``I can't believe
we didn't have really mandated benefits for mental health
coverage, because there are so many illnesses that can be
treated as well as physical.''
Mr. Hackett, many opponents of the parity have trivialized
mental disorders and have suggested that only the most severe
so-called biologically based mental illnesses merit our
concern. And I gather from your daughter's illness, and due to
trauma, it might not be deemed biologically based. And would
you help us understand, in light of your daughter's symptoms,
that a mental disorder can be very severe even if it is not
biologically based?
Mr. Hackett. Well, I think it is a very good question. If
you had seen my daughter roll up into a ball and have her eyes
roll backwards and start hyperventilating and have to go to
emergency rooms, and lose her speech for 2 days at a time, you
would be convinced that your mind controls a lot
physiologically. And this was not a biological disorder; this
was induced by the violent offense of a man.
And I just assure you that there are conditions you can't
imagine that are out there that have nothing to do with serious
biological disorders.
Mr. Green. And I think all of us on our committee want to
congratulate you and thank you for your courage and your
family's courage in willing to come forward, because so often,
as you know, these illnesses are not something people want to
talk about. But unless we talk about them, the policies will
not change.
And so I thank you for that, and it is interesting when I
go to my physical doctor and say I have a pain here, it may not
be biological. He typically talks to me and observes my
behavior, which is what a psychiatrist will do when they are
doing the analysis of you for some type of mental illness. It
is not always biological.
One of our frustrations--a sad experience we have with our
Mental Health Parity Act of 1996--is that we in Congress left
lots of loopholes in the law that insurers have exploited their
enormous barriers to mental health care. The essence of your
testimony, I understand, is not simply we should pass any other
legislation and call it parity, but we should truly end
insurance discrimination against people with mental disorders.
Is that what you are asking us today, and not just pass
something that says parity but may leave lots of loopholes?
Mr. Hackett. Yes, sir. Because that is where we are today.
We have a lot of loopholes.
Mr. Green. Okay. Thank you.
Let me--one quick question, Dr. Regier. In Ms. Nystul's
testimony, she mentioned a number of instances where patients
requested a very expensive and not always appropriate course of
treatment for their mental illness, and one case where a
patient successfully persuaded the doctor to agree to admit the
child in an in-patient setting at $1,600 a day.
Are physicians normally swayed to make medically
inappropriate or unnecessary diagnoses for treatments? Is it
the role of physicians--again, with your experience as a
psychiatrist, or even your knowledge of your--the physical
side, are doctors really influenced, whether you are a
psychiatrist or a neurosurgeon because--if a patient comes in
and says, ``I want something''?
Mr. Regier. I think in this particular case, obviously, a
physician was influenced. But I think what happens is that the
checks and balances in the system work. And there is nothing in
this bill that would preclude the type of management that
worked in the system--in the particular examples that you
provided.
Mr. Green. Again, I understand that even under current law
physicians, physical physicians for lack of a better term, can
make medically inappropriate or unnecessary diagnoses or
treatments. And that is not just limited to psychologists--or
psychiatrists--excuse me.
Mr. Regier. That is absolutely correct. And there probably
will be a lot of questions about arthroscopic surgery in the
near future, because of changes in medical technology and
medical knowledge.
Mr. Green. Thank you, Mr. Chairman.
Mr. Bilirakis. Let us see who--Mr. Greenwood.
Mr. Greenwood. Thank you, Mr. Chairman.
Mr. Cutler, I am sorry that I wasn't here for your
testimony. But I have been reading it, and you have a section
you label ``Concerns with Pending Legislation.'' And you say,
``In light of the progress we have made in expanding access to
mental health services, and the current environment of rising
health care costs, it is important to seriously consider the
substantive concerns we have with H.R. 4066.''
But your bottom line seems to be in your conclusion, in
which you say, ``However, we respectfully oppose doing so''--
that is, expanding access to mental health services--``through
mandates.'' So would I be correct in assuming that your
association's position is that you don't want any more mental
health mandates from Congress at all?
Mr. Cutler. Well, Mr. Greenwood, my first reference was to
activities health plans have in place which have actively----
Mr. Greenwood. I understand all of that, but it just--I
have very limited time, so just get right to my answer if you
would. The question is: does your association oppose any
Congressional mandates with regard to coverage of health care
benefit--mental health benefits?
Mr. Cutler. In general, we feel that these kinds of
questions can best be worked out in the market between----
Mr. Greenwood. Very well. That gets me to my question.
Because I prefer--I am Republican. I prefer to see the
marketplace work in as many instances as possible. The
difficulty that I have is if Mr. Hackett's daughter--if Mr.
Hackett worked for a company that had a health plan, he would,
as a consumer trying to impact the marketplace--first off, he
has very little input into making the market work for him,
because he may have the--be able to say to his employer, ``I
want to make sure I have a health plan. I want to work
somewhere where there is health coverage.''
But nobody walks in in a job interview and says, ``Before I
decide whether I want this job, could you explain to me the
depth of your mental health coverage.'' And if that is not deep
enough, walks away and says, ``I will have to go find another
job.''
And no one--even if someone said, you know, ``I want to
work someplace that covers mental health benefits,'' probably
that would harm his chances of getting the job to begin with.
But nobody is going to anticipate the kind of horrific event
that happened to Mr. Hackett's daughter.
So how does the market work? How do people--how do
consumers impact the market and demand that their employers
provide something that they never in their wildest imaginations
would anticipate occurring to them? I mean, you could look--
even if you were savvy enough to say, ``I want to make sure I
have mental health coverage that covers all my family,'' to get
to the point where you realize, oh, this is not covering--this
is only covering biologically derived syndromes, and not
environmentally derived syndromes, who demands that? How does
the marketplace work in that regard?
Mr. Cutler. Well, if I could expand a little bit about
mandates, I think there are some alternative approaches. One is
to have a mandate review panel which would evaluate both the
economic and quality consequences of any mandate. So that is
one alternative approach. With regard to the market, I would
say----
Mr. Greenwood. Is that one that you would support in--what
I am trying to get at here is I think you are probably right
that the DSM, as a payment mechanism, is a little extreme,
because it--as my memo here says, it includes things like jet
lag and chaotic family life, and so forth, and it would be--if
you covered everything in there, it may be cost prohibitive.
But the other extreme of severe and biologically derived
also seems to be--seems, in fact, to be an extreme position. So
will your association support a mandate that lies somewhere in
between?
Mr. Cutler. We are always happy to talk about alternatives
that lie in between, yes.
Mr. Greenwood. Talk is cheap.
Mr. Cutler. Well, of course, the devil is in the details,
and it depends on----
Mr. Greenwood. If you rule out being able to support a
mandate that we can work on that is cost effective and not
overly burdensome and manageable, do you rule that out?
Mr. Cutler. If all of those constraints are met, no, I
wouldn't rule that out.
Mr. Greenwood. Very good. That is good to hear.
I yield back, Mr. Chairman.
Oh, actually, if I have got 30 seconds, I wanted to ask Mr.
Hackett a question. You said in your testimony that it was
not--that providing this coverage not only made moral sense but
it made economic sense. Did you share with the committee--and
if you have it--what this additional coverage costs you as an
employer, and how it makes economic sense to do that?
Mr. Hackett. I did. We estimate it will cost us another 1.3
percent of our medical costs in total.
Mr. Greenwood. Thank you.
Mr. Bilirakis. Thank you. Ms. Capps to inquire.
Ms. Capps. Thank you, Mr. Chairman. I want to thank you,
all the panelists, for your expert testimony, and Mr. Hackett
particularly for your courage, both in your personal story but
also in the stake and stand that you have taken with your
company. And you stand as a beacon, I think, for how we should
proceed, even in this place.
As you know, employers are not required to provide health
insurance coverage to their employees. They choose to if they
want to attract good employees and take good care of the people
who work for them. We heard from the National Association of
Manufacturers who believe that since an employer's decision to
provide health coverage is voluntary, the decision to provide
mental health parity should be voluntary, which doesn't do much
for the word ``parity.''
Do you have problems with this approach, and would you
elaborate as to your personal experience with it?
Mr. Trautwein. Certainly.
Ms. Capps. Actually, I wanted to have Mr. Hackett talk
about whether or not he believes what you said would follow,
whether--I am sorry if I wasn't clear I have been directing it
to you, Mr. Hackett. You have offered it, and so you have
overcome this hurdle of the voluntary aspect of it.
Do you think it should be parity--in other words, if an
employer chooses to cover health care, it should be both
equally?
Mr. Hackett. Very much so. And I----
Ms. Capps. And why?
Mr. Hackett. The issues of economics about insurance
coverage in general are ones that ought to remain in a
different forum than I can address, because I don't know enough
about the circumstances. But where companies can afford health
insurance, I just don't see the difference. It escapes me. It
escapes me why physiological disorders of one kind are treated
differently than physiological disorders of another kind. It is
that simple.
Ms. Capps. Okay. And the unfair benefit limitations on
people who need treatment for mental illness, you would say it
all falls in the same category. And so if you are going to have
parity, you are going to have parity.
Mr. Hackett. I do. But recognize, you know, I am--like all
of us, we are human. I came upon this revelation approximately
a year and a half ago. That is where we are at in society, and
it is very directly related to Congressman Greenwood's
comments, is that what do we really know about what we need to
ask? Who is going to demand the service and the risk of telling
their employer they have mental issues in their family?
The stigma, the inability to quantify what the cost will
be, the inability to express it in a meaningful fashion is so
imponderable for most of us that--you know, I sit at the top of
a company. I didn't have a clue what our mental health benefits
were. Not a clue.
Ms. Capps. Right. And so the stigma that exists in the
society as a whole is compounded by the kind of layering on of
that stigma that we give by the unequal treatment within health
care coverage.
Mr. Hackett. Absolutely.
Ms. Capps. And maybe that leads, then, to Dr. Regier, if
you--if you could--you mentioned in your testimony that the
lack of requirement for employers to provide mental health
parity can cause an adverse selection problem in the insurance
market. This was hinted at, and I think you might have a
different take on this.
Mr. Regier. Yes. The thing that happens with insurance is
that they make money by insuring the healthiest populations.
Ms. Capps. Right.
Mr. Regier. And in order to do that, you can offer a very
poor mental health benefit, which, by definition, is going to
repel people who might need that benefit.
Ms. Capps. Right.
Mr. Regier. This was a similar kind of situation that
occurred with HIPA. Insurance companies were able to make money
by not insuring people who had previous existing health
conditions. And it was very obvious, certainly, to Mr.
Trautwein's constituents, that they had to part company with
Mr. Cutler's--or Dr. Cutler's constituents on the HIPA issue,
because that was a mandate that people recognized that in order
to have employees move from one company to another they
couldn't move if their new company would not insure them
because they had a preexisting health condition.
And, likewise, if you have a good mental health benefit in
your company, you are stuck there if you have a mental health--
or if your children have a mental health condition that
requires treatment. So it is distorting the market. And, in
fact, what happens--and this is the point that Dr. Frank made
in his New England Journal article, that this is really an
anticompetitive issue. It makes the market very inefficient.
So we all would prefer to have the marketplace work if
there is--if there are the conditions that make that possible.
Otherwise, some type of regulation is necessary to make it
work.
Ms. Capps. So this hearing we are having today really does
revert back to the HIPA debate.
Mr. Regier. Very close. Absolutely.
Ms. Capps. Thank you. I yield back the balance of my time.
Mr. Bilirakis. Maybe you might yield that additional few
seconds to me, if you would.
Ms. Capps. Please.
Mr. Bilirakis. Mr. Hackett, the bill at question refers to
all categories of mental health conditions listed in the now
famous DSM-IV that we have been talking about all along, or the
more recent edition, etcetera, and it goes on to some
qualifiers there.
Would the plan that your company has include all categories
included in this book? Do you know?
Mr. Hackett. It does include that in what we rely on. And I
think businesses can rely on, with the properly crafted
legislation, is the fact that we can still have managed
programs within that overall umbrella where medical necessity
becomes the real key. And I think Congressman Strickland or
Brown mentioned that earlier--is we can't assume that just
because it is described that that is actually impacting what
you actually treat.
Mr. Bilirakis. Well, that is the qualifier----
Mr. Hackett. It has to be diagnosed or----
Mr. Bilirakis. [continuing] that is the qualifier that is
in the statute.
Mr. Hackett. Right. And so I think the statute is properly
drafted from my vantage point. I don't scrub through these
things in the normal course of business in great detail. But
our sense is that we are comfortable with the legislation
crafted.
Mr. Bilirakis. All right. Thank you.
Let us see, Mr.--I have got to go to the committee, Marge,
but I will give you an opportunity. Mr. Shadegg?
Mr. Shadegg. Thank you, Mr. Chairman, and thank you for
holding this hearing. I want to follow up with where Mr.
Greenwood left off. I would suggest that the line of
questioning he posed goes beyond this issue of mental health.
And, Dr. Cutler, I would like to ask you and Mr. Trautwein
to kind of follow with me here. I think that Mr. Greenwood did
a good job of pointing out that the average person going to
work does not have any bargaining power to say to their
employer that on the day of hire that they want mental health
coverage or that they want certain types of coverage to be
included.
And he explained in his questioning that he was interested
in a marketplace working, and I think, Dr. Cutler, you
indicated that you would prefer that the marketplace function
to fill this void and that if there was a demand for mental
health coverage that is how we would solve this problem. Is
that correct?
Mr. Cutler. Yes.
Mr. Shadegg. And I take it, Mr. Trautwein, you would agree
with that.
Mr. Trautwein. Yes, I would.
Mr. Shadegg. I guess I want to point out that I don't
believe--and I challenge you on this point--that there is a
market in health care right now. The reality is that people
going to buy health care today don't have a chance to buy
health care.
What they do is they get their health care through their
employer because that is the only option the Tax Code gives
you. And some of us--Dr. Norwood and I--2 years ago worked on
this issue and said, ``We really need a market for health care.
We need to put people in a position where they have some
choice.''
I would argue right now that because health care insurance
is provided by your employer, you have no choice in health care
whether it is mental health coverage or whether it is physical
health coverage. If you go to work for a small employer, you
get one plan. You are stuck with it. If it abuses you, as Dr.
Norwood and I were concerned about when we were working on
patient's rights legislation, you can't fire that plan because
you didn't hire it.
If it doesn't treat you, you can't retaliate against it.
And, unfortunately, under ERISA, if it injures you, you can't
sue it and hold it accountable. I would like to ask the two of
you--because I tend to agree with you. I think the market is
the right place to solve this.
But when we proposed a solution, what we proposed was that
businesses should be required to tell their employees that they
would give their employee the amount of money they are
currently spending on that employee's health care insurance and
let the employee go buy the plan they wanted.
And that would enable those employees to go out and buy a
plan that, for example, included mental health coverage. And
yet I know that the American Association of Health Plans
opposed that at the time. I think National Association of
Manufacturers I met with in Los Angeles at the time--and I
guess I see a dilemma here.
If you don't want mandated mental health care coverage--and
I don't, I think benefit mandates have done great damage to the
insurance industry--then are you willing to accept as an
alternative freedom, so that employees of a business could go
out and buy a policy that met their needs, including mental
health coverage? Would you address that, Dr. Cutler?
Mr. Cutler. Well, there is a market in the sense that
employers make individual decisions about----
Mr. Shadegg. Yes. Employers get to make the decision; I
understand that. But I am talking about me as an employee. I
have no choice.
Mr. Cutler. And employers do, certainly, listen to their
employees. We work with employers all the time, and the
employers switch health plans or----
Mr. Shadegg. Can you answer my question? Are you willing to
at least look at the issue of allowing employees some degree of
freedom to pick a plan that meets their needs, so long as it is
not at an additional cost to the employer?
Mr. Cutler. We are always willing to look at issues.
Mr. Shadegg. Okay. Mr. Trautwein?
Mr. Trautwein. Congressman, the issue always is, where is
the most affordable coverage?
Mr. Shadegg. Right.
Mr. Trautwein. Can we afford to offer coverage? Can our
workers afford to accept the coverage we offer? If there was a
chance that you could maintain affordable coverage not only for
the workers who want to stay inside the employer pool, but also
the workers who want to opt out of that employer pool, then it
would be worth looking at. But I think there are challenges in
looking at that kind of opt-out scenario.
Mr. Shadegg. I don't think there is any doubt that there
are challenges. But, for example, you as--your members, members
of NAM, don't offer as a condition of employment homeowner's
insurance or auto insurance, do they?
Mr. Trautwein. That is correct.
Mr. Shadegg. You let people go out and buy their own
homeowner's insurance and their own auto insurance?
Mr. Trautwein. That is correct.
Mr. Shadegg. But in health care insurance, I think largely
because of the Tax Code, you offer them health care coverage.
Mr. Trautwein. Yes, sir. Ninety-seven percent of our
members offer coverage.
Mr. Shadegg. Offer health care coverage. Well, I applaud
you for doing that, but I think it is important to understand
the trap we are putting people in. Mr. Hackett, you tell a
compelling story, and I am glad you are here as an advocate,
and I certainly think that you are right. The devastation that
can be caused by mental illness or by the kind of thing that
happened to your daughter is incredible, and isn't often
anticipated by us.
I guess my question of you is, you are in a lucky position
because you were the CEO of the company. But I guess my
question of you is: do you recognize that your employees who
don't get to pick the health care plan that they want to use
are not in as good a position, and that an alternative which at
least gave them the choice of buying a plan with the coverage
that they wanted would put them, say, in the same position you
were able to be in as chairman of the company?
Mr. Hackett. I think it is a very good point, and I don't
know the ramifications of what you are speaking to. But I think
it is an interesting thing to analyze.
Mr. Shadegg. Well, we have many challenges in health care.
There is no doubt about it. And getting from the system we have
right now to a system where individuals at least had choice--
and I would agree with Mr. Trautwein.
Many employees may stay with their employer's plan, but
giving them that choice would at least not have them be trapped
in what I see the current system, where they can't pick their
health plan because their employer picks it, they can't pick
their doctor, they can't fire their health plan when it abuses
them, and, unfortunately, under ERISA, as Dr. Norwood and I
have worked on, they can't even hold it accountable when it
abuses them.
So with that, I yield back the balance of my time.
Mr. Bilirakis. That always strikes me as funny. ``I yield
back the balance of my time'' when it has already expired.
Let us see. Mr. Strickland.
Mr. Strickland. Thank you, Mr. Chairman. Mr. Chairman, you
urged us not to be stubborn, but the fact is I look out there
and I see Mrs. Domenici, and I see Representative Roukema over
there, individuals who have worked for years to achieve parity.
I think we must be stubborn.
We are on the verge of achieving a victory for the American
people. We have the President saying this is the right thing to
do, and I believe the opponents of true parity are going to try
to get something that is called parity but is so weakened that
it is not going to provide the kind of coverage that the
American people deserve.
Dr. Cutler, has your association ever supported any kind of
mandate for any purpose?
Mr. Cutler. Yes, we have supported mandates for external
review.
Mr. Strickland. For external review. Have you ever
supported a mandate for the coverage of an illness, physical--
any kind of medical condition that would--that you or your
plans would be required to cover?
Mr. Cutler. Not that I know of.
Mr. Strickland. So is it fair to say that you are opposed
to mandates?
Mr. Cutler. As I said to the previous question, in general,
we----
Mr. Strickland. You are willing to talk about it. I have a
question here. You say in your testimony that 96 percent of
plans reported covering mental health substance abuse services,
and I want to get to Dr. Norwood's earlier interaction with
you.
My question to you is: how many of that 96 percent offer
parity, in terms of co-payments, deductibles, coinsurance,
limitations on the frequency of treatment, number of visits,
days covered, and the like?
Mr. Cutler. I am sure there is a range across all of the
health plans. We didn't ask that question specifically, and----
Mr. Strickland. Don't you think that is a relevant question
to ask if you are going to come here and tell us that 96
percent of the plans offer coverage? Because, as Dr. Norwood
said, and as you said, sir, the devil is in the details. And
unless we know those things, we have no idea if there is any
true parity being offered out there at all. Isn't that true?
Mr. Cutler. It is true that what we know is there is a lot
of diversity among health plans today.
Mr. Strickland. For those of you who have problems with the
DSM-III or DSM-IV being used--you can tell how long it has been
since I have been in a treatment situation. I just want to
share some information here. Those who are, I believe,
misrepresenting the DSM are confusing the diagnosis of mental
disorders with every health plan's right to determine what
treatments are medically necessary according to their own
criteria. That is explicitly protected in the bill.
The bills require for services under a DSM listed mental
condition only--only when that service is included as a part of
an authorized treatment plan, when that plan is in accord with
standard protocols, when the service meet the plan or the
insurer's medically necessary criteria, and the services meet
such managed care practices as the plan employs.
Concurrent and retrospective utilization review is there.
Utilization management practices are possible.
Preauthorization--the application of medical necessity, the
appropriateness criteria. It is all there.
So when you use these--what I think are strawmen arguments
about jet lag, I think it is just simply disingenuous. And I
just wanted to share that.
Ms. Nexler----
Ms. Nystul. Nystul.
Mr. Strickland. --Nystul, you are a psychiatric nurse. You
know, the people that I respect most, as professionals, are
psychiatric nurses. But I can tell you, I am offended by your
reference to the unhappy well. We have large numbers of young
people in this country committing suicide, and their suicidal
behavior often times is in no way connected to what is a
diagnosable brain disorder as such.
You know, you talk about people who are kept in the
hospital inappropriately. I can sit here and talk to you about
suicides of young people who were put out of hospitals
inappropriately. I can talk to you about a young man that the
last time I saw was in a restaurant, and he had both ankles
broken because he had become fearful of living alone, thought
someone was coming in the door, jumped out a window and broke
all of his legs.
He died eventually, because he was in the hospital, they
thought that they should not keep him longer. They wanted to
get him in a group home. No group home was available, so they
arranged for him to go to a hotel room, and he hanged himself
in the bathroom. I think there is a greater number of people
who are being denied treatment turned out inappropriately,
certainly, than are being treated as an in-patient when they
don't need to be there.
Mr. Chairman, I yield back the balance of my time.
Ms. Nystul. If I may address Mr. Strickland's comment.
Mr. Bilirakis. Very briefly.
Ms. Nystul. He is taking out of context what I am saying in
regards to the unhappy well. Certainly, the people that you are
describing are people who have significant psychiatric issues,
symptoms, and functional impairments. My reference to the
unhappy well would be people that are suffering from spiritual
problems, gambling addictions, occupational problems, partner
relationship problems, those kind of issues--life stressors
that we all face in our daily life.
And, sir, if I may also read to you just briefly a
cautionary statement that is in the DSM-IV. ``The purpose of
the DSM-IV is to provide clear descriptions of diagnostic
categories in order to enable clinicians and investigators to
diagnose, communicate about, study, and treat people with
various mental disorders. It is to be understood that inclusion
here, for clinical and research purposes, of a diagnostic
category such as pathological gambling or pedophilia, does not
imply that the condition meets legal or other non-medical
criteria for what constitutes mental disease, mental disorder,
or mental disability.''
And I would argue----
Mr. Strickland. Mr. Chairman, if I could just respond to
that. I think what I have read to you concerning the
protections in terms of the use of the DM-III certainly would
handle those objections that you bring out here.
Thank you.
Mr. Bilirakis. Ms. Eshoo to inquire.
Ms. Eshoo. Thank you, Mr. Chairman, for having this
hearing. It is an incredibly important issue for the people of
our country. And I would also like to salute Congresswoman
Marge Roukema.
For those of you that are at the table, maybe some of you
don't know, she has announced that she will not be returning to
the Congress, and I think as the--I believe the highest ranking
woman in the House of Representatives, that the quality of her
work is certainly embedded in this legislation. It would be not
only a great tribute to her as a legislator with conscience,
but a tribute to the people of our country, if we pass this
legislation.
So I want to thank her for her work, not only in this bill
but for the work that she has done in the Congress. She has
done well by doing good for the American people, and I couldn't
mean that more.
To all of our witnesses, thank you for being here today. I
would like to ask those who I have had the benefit of listening
to your testimony that are opposed to the legislation. Dr.
Cutler, Mr. Trautwein, and Ms. Nystul, have any of you, yes or
no, had any mental health issues in either your immediate
family or your extended family? Dr. Cutler?
Mr. Cutler. Yes.
Ms. Eshoo. You have. Ms. Nystul?
Ms. Nystul. Yes.
Ms. Eshoo. You have. Were they covered?
Mr. Cutler. Yes.
Mr. Trautwein. Yes.
Ms. Nystul. Yes.
Ms. Eshoo. Were they termed biological?
Mr. Cutler. No.
Ms. Eshoo. They weren't. What was it?
Mr. Cutler. It was----
Ms. Eshoo. How did they get their coverage?
Mr. Cutler. I am sorry?
Ms. Eshoo. What was it that they were covered for?
Mr. Cutler. It was a significant disorder, but it wasn't--
if you are talking about biological, is it on the short list of
biological coverage, in some States, I would say no.
Mr. Trautwein. Mine was also covered. My situation in my
family's case, it was not a biological condition but it was
fully covered.
Ms. Eshoo. Ms. Nystul?
Ms. Nystul. The condition that my family member has was
covered.
Ms. Eshoo. But what was it?
Ms. Nystul. For depression.
Ms. Eshoo. For depression. And that was considered
biological? That is considered biological?
Ms. Nystul. It can be, yes. But in this case, there were
certainly significant functional impairments and symptoms to
support the need for care. And I believe that is what care
was----
Ms. Eshoo. So was it considered an extraordinary policy
that covered this, or was it standard in terms of biological?
Ms. Nystul. As far as I know, it was a standard plan. And,
again, no diagnosis----
Ms. Eshoo. No. Just let us stick to that because I only
have 5 minutes.
I would like to ask you, Ms. Nystul, in your nursing
career, did you ever serve at a local level, say, at a--in a
county health system?
Ms. Nystul. Yes. Actually, I did community support for the
chronically mentally ill.
Ms. Eshoo. Is there anything that stands out relative to
the disparity of coverage from those days that you did that
compared to what you are doing now with--is it Wausau
Insurance?
Ms. Nystul. Wausau Benefits.
Ms. Eshoo. Benefits. Well, it is an insurance. Yes,
benefits come from insurance policies. Is there anything that
stands out in your--from that part of your career?
Ms. Nystul. I think what I see differently in this job is
that there are requests for----
Ms. Eshoo. Well, I understand that you have to see things
differently in the job. Otherwise, you wouldn't be, you know--
but your experience as a nurse on the ground in the community,
is there anything that stands out from that experience to you?
Ms. Nystul. My experience in this job is that there are
requests for treatment at high levels of care for low impact
results. Again, often for containment and for convenience.
Ms. Eshoo. Well, you know what, Ms. Nystul. I have to tell
you that a lot of the terminology you use--and I am not a
nurse, but I have been around health care for a long time. I
really don't know what it means. It sounds like what you get
when you dial the 1-800 number to find out if you are covered.
And it is--I don't understand it, but I will reread your
testimony.
Mr. Trautwein, can you describe the average mental health
benefit of an NAM member? Does it deal simply with those--well,
it is not simply, but, I mean, it is--with the biological
coverage? Are there any of your members that go beyond that?
Mr. Trautwein. I think most of our members who provide
coverage go beyond that, and that was really the essence of the
1996 law, which allowed employers to determine----
Ms. Eshoo. You supported the 1996 law, the NAM?
Mr. Trautwein. Actually, no, we had----
Ms. Eshoo. You didn't.
Mr. Trautwein. [continuing] concerns on cost of----
Ms. Eshoo. These are ongoing concerns. Is there anyone that
opposes the bill on the panel whose mind has been somewhat
changed by the testimony of Mr. Hackett today?
Mr. Bilirakis. Brief responses. Time has expired.
Mr. Trautwein. From our standpoint, we are proud of our
members like----
Ms. Eshoo. No, no, no, no, no. Just yes or no. You can just
say yes or no.
Mr. Trautwein. No.
Ms. Eshoo. No. Dr. Cutler?
Mr. Cutler. I think Mr. Hackett's case illustrates that
there are alternatives already in place for employers.
Ms. Eshoo. That is not what he said.
Mr. Cutler. Well, what he----
Ms. Eshoo. He said that he changed--as I understand it,
they changed the coverage.
Mr. Cutler. He did, and----
Ms. Eshoo. No, don't--just--you know, I will tell you,
answer the question yes or no, because your evasions really
give the answer. So for the record, even though it may be
uncomfortable for you, which I understand--it must be because I
don't think the stand is one that the American people that are
tuned in to today, that you are for disparity.
We are trying to get things--move things into the equal
column. And so this is all about mental health parity, with the
physical health problems that people have today. And I think
that you are testifying for disparity. But is there anything
that he said that changes your mind?
Mr. Bilirakis. The gentlelady's time is----
Ms. Eshoo. Yes or no.
Mr. Bilirakis. [continuing] a couple minutes over.
Mr. Cutler. We are certainly not for disparity, and we have
problems, as we noted in the testimony, with the specific bill
as----
Ms. Eshoo. I think you have given your answer.
Thank you, Mr. Chairman.
Mr. Bilirakis. The gentlelady from New Jersey, who is the
author, as we already know, of the piece of legislation in
question, has sat through the entire thing. Marge, I did
mention that you were here, and if you had come back
immediately after the vote, I was going to give you an
opportunity for an opening statement.
But in any case, please take a couple of minutes, if you
have anything you want to say, or inquire, or whatever the case
may be.
Mrs. Roukema. All right. Thank you. No, I wouldn't have
taken time on the opening statements. I was very interested in
hearing the panelists. I want to say that a lot of good points
have been made here, and I guess I just want to reinforce them.
This parity debate is not an abstraction. It is about
patients, and we are talking about discrimination. That is the
point I wanted to make. This has also been pointed out by Ms.
Capps and others here, and certainly even Charlie Norwood, who
has said, ``Are we going to continue to treat mental health
patients as second-class citizens?''
We are talking about the stigma of mental health. And I
don't know, I just come here thinking, are we living in the
last century, or are we living in the 1930's and 1940's? It
seems to me that all of this should be just assumed, and the
question is: how do we put this bill together, so that there is
no continued stigma or discrimination against mental health
patients?
So I do thank the panelists that have supported this. As
for the others, I won't go into all of the details, but I will
simply say that I don't understand Ms. Nystul. I don't
understand her--particularly with her psychiatric background.
You spoke about it as though anybody just called up, any
patient's parents just called up, or family member just called
up, and they would be entitled to services. You didn't at all
acknowledge the requirements for medical referencing, and you
totally misrepresented what the bill does. And I don't
understand how you could have done that.
But the point is that I just hope that this Congress--and
from all the positive statements I have heard on both sides of
the panel here from Republicans and Democrats--we will end this
discrimination and get this long overdue bill passed this year.
And I do thank the chairman profusely.
Mr. Bilirakis. And the Chair thanks the gentlelady.
Mr. Norwood. Mr. Chairman, I ask unanimous consent to have
just a couple of minutes of additional questions that I think
will be helpful.
Mr. Bilirakis. All right. I am not inclined to go through a
second round. But if unanimous consent has been asked for an
additional 2 minutes, without objection.
Mr. Norwood. Okay. Guys, we are going to have to go fast.
First of all, I agree with Mr. Strickland--I want it on the
record--that people are being denied care and being kicked out
of hospitals inappropriately. I also agree, though, with Ms.
Nystul that there is some miscare, there are some things going
on that basically shouldn't happen.
I agree with Mr. Strickland that probably the denial of
care goes on a great deal more than miscare or people that are
trying to game the system. But it is important to point out
this system lends itself to that, because when you say a
patient shouldn't be treated, or the wrong treatment is
occurring, it is always done 3,000 miles away on the phone and
never having examined the patient. That is the problem when you
say people shouldn't be treated.
Second, the marketplace--don't hide behind the marketplace.
The marketplace should be a sick patient and a willing provider
of health care. But it is not. The marketplace is between the
insurance company and between the employer.
I think, Dr. Cutter, you would agree with me that a patient
who is denied care who doesn't believe that care--or believes
that care should have been treated, actually can never see the
contract that was negotiated between the insurance company and
the employer. They never really can know.
Now, that is not a marketplace that I understand anything
about. So don't hide behind the marketplace here. I would love
for the market to work, but it is between a sick patient and a
doctor.
Second, and last, Mr. Chairman--Mr. Trautwein, I have a
couple of questions for you, which points out the problem of
all of this, why we can't find some middle ground. Do you
believe that mental illness exists?
Mr. Trautwein. I do.
Mr. Norwood. So if I had a copy up here of an e-mail you
sent out to the mental health parity opponents, people who want
to kill this bill, directing them to a website that argues that
mental illness does not exist, and that the profession is a
farce, you would tell me that probably this e-mail has been
maliciously altered.
But that is exactly what you did. You encouraged people who
want to kill this bill to read a website that says, hey, nobody
is sick anyway. Why in the dickens do we want to pass this
bill? I have your e-mail, so I am certain you wouldn't deny it.
Mr. Trautwein. That is an accurate representation in the
way of my usual fashion of pointing folks to different sources
of information.
Mr. Norwood. Well, is that NAM's position, that mental
illness doesn't exist and this profession is a farce?
Mr. Trautwein. No. And I believe the particular e-mail
reference, if you would read further along that paragraph, it
urges readers to evaluate for themselves the information on
that website.
Mr. Norwood. Well, I encourage everybody in here to read
the website, because you can't miss what they are trying to say
on the website, which is mental illness doesn't exist, and the
profession is a farce. And for you, head of NAM, lobbying
effort to kill this bill, to send that out to people, is a
farce, in my opinion.
Now, I have a list of 10 State studies on mental health
parity that shows that there is a nominal cost impact. I
presume they are all wrong. CBO scores this bill at less than 1
percent. Now, I don't like CBO any better than the rest of you,
but they--are they wrong, too? Is .9 percent really the cost
here?
Mr. Trautwein. I think the point of the July 12 CBO memo,
it indicated that the .9 percent in premium increase is
accurate, but it is a diluted definition. It is a diluted
estimate. When you strain out the dilution, and look only at
the affected firms, there is forecasting a 30 to 70 percent
increase in----
Mr. Norwood. Which is the .9.
Mr. Trautwein. [continuing] cost concern.
Mr. Norwood. Well, you have to assume CBO either wants to
give us the wrong information, or they don't know what they are
doing, or you know a heck of a lot more about it than they do.
It is already explained how the 30 and 70 percent misleads this
committee into thinking that it is more than .9 percent.
Mr. Chairman, I know my time is up.
Mr. Bilirakis. God knows your time is up.
Mr. Wynn to inquire.
Mr. Wynn. Thank you, Mr. Chairman. Thank you for calling
the hearing.
Dr. Cutler, I think it is fair to say that you disagree
with the Bush administration's position on providing mental
health parity. Is that correct?
Mr. Cutler. I disagree with this bill as it is currently
written.
Mr. Wynn. Do you agree with the Bush administration's
position on parity?
Mr. Cutler. I understand that what President Bush suggested
was to increase coverage for mental health and not this bill in
particular.
Mr. Wynn. Do you agree with that? Do you agree we ought to
increase the coverage?
Mr. Cutler. Again, I will go back to what I said before
with regard to mandates, that we prefer that there not be
mandates, but----
Mr. Wynn. Okay. Well, thank you.
Mr. Strickland. Would my friend yield?
Mr. Wynn. Yes, I would be happy to yield.
Mr. Strickland. Dr. Cutler, I just think we want a simple
answer. The President has said--and he said in Senator
Domenici's presence--that he was in favor of parity. And the
question is: do you disagree with the President?
Mr. Cutler. Again, I have answered this question before.
I----
Mr. Wynn. Reclaiming my time, you know, I always have the
view that sometimes a witness' failure to respond to a question
is very telling, and I am not going to belabor it. I think it
is pretty obvious where you stand on that. And if you choose
not to answer the question directly, you have that right. Let
me move on.
Dr. Cutler, I believe you said that 96 percent of your
members offer substance abuse coverage of some sort. Is that
correct?
Mr. Cutler. Mental health and substance abuse.
Mr. Wynn. Mental health and substance abuse. Is there a
difference between the deductible for mental health versus the
deductible for--I guess it is the other kinds of health
insurance?
Mr. Cutler. Obviously, there is a variety of health plans.
But in some instances, yes.
Mr. Wynn. On average, is the deductible greater for mental
health?
Mr. Cutler. I don't know on average, but in many cases it
is greater, yes.
Mr. Wynn. Okay. Thank you. Now, you seem to be saying that
your biggest objection comes down to cost. Is that correct?
Mr. Cutler. There are cost issues, certainly, yes.
Mr. Wynn. Okay. How do you explain that Magellan Health
Services, the Nation's largest managed behavioral health care
organization, covers nearly 70 million individuals, reported
that they have yet to see a premium cost of more than 1 percent
as a result of implementing State mental health parity
requirements?
Mr. Cutler. I know Magellan has said that, but one of the
issues that Magellan didn't talk about is, in this particular
bill, the construction of how medical management would work is
problematic. It is not----
Mr. Wynn. What does that mean?
Mr. Cutler. What that means is Magellan controls costs by
various medical management techniques, the kinds of things that
Ms. Nystul was talking about before. This bill says that you
can only use those kinds of techniques if they are exactly the
same as they are for medical and surgical illnesses.
The difficulty is that medical and surgical illnesses are
different. There are clear milestones. There are clear
timelines. There are clear outcome measures for medical and
surgical illnesses than there are for mental health.
So it is likely that the kinds of interactions and
interventions that would be necessary to keep the care
affordable----
Mr. Wynn. If I could just interject something, because Mrs.
Roukema is here, and I wanted to ask if she would comment on
that just for accuracy's sake. Is that true, Mrs. Roukema, that
you have to use the same procedures that he is describing?
Mrs. Roukema. I am sorry. I didn't get to hear what he was
saying about procedures.
Mr. Wynn. I am sorry. Maybe I cut him off too soon.
Mrs. Roukema. No. Well, the procedure should be the way
other medical procedures are, and have the medical
professionals confer with the patients and with those who
handle the program. But the question is, again, fundamentally,
why are you discriminating against mental health patients as
opposed to orthopaedic patients?
There is a profession here, and there are clear definitions
of what is mental illness and what is not, and we are not
talking about substance abuse. That is not included in this
legislation.
But I think you have misrepresented--I am sorry. Go ahead.
Mr. Wynn. No.
Mrs. Roukema. I will defer back to you.
Mr. Wynn. I am actually just trying to get back to the
fundamental question of Magellan's findings, which was that the
premium increase was no more than 1 percent as a result of
implementing State mental health parity requirements. They were
State requirements. Do you deny that that was the case? Do you
contradict--are you going to contradict Magellan's findings? Or
what is your response?
Because you are premising your argument against this bill
primarily on cost, and there doesn't seem to be--particularly
in light of other comments that we have heard here from Mr.
Norwood--that there is a significant cost increase associated
with this.
Mr. Cutler. Well, there are two issues. I don't contradict
what Magellan said from its own experience. But there is
experience elsewhere--the California Public Employment Retiree
System has projected a cost increase of 3.3 percent for their
PPOs, for example. South Carolina, where there is a mandate,
had a premium increase of 3.2 percent. And the Substance Abuse
and Mental Health Services Association of the Federal
Government predicted a 3.4 percent premium increase.
Mr. Wynn. Okay. Now, with those premium increases----
Mr. Bilirakis. Please finish up. Go ahead.
Mr. Wynn. Could I just finish one question, Mr. Chairman?
Mr. Bilirakis. Yes.
Mr. Wynn. Thank you. Now, where they have these increases,
I think the maximum you cited was a 3 percent increase when you
consider that the Federal Employees Health Benefit Plan
increased 13 percent, that doesn't seem so great.
But my point is: isn't that a total pass-through to the
customer, so it is the customer's option to pay that premium
for that benefit? So it is really not a burden on the company
in terms of cost, because the costs are passed through. Isn't
that true?
Mr. Cutler. That is true. But what we are concerned about
is whether employers will continue to offer coverage if the
premiums continue to go up at the rate at which they are
currently increasing. And this would add an additional 3
percent. So our----
Mr. Wynn. Well, it might add 3 percent or it might add 1
percent.
And I will relinquish the balance of my time, or the
balance of time I don't have.
Mr. Bilirakis. Anyhow, what I read from the panelists is
that there is a willingness to try to work on this subject. I
may be reading that incorrectly, but I see that. I mean, I look
at it optimistically.
In any case, the hearing is now ended. We do ask that you
be available to answer written questions--the one that I posed,
which is a very complex one, but also additional written
questions that will be afforded to you by the staffs. And
without objection, the record will remain open for any
extraneous material.
It has been a good hearing, and, of course, you have made
it so. Again, getting back to my prior statement, that is, do
we want progress, if you will, or some additional coverage--if
I can put it that way--for mental health parity? Or do we want,
basically, all or nothing? And if we can get away from the all
or nothing, I really think it is something that we can work
out.
Now, someone can raise the question, well, mental health
parity is black and white. Mental health parity--well, I
suppose that is one way of looking at it.
But anyhow, thank you so very much. Whatever progress we
may have as far as this area is concerned will be in no small
measure attributable to your testimony. Thank you very much.
The hearing is adjourned.
[Whereupon, at 12:38 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Responses for the Record of Kay Nystul, Psychiatric Registered Nurse,
Certified Case Manager, Clinical Management Coordinator, Wausau
Benefits, Inc.
questions regarding dsm iv
Dr. Regier's testimony states that the controversy over whether to
incorporate DSM IV into statutory law is a red herring. Many states
that have looked at this issue have chosen to limit any parity
requirements to ``biologically-based'' or ``serious'' mental illness as
they define them. Those states do not require use of DSM IV criteria.
Dr. Regier is asking Congress to incorporate an 800-page manual by
reference in a statute. That would give that document legal standing in
many ways and with many potential consequences. In asking the
Subcommittee to take such a step, we need to fully understand and
resolve all of the attendant controversies. Below are some of the
relevant questions.
Question 1. It would appear from Dr. Regier's testimony that some
believe if a group health plan offers any mental health benefits, H.R.
4066 requires the plan to offer coverage for a comprehensive list of
conditions set out in DSM IV. This reading is stated in the Views of
the Senate Committee on Health Education Labor and Pensions on S. 543,
the Senate analogue to H.R. 4066. This reading, however, is troubling
and not supported by the text. Nothing in H.R. 4066 appears to require
a plan to cover any category of mental health benefits, much less the
long list of ``conditions'' in DSM IV. H.R. 4066 defines mental health
benefits, in part, as:
benefits with respect to services, as defined under the terms
and conditions of the plan or coverage (as the case may be),
for all categories of mental health conditions listed in [DSM
IV]
The reference to DSM IV helps define what is a mental health
benefit. Nowhere in the text, however, does the bill state that group
health plans must provide comprehensive mental health benefits or
provide benefits as broad as the conditions listed in DSM IV. The
Subcommittee's reading is that if a plan provides any given mental
health benefit the parity rules of the bill apply to that category of
benefits. Nothing in the parity rule in proposed section 712(a) states
that a plan must provide coverage for all of the conditions listed in
DSM IV. Indeed, the savings clause language in proposed 712(b)(1) and
(3) state that no mental health benefits are ever required at all; and
that no specific services are ever required, except to the extent
required by the parity rule itself. It is difficult to see how the
parity rule would require any category under DSM IV.
Are you arguing that H.R. 4066 requires mental health plans to
provide coverage for all conditions in DSM IV? If so, please explain
your reading and your reading of the savings clause language, with
specific references to language in the bill. For those that do not
support such a position what clarifications are necessary to assure the
appropriate policy from your prospective?
Response: I cannot support a policy that diverts health care
dollars away from treatment of truly ill individuals to fund
questionable treatment plans for individuals with behavioral problems
that call for more limited treatment.
Making a distinction between a ``mental illness'' and mental
conditions is necessary. Mental illness should be defined to mean
affirmatively diagnosed serious and/or biologically based mental
illnesses as defined in the DSM IV-TR, or the most recent edition if
different than the Fourth Edition.
Question 2. Is there any precedent in current federal statutes that
says, in effect, that if you provide ANY given service, such as mental
health services that you must cover ALL conditions listed in a manual
prepared by one group of health care professionals? For example, is
there a similar federal law that says that if you provide coverage for
some pharmaceuticals or medical procedures that you must now cover ALL
pharmaceuticals or medical procedures listed in a manual prepared by a
trade association of pharmacists or medical care providers?
Response: There is no precedent of which I am aware stating that if
you provide any given service that you must cover all conditions listed
in a manual prepared by a group of health care professionals. The DSM-
IV TR is not unlike the ICD-9-Code book that classifies diagnosis or a
PDR (physician desk reference) which classifies drugs. These references
are tools for clinicians--not coverage mandates that dictate what
services must be covered under a benefit plan.
Question 3. Dr. Regier's testimony addresses the categories of DSM
IV referred to as conditions for clinical focus. These include such
items as: sibling relational problem; occupational problem; academic
problem; and religious or spiritual problem. Some of these terms would
apparently apply even if they are not termed ``mental disorders'' under
the manual. For example, V. 62.2 ``Occupational Problem'' states that
the condition need not be a mental disorder. The manual further states
``[e]xamples include job dissatisfaction and uncertainty about career
problems. The manual provides an example of V. 62.3 ``Academic
Problem'' as ``a pattern of failing grades or significant
underachievement in a person with adequate intellectual capacity in the
absence of a Learning or Communication Disorder or any other mental
disorder that would account for this problem.'' Does H.R. 4066
incorporate these conditions even where the manual states that they are
conditions and not mental disorders?
Response: Yes, H.R. 4066 incorporates all conditions, even when the
manual states they are conditions and not mental disorders. The bill
makes no distinction between conditions and disorders in the bill.
There is reference to ``mental illness'' in 712(a) of the bill,
however, the term ``mental illness'' is left undefined.
Inclusion of V-codes in the DSM-IV-TR does not imply that the
condition meets legal or other nonmedical criteria that constitutes
mental illness or disease, or true mental disorder as outlined in the
DSM's cautionary statement. V-codes are used to categorize conditions.
These conditions are not comparable to a serious mental illness in
which there is significant functional impairment and symptoms. They are
simply problems. By including these conditions/problems, H.R. 4066
clearly puts at risk already limited treatment dollars, and in the
process, takes money away from the treatment of the psychiatric illness
it proposes to benefit.
Question 4. DSM IV category 315.1 is called Mathematics disorder.
One of the diagnostic criteria is that mathematical ability is
substantially below that expected for the person's age and
intelligence. Another criterion is that it significantly interferes
with academic achievement. Are you saying employers must have insurance
to cover diagnosis and treatment for Mathematics disorder?
Response: If the health plan provides mental health coverage, it
apparently must provide coverage for Mathematics Disorder. Mathematics
Disorder is classified in the DSM-IV-TR as a learning disorder. The
public school system is already required to finance and provide
children the education and tools needed to remedy any such learning
problems. A health plan would be just another source of funding for
that particular problem in addition to funding serious mental illnesses
that often do not have other resources available for support.
Question 5. The DSM IV manual also states criteria to describe
mild, moderate, and severe disorders. Mild disorders or example are
defined as ``[f]ew if any symptoms in excess of those required to make
the diagnosis are present, and symptoms result in no more than minor
impairment in social or occupational functioning.''
Dr. Regier's testimony mentions the term ``clinically significant
impairment.'' Does the universe of clinically significant impairments
include mild disorders and conditions? What specific evidence would be
required to describe a mild version of the following conditions in DSM
IV:
Parent-Child Relational Problem V61.20
Sibling Relational Problem V61.8
Relational Problem Not Otherwise Specified V62.81
Noncompliance with Treatment V15.81
Adult Antisocial Behavior V71.01
Child or Adolescent Antisocial Behavior V71.02
Borderline Intellectual Functioning V62.89
Age-related Cognitive Decline 780.9
Bereavement V62.82
Academic Problem V62.3
Occupational Problem V62.2
Identify Problem 313.82
Religious or Spiritual Problem V62.89
Acculturation Problem V62.4
Phase of Life Problem V62.89
Are all of these conditions to be considered ``clinically
significant impairments''? If so, how is clinical significance
measured?
Also, where in DSM IV is there a discussion of the specific medical
evidence supporting each category?
How would you propose to determine what meets a parity standard
between these mental health conditions and medical conditions?
Response: As mentioned in my testimony, you cannot measure
clinically significant impairments with the above V-coded conditions/
problems because there is no significant psychiatric impairment. It
would appear that the universe of clinically significant impairments in
H.R. 4066 would include mild disorders and conditions. Trying to
compare medical illness to psychiatric illness as the house bill
proposes is simply not possible. There is no standard that can compare
the two. In the medical arena, measurement is objective as compared to
the psychiatric arena which is highly subjective, often without basis
for true scientific measurement.
Question 6. Do you believe that the diagnostic criteria in DSM IV
should have legal standing by virtue of its reference in H.R. 4066, and
if so, for what legal purpose or purposes?
Response: The DSM-IV-TR was never intended to be a guide for
benefit coverage. It is intended to be used as a physician's reference.
This manual should not have legal standing by virtue of reference in
H.R. 4066. It is unreasonable to create a benefit entitlement by
reference to this professional reference guide.
Question 7. Could you support language that says that the diagnosis
of a disorder and its treatment must be well established and supported
by substantial scientific evidence?
Response: Yes. It is also important to distinguish between those
conditions that are serious mental illnesses and those conditions that
are not. Parity for all conditions in the DSM-IV is an unwise
allocation of limited health care dollars.
Question 8. Dr. Regier's testimony says that DSM IV has ``precise''
criteria for diagnoses. Can you please explain category 313.81 called
``oppositional defiant disorder''? The diagnostic criteria require four
among the following:
<bullet> often loses temper
<bullet> often argues with adults
<bullet> often actively defies or refuses to comply with adults request
or rules
<bullet> often deliberately annoys people
<bullet> often blames others for his or her mistakes or behavior
<bullet> is often touchy or easily annoyed by others
<bullet> is often angry and resentful
<bullet> is often spiteful or vindictive
As Dr. Regier notes criteria also requires ``clinically
significant'' impairment. This all seems pretty subjective. Other than
the phrase ``clinically significant'' a lot of teenagers may meet these
other criteria for periods of time. This puts a lot of emphasis on the
phrase ``clinically significant.'' Recognizing that the DSM discusses
clinical significance and states that ``assessing whether this
criterion is met . . . is an inherently difficult clinical judgment'',
is it realistic to establish any objective standards for purposes of
determining what is not clinically significant?
If there is a disagreement with the group health plan over an
individual case, does the beneficiary or provider have the burden to
show a clinically significant impairment?
Response: The evidence for determining a clinically significant
impairment is the functional impairment and the symptoms that the
person is experiencing as determined and reported by the provider.
Where no functional impairments and/or symptoms exist, it will become a
matter of what is significant for any particular condition. Plans will
have great difficulty determining what is significant with respect to
parent-child relational problems, spiritual problems, learning
disorders, etc.
The burden to disprove significance or medical appropriateness, as
H.R. 4066 would have it, will fall squarely on the health plan. This
kind of situation invites litigation, which is unacceptable in today's
cost-burdened environment and will be even more so once a Patient Bill
of Rights is approved.
The unintended consequence of all this is that limited treatment
dollars will be spent needlessly on low-impact conditions.
Question 9. Is it correct that the DSM IV is essentially based on a
1994 classification scheme that may require revisions now? If we
incorporate DSM IV in a statute, how do we propose plans keep up with
advances in the classification and diagnostic system? Do you believe it
is appropriate to delegate this authority to a nongovernmental body?
Since members of the American Psychiatric Association would appear to
benefit financially from broad definitions of coverage, please comment
on whether you believe such a delegation would represent a conflict of
interest. If not, why not?
Response: The DSM-IV-TR was last revised in June of 2000, and
reflects a consensus of current formulations in the evolving knowledge
base of the psychiatric field. It will continue to change. The DSM was
never intended to serve as a benefit mandate. Delegating this authority
to a nongovernmental body is most certainly not appropriate and
absolutely represents a conflict of interest.
questions regarding the federal employees health benefits program
Question 10. Dr. Regier's testimony correctly notes the Office of
Personnel Management has issued guidance which refers to DSM IV as an
objective for health plans contracting with the Federal Employee Health
Benefits Program. An initial review of several health insurance plans
under FEHBP showed no reference to DSM IV in the plans available in
2002. Several of the actual plans had a definition of mental health
benefits that referred to certain categories in the International
Classification of Diseases (ICD). Are you aware of plans in FEHBP that
specify DSM IV? What is your opinion of the plans that specified
certain categories of ICD? Please list the differences in the DSM IV
categories and the following language:
``Conditions and diseases listed in the most recent edition of
the [ICD] as psychoses, neurotic disorders, or personality
disorders; other nonpsychotic mental disorders listed in the
ICD, to be determined by us . . .''
Given that actual FEHBP contracts are not using DSM IV, why should
we mandate a change in statute?
Response: A change is unwise and unnecessary. However, if a change
is made, it should require parity for only serious mental illnesses.
Question 11. A survey of FEHBP plans also indicates a number of
exclusions that are not specifically provided for in H.R. 4066. These
include, but are not limited to:
<bullet> counseling or therapy for marital, educational or behavioral
problems
<bullet> services provided under a federal, state or local government
program
<bullet> treatment related to marital discord
<bullet> treatment for learning disabilities and mental retardation
<bullet> all charges for chemical aversion therapy, conditional reflex
treatments, narcotherapy or any similar aversion treatments and
all related charges (including room and board)
<bullet> services by pastoral, marital, or drug/alcohol counselors
<bullet> biofeedback, conjoint therapy, hypnotherapy, interpretation/
preparation of reports
<bullet> services, drugs or supplies related to sexual transformation,
sexual dysfunction and sexual inadequacy
<bullet> experimental or investigational procedures, treatments, drugs
or devices
First, would you support language making clear that all exclusions
like these and others found among FEHBP carriers would be available?
Second, if language were also to refer to the DSM IV, how would you
resolve excluding sexual dysfunction when it is clearly identified in
DSM IV? Finally, under the same circumstances, how would you resolve
excluding marital, educational, and behavioral problems when the DSM IV
includes conditions such as:
Partner Relational Problem V61.1
Academic Problem V62.3
Mathematics disorder 315.1
Attention Deficit Hyperactivity Disorder 314
Child or Adolescent Antisocial Behavior V71.02
Response: Health plans need flexibility in order to better manage
the financial risk associated with offering benefits so that they may
continue to pay the costs of health care. Unfortunately, the language
of HR 4066 will prevent employers from establishing defensible
treatment limits or financial requirements to effectively manage mental
health benefits, and would appear to prohibit standard plan exclusions.
I would support language making it clear that exclusions would be
available.
Placing conditions like the V-coded disorders on equal footing with
true psychiatric illness, such as Bipolar disorder, major depression
and post-traumatic stress disorder, is unworkable. To illustrate,
sexual and impulse control disorders are usually problems of
environment, relationships, personal choice or dissatisfaction or
relational dissatisfaction. For these disorders, there is no actual
functional impairment and they are difficult to disentangle from poor
parenting, criminality or personal values. Treatment is nebulous,
lengthy, expensive and of questionable resolution.
Question 12. In a letter to carriers dated April 11, 2001, OPM
emphasizes that managed care behavioral health care organizations
(MBHO) can implement mental health benefits. Where plans do not choose
to use such organizations, OPM recommends approaches such as gatekeeper
referrals to network providers, authorized treatment plans, and pre-
certification of inpatient services. OPM states that plans may limit
parity benefits when patients do not substantially follow their
treatment plans. Do you agree with these recommendations and
allowances? How can compliance with treatment plans be proven?
Response: I disagree with these recommendations and allowances. As
a clinical professional working in the field of mental health daily, I
do not know how one would objectively prove that the treatment plan is
not being ``substantially'' followed, especially for conditions such as
occupational and/or identity problems for which HR 4066 proposes
parity. What will constitute substantial and who will define it? Again,
how can you possibly measure compliance for treatment that is elective,
nebulous and not evidenced by any objective criteria?
questions concerning the general parity rule
Question 13. Even outside of mental health benefits, health plans
do not treat all categories of health benefits equally. For example,
outpatient physical therapy, emergency care, specialty care, speech
therapy, occupational care, chiropractic care, and preventive care
often have different limitations than other categories of items or
services. Prescription drugs may also have different categories of co-
payments based on the kind of financial arrangements a plan can arrange
with pharmaceutical companies. Do you consider differences in approach
among these categories to be discrimination against the particular
patients who may use these services? For example, are we allowing
discrimination against those who need dental coverage or chiropractic
care?
Response: As stated in my testimony and based on this logic, it is
reasonable to conclude that benefit plans should be able to establish
different treatment limits or financial requirements between differing
types of mental health conditions.
Question 14. On page seven of Dr. Regier's written testimony he
claims that the Subcommittee would be outraged if Congress permitted,
among other things, insurers to charge more that twice as much out-of-
pocket for seeing an endocrinologist than for seeing and internist.
This statement is a little unclear. Congress does permit plans to do
just that. There is no current Federal restriction on what a plan
should charge for a visit to an internist versus a specialist. Indeed,
plans often do have different rates and conditions for such things. Is
it your understanding that Federal law prohibits different rates and
categories on the non-mental health side?
Response: No, this is not my understanding. Federal law allows full
flexibility on the non-mental health side.
Question 15. H.R. 4066 would replace the 1996 parity rule and
change it in a variety of ways. For example, the 1996 language provides
a rule in the case where a plan has different aggregate lifetime limits
on different categories of medical and surgical benefits. The 1996
language also provides a clear option to have overall lifetime and
annual limits that do not distinguish between mental and non-mental
health benefits. These seem like important concepts. Why do proponents
of H.R. 4066 seek to make these changes? Is there any problem with the
current provisions on lifetime and annual limits? Won't these changes
start a new round of reviews for equivalent state laws?
Response: The current provisions on lifetime and annual limits
detract from benefit plan flexibility and can, in some cases,
discourage plan sponsors from offering mental health benefits at all.
Question 16. Medical and surgical services have different
reimbursement rates. For example, services required for hip replacement
might include surgical fees, MRI fees, hospitalization, and
rehabilitation, each of which may be reimbursed at a different level. A
broken leg might require emergency room services and physical therapy
in addition to physician fees, and again, each of these services might
have still different reimbursement mechanisms.
If this legislation is enacted, health plans would be required to
have the same cost sharing requirement for mental health services as to
comparable non-mental health services covered by the same plan. What
happens if a health plan has one deductible and coinsurance amount for
physician office visits, another one for physical therapy and a third
one for occupational therapy, and a fourth one for preventive services?
How is the health plan supposed to comply in this case? Which one would
apply for treatment of schizophrenia or treatment of sibling rivalry
condition? Wouldn't parity requirements force a revaluation of the
whole system and make billing issues extremely complicated?
Response: Parity requirements would force a revaluation of the
whole system and make billing and benefit design issues extremely
complicated. HR 4066 does not set forth how a health plan would compare
coverage for mental health and physical health. I do not believe such a
basis for comparison exists or could even be created. There are stark
differences between the medical treatment of body and mind.
Question 17. Group health plan sometimes provide a tiered formulary
to address drugs. Under such an approach there are different cost-
sharing requirements because the plan was able to get certain discounts
or because of different cost effectiveness. Would such a plan violate
parity rules if the net effect of the plan made certain psychotherapy
drugs to have a higher cost-share? If so, would the determination be
made on a drug-by-drug basis?
Response: It would appear that a plan would violate parity rules if
the plan proposed to vary cost-sharing arrangements, as there would be
no conceivable parallel with physical conditions that would provide
such an allowance.
Question 18. Could plans differentiate reimbursement based on
qualifications? For example, a psychiatrist may have a different
reimbursement rate than a psychologist. Could this in any way violate a
parity requirement? Let's assume a group health plan creates outpatient
categories based on whether or not the visit was to someone with a
medical degree--not on whether it was mental illness related or not.
Under H.R. 4066 could such an approach be viewed as discriminatory to
psychologists and, thus, to mental health benefits? That is to say,
could lawyers argue that there is a disparate impact test?
Response: Yes, lawyers could argue that there is a disparate impact
test. HR 4066 removes all flexibility in the provision of mental health
benefits, making this coverage mandate unprecedentedly broad.
Question 19. There is a savings clause on Page 8 of H.R. 4066
beginning line 11 under the title (3) NO REQUIREMENT OF SPECIFIC
SERVICES. It states:
Nothing in this section shall be construed as requiring a group
health plan (or health insurance coverage offered in connection
with such a plan) to provide coverage for specific mental
health services, except to the extent that the failure to cover
such services would result in a disparity between the coverage
of mental health and medical and surgical benefits.
This language seems circular. What is the point of the exceptions
clause? Please provide some examples illustrating the intent of this
provision.
Response: I agree. This language is circular and therefore,
incredibly difficult to interpret and apply.
questions concerning medical management provisions
Question 20. The scope of the general parity rule in proposed
712(a) and related provisions are quite confusing. In the section
entitled medical management of mental health, what is meant by the lead
phrase ``consistent with subsection (a)?'' Do you believe a parity rule
should apply to how medical management techniques such as concurrent
and retrospective utilization review or application of medical
necessity and appropriateness criteria must have parity rules applied
when evaluating mental health services? If so, would this mean that
arguments could be made that the failure to find a mental health
benefit necessary or appropriate is legally bound by a comparison to
such a decision for non-mental health benefits? If not, what is the
purpose of the phrase ``consistent with subsection (a)?''
Response: The purpose of the phrase ``consistent with subsection
(a)'' is debatable. It will encourage litigation. I do not believe that
medical management techniques, such as concurrent review and
retrospective utilization review or application of medical
appropriateness, should have parity rules applied when evaluating
mental health services. There is no basis for comparison between mental
and physical health or the standards by which either are measured. In
the field of mental health, functional impairment and symptoms of the
individual are the appropriate applied medical criteria. These criteria
are considerably less objective or scientific than are physical medical
criteria.
Question 21. Under H.R. 4066, treatment limitations include
``limits on the duration or scope of treatment under the plan or
coverage.'' Do you believe this means that decisions to limit the
duration or scope of treatment for therapeutic reasons must be held up
to a parity test? If so, how would this work? If not, why are these
included in the definition of treatment limitations subject to the
parity requirements?
Response: It is probably the case that decisions to limit the
duration or scope of treatment for therapeutic reasons must be held up
to a parity test. How this would work is highly questionable and will
be litigated. The practical effect will be to pay it all if mental
health coverage even continues to be offered. Paying it all will
deplete the funds available in the health plan to treat both physical
and mental health conditions.
Question 22. Proponents of parity legislation state that plans will
be able to minimize abuse through use of the standard ``medically
necessary and appropriate.'' During the patients' bill of rights debate
it seemed like the emphasis was on getting away from the use of this
standard by plans. In fact, patients' rights legislation all make clear
that plans decide which categories to cover, what exclusions to have,
and what cost-sharing to have. Would this new legislation drive more
``medical necessity'' determinations by plans? Also, patients' rights
legislation, if enacted, would subject such decisions to lawsuits for
damages. Do you favor such lawsuits and what would be the cost of such
suits? In the 40 states that permit external review of denials such
reviews can average more than $600 a case. Wouldn't more qualitative
decisions concerning medical necessity increase these expenditures?
Response: In my opinion, I do think this new legislation would
drive more ``medical necessity'' determinations. I can assure members
of the panel that using medical necessity as a last resort screening
methodology for many of the lesser conditions (not serious mental
illness) is like not managing the benefit at all. Many of these
conditions are based solely on self-reported symptoms, which by
themselves, do not justify significant, if any, clinical intervention.
questions concerning costs increases and potential decreases in
insurance coverage
Qiestion 23. Dr. Cutler's testimony notes that the California
Public Employees Retirement System has reported that mental health
parity legislation would cause premiums for its two PPO options to
increase by 3.3 and 2.7 percent, respectively, in 2003. Dr. Cutler also
notes that a 1998 study commissioned by the Substance Abuse and Mental
Health Services Administration estimated that a mental health parity
law would increase premiums by and average of 3.4 percent. Has your
organization reviewed these studies? Does your organization disagree
with them, and if so, on what points?
Response: Our organization has not reviewed these studies. However,
I would like to make a couple of comments on the point of using any
study to predict what kind of cost impact this federal bill will have.
First, I am not aware of any plans that currently cover mental health
the way H.R. 4066 proposes to cover it. So caution is warranted when
using studies on current health plan cost impact. Chances are that it
will not be an apples-to-apples comparison. Secondly, cost predictions
have as much to do with analyzing the increased scope of coverage as it
has to do with measurable changes in behavior on the part of both the
patient and provider when a third party has been mandated to pay for
unlimited services.
Question 2. CBO estimates that H.R. 4066, if enacted, would
increase premiums for group health insurance by an average of 0.9
percent, before accounting for the responses of health plans,
employers, and workers to the higher premiums under the bill. On July
12, 2002, CBO issued some clarifications of this estimate. CBO notes
that the 0.9% premium increase is a weighted average of both affected
and unaffected plans. According to CBO, affected plans would experience
and increase of between 30 and 70 percent of their mental health costs.
Do you consider these costs to be substantial and do you believe some
employers may choose to not offer mental health benefits?
Response: I do believe that passing HR 4066 will cause many
employers to not offer mental health benefits at all. Most employers
currently provide coverage for mental health conditions that cause
significant impairment and symptoms, but selective coverage for
treatment of low-impact conditions. This flexibility should continue.
In one of the examples I cited in my testimony, a treatment
facility was asking for 12 months of service at $300.00/day that would
total approximately $108,000.00. These are very real requests. I cannot
help but believe that these requests will increase dramatically,
especially for adolescent treatment if this bill passes. It would just
take one of these cases to financially burden a health plan.
There are a lot of troubled teens, but quite frankly, this does not
equate with a mental illness. Rather than mental illness, many troubled
teens just have a chaotic home life, poor role models, low self-esteem,
impulsiveness and a tendency to make bad choices. When parents know
they have the option for someone else to take care of the problem, and
for someone else to pay for it, they often go that route. Once these
kids are diagnosed with parental child issues/adolescent antisocial
behavior, parents often demand to have them in 24-hour care for 9 to 12
months. This is not only fiscally irresponsible, but also, in my
opinion, socially irresponsible.
Nevertheless, this is the kind situation mental health parity will
create. Shouldn't mental health benefits be earmarked for kids that are
depressed, symptomatic, functionally impaired or suicidal--or for
significantly impaired kids with anxiety/panic attacks and PTSD
symptoms like Mr. Hackett's daughter? This is the choice with which
we're faced.
Question 25. CBO also assumes that responses to cost increases from
affected firms might include reductions in the number of employers
offering insurance to their employees and in the number of employees
enrolling in employer-sponsored insurance, changes in the types of
health plans that are offered, and reductions in the scope or
generosity of health insurance benefits, such as increased deductibles
or higher co-payments. Do you agree with these assumptions?
Response: I agree with this statement. Mandating parity treatment
for the entire DSM-1V-TR is not the answer to addressing the issue of
updating 1996 mental health parity. Mandates that prescribe how plan
sponsors must provide for mental health coverage and hence, how much
they must spend, create an incentive for employers to not offer the
coverage. I know this is the opposite result of what Congress is trying
to achieve. I work daily in the mental health field and know what
consumers are demanding for service. Passing HR 4066 will further
increase demand and without having any way to limit utilization, costs
will be driven upward significantly. The employer and ultimately, the
employee (the patient) will feel the impact of this cost spike. Nobody
wins.
Question 26. CBO estimates two categories that would need to be
offset by the budget resolution. First, CBO estimates that the
resulting reduction in taxable income would grow from $1.0 billion in
calendar year 2002 to $2.3 billion in 2011. Those reductions in
workers' taxable compensation would lead to lower federal tax revenues.
CBO estimates that federal tax revenues would fall by $230 million in
2002 and by $5.4 billion over the 2002-2011 period if H.R. 4066 were
enacted. Second, CBO also stated the cost of federal spending on
Medicaid and S-CHIP to the cost of the bill. CBO estimates this bill
will cost those programs about $30 million in 2002 and $600 million
over the 2002-2011 period.
Have supporters of H.R. 4066 provided specific means of offsetting
these figures--whether through increased taxes or reductions in other
spending?
Response: I do not believe that H.R. 4066 is a fiscally sound
policy. Offsets for the changes this bill would bring about will impose
serious cost pressures from many angles.
Question 27. A study conducted by the UCLA/RAND Research Center on
Managed Care found that techniques to intensively manage care,
including the use of provider networks and case management, is critical
to appropriate utilization and maintaining costs. Various estimates
have found a different cost increase depending on the amount of managed
care involved. Costs are higher when a group health plan offers a non-
managed health care plan to its employees. Is it not more likely that
where a health plan is not a managed care plan that its mental health
care costs are likely to be higher if this legislation is enacted? What
are the potential dangers to the quality of care if health plans are
unable to manage mental health benefits successfully as they are
currently able to do? Is it possible to contract with all potential
providers of mental health care?
Response: I believe that case management is vital to appropriate
utilization of mental health services and maintaining costs. I think
there is one primary potential danger to the quality of care if health
plans are unable to manage their mental health benefits successfully.
Employers may choose to simply not offer the coverage, which will
undoubtedly have a serious impact on access to care, and hence, the
level and quality of care available. Patients will be negatively
impacted.
Furthermore, given the vast array of professionals that can provide
services to those in need of mental health conditions, it is impossible
to contract with all potential providers of mental health care. Not
only are there many different professionals that can provide mental
health services to treat the broadly defined mental health conditions
of the DSM IV, but there are also no limits on the types of services
that can be recommended by them. Because H.R. 4066 does not permit
limits, it is possible that health plans could be required to pay those
who provide tutoring, physical fitness, aroma therapy, massage therapy,
art therapy, horseback-riding therapy, etc.
Question 28. I understand that an independent analysis was done a
couple years ago by the Lewin Group that concluded that for every one
percent increase in health care costs (beyond the normal rate of health
inflation) an additional 300,000 Americans lose their health care
coverage. I assume some of those lose their coverage because their
employers simply stop offering health insurance at some point. Is it
not also correct that many more lose their coverage, though, because
they cannot afford it themselves as the price goes up and up? Is it
possible that some employers may simply decide to drop mental health
coverage entirely if this legislation is enacted? If so, what sorts of
companies might be forced to make such a drastic decision in your
opinion?
Response: In this nation, we have chosen to privately finance
health care, largely through employers. And the system works--we have
the premier health care system in the world. However, there are some
very real threats to the system. Open-ended benefit mandates are one of
the most significant threats to that system. If the cost pressures
become too great for the primary funders of this system, greater
numbers of individuals will clearly lose coverage.
Question 29. (a) On page six of Dr. Regier's testimony, he quotes
someone who states ``insurers tend to provide poor mental health
benefits in order to avoid [enrollees with mental disorders].'' It is
difficult to understand this claim in the current context or in
general. In the group market, insurers are not selling to individuals
at all, but to groups. Under ERISA there is no ability to look at or
discriminate based on the conditions of individuals. Is there any
further basis for the above claim?
(b) Dr. Regier further notes that insurers shift costs from
insurers to employers who are not able to take advantage of the market.
This too is hard to comprehend. Employers purchase insurance, so, of
course, the costs are shifted to the purchaser. Employers, however, can
choose from among insurance products in a free market. Dr. Regier then
states: ``In effect, insurers are subverting responsible employers by
segmenting risk and costs and shifting the obligation of mental health
coverage onto an already overburdened public sector.'' Most employer
groups that I am aware of oppose this parity legislation. Some
employers provide broader insurance coverage, some provide less, and
others not at all. Some employers who provide coverage now may be
forced to drop this benefit if costs go up too much. Is there any
further basis for the statement that employers are not able to take
advantage of the market or that insurers are subverting responsible
employers?
Response: Our experience does not suggest that this kind of
activity is taking place, or could take place, therefore, I have no
comment.
Question 30. Dr. Regier states there is no objective evidence that
businesses are paying for peripheral conditions to any statistically
significant degree. That is, of course, because there is no law
compelling that they cover such conditions. On page ten of Dr. Regier's
written testimony he states that `` `malingering' is no more likely to
be covered in a post parity world than it is today.'' Can you provide
an example of clinically significant malingering, and reasons as to why
employers should be forced to cover this condition? Dr. Regier also
states ``it is remarkable that an insurance industry that has
historically sought to avoid responsibility for treating severe mental
disorders is today expressing concern that only severely mentally ill
patients should be covered by parity legislation.'' Please comment on
the basis for this statement.
Response: Finding just the right policy answer is a complex task,
yet the desired outcome is simple. People suffering from severe mental
illness, either from a biological basis or significant/serious
impairment, need treatment. And, this treatment needs to be paid for.
Health plan funds are not unlimited. It is imperative that health
plan sponsors be able to continue to offer mental health coverage for
these kinds of people who truly need it. There is a clear distinction
between the need for treatment of biologically based and/or serious
mental illness and the other conditions listed in the DSM-1V-TR.
question concerning compliance times
Question 31. H.R. 4066 has an effective date of January 1, 2003.
Does this date give employers enough time to make the needed, far-
reaching changes in their health plans, especially if the Department of
Health and Human Services does not have final regulations for at least
several months? Should the effective date be tied to some period after
the issuance of final regulations?
Response: One year after the date this bill is enacted, or 18
months after rules are promulgated, would be appropriate.
______
Response for the Record of E. Neil Trautwein, Director of Employment
Policy, National Association of Manufacturers
questions regarding dsm iv
Dr. Regier's testimony states that the controversy over whether to
incorporate DSM IV into statutory law is a red herring. Many states
that have looked at this issue have chosen to limit any parity
requirements to ``biologically-based'' or ``serious'' mental illness as
they define them. Those states do not require use of DSM IV criteria.
Dr. Regier is asking Congress to incorporate an 800-page manual by
reference in a statute. That would give that document legal standing in
many ways and with many potential consequences. In asking the
Subcommittee to take such a step, we need to fully understand and
resolve all of the attendant controversies. Below are some of the
relevant questions.
Question 1. It would appear from Dr. Regier's testimony that some
believe if a group health plan offers any mental health benefits, H.R.
4066 requires the plan to offer coverage for a comprehensive list of
conditions set out in DSM IV. This reading is stated in the Views of
the Senate Committee on Health Education Labor and Pensions on S. 543,
the Senate analogue to H.R. 4066. This reading, however, is troubling
and not supported by the text. Nothing in H.R. 4066 appears to require
a plan to cover any category of mental health benefits, much less the
long list of ``conditions'' in DSM IV. H.R. 4066 defines mental health
benefits, in part, as:
benefits with respect to services, as defined under the terms
and conditions of the plan or coverage (as the case may be),
for all categories of mental health conditions listed in [DSM
IV]
The reference to DSM IV helps define what is a mental health
benefit. Nowhere in the text, however, does the bill state that group
health plans must provide comprehensive mental health benefits or
provide benefits as broad as the conditions listed in DSM IV. The
Subcommittee's reading is that if a plan provides any given mental
health benefit the parity rules of the bill apply to that category of
benefits. Nothing in the parity rule in proposed section 712(a) states
that a plan must provide coverage for all of the conditions listed in
DSM IV. Indeed, the savings clause language in proposed 712(b)(1) and
(3) state that no mental health benefits are ever required at all; and
that no specific services are ever required, except to the extent
required by the parity rule itself. It is difficult to see how the
parity rule would require any category under DSM IV.
Are you arguing that H.R. 4066 requires mental health plans to
provide coverage for all conditions in DSM IV? If so, please explain
your reading and your reading of the savings clause language, with
specific references to language in the bill. For those that do not
support such a position what clarifications are necessary to assure the
appropriate policy from your prospective?
Response: The NAM agrees that HR 4066 does not require the
provision of any mental health coverage [proposed 712(b)(1)] but
creates a litigation-prone conflict between the savings clause language
in 712(b)(3) and the definition of mental health benefits that leads us
to the conclusion that an employer who offers some but not all mental
health services will be subject to litigation on the basis that the
failure to provide a specific service would result in a disparity
between mental health and medical and surgical benefits.
HR 4066 defines mental health benefits as ``benefits with respect
to services'' as defined under the plan ``for all categories of mental
health conditions'' listed in DSM-IV and later editions ``if such
services are included as part of authorized treatment plan.'' Further,
712(b)(3) provides that a plan need not provide coverage for specific
mental health services, ``except to the extent that the failure to
cover such services would result in a disparity between the coverage of
mental health and medical and surgical benefits.''
Question 2. Is there any precedent in current federal statutes that
says, in effect, that if you provide ANY given service, such as mental
health services that you must cover ALL conditions listed in a manual
prepared by one group of health care professionals? For example, is
there a similar federal law that says that if you provide coverage for
some pharmaceuticals or medical procedures that you must now cover ALL
pharmaceuticals or medical procedures listed in a manual prepared by a
trade association of pharmacists or medical care providers?Response: We
know of no similar precedent or similar delegation of authority to a
group of health care professionals with a proprietary interest in the
development of such manual.
Question 3. Dr. Regier's testimony addresses the categories of DSM
IV referred to as conditions for clinical focus. These include such
items as: sibling relational problem; occupational problem; academic
problem; and religious or spiritual problem. Some of these terms would
apparently apply even if they are not termed ``mental disorders'' under
the manual. For example, V. 62.2 ``Occupational Problem'' states that
the condition need not be a mental disorder. The manual further states
``[e]xamples include job dissatisfaction and uncertainty about career
problems. The manual provides an example of V. 62.3 ``Academic
Problem'' as ``a pattern of failing grades or significant
underachievement in a person with adequate intellectual capacity in the
absence of a Learning or Communication Disorder or any other mental
disorder that would account for this problem.'' Does H.R. 4066
incorporate these conditions even where the manual states that they are
conditions and not mental disorders?
Response: ``Mental Health Benefits'' is defined by HR 4066 as
meaning ``benefits with respect to services . . . for all categories of
mental health conditions listed'' in the DSM-IV. No distinction is
drawn under HR 4066 between conditions and mental disorders.
Question 4. DSM IV category 315.1 is called Mathematics disorder.
One of the diagnostic criteria is that mathematical ability is
substantially below that expected for the person's age and
intelligence. Another criterion is that it significantly interferes
with academic achievement. Are you saying employers must have insurance
to cover diagnosis and treatment for Mathematics disorder?
Response: This is but one example of some of the absurdities
possible under HR 4066. Ironically, many employers sponsor Employee
Assistance Plans (EAP) that can provide assistance to employees and
their families, rendering the overly broad mandate of HR 4066
unnecessary.
Question 5. The DSM IV manual also states criteria to describe
mild, moderate, and severe disorders. Mild disorders or example are
defined as ``[f]ew if any symptoms in excess of those required to make
the diagnosis are present, and symptoms result in no more than minor
impairment in social or occupational functioning.''
Dr. Regier's testimony mentions the term ``clinically significant
impairment.'' Does the universe of clinically significant impairments
include mild disorders and conditions? What specific evidence would be
required to describe a mild version of the following conditions in DSM
IV:
Parent-Child Relational Problem V61.20
Sibling Relational Problem V61.8
Relational Problem Not Otherwise Specified V62.81
Noncompliance with Treatment V15.81
Adult Antisocial Behavior V71.01
Child or Adolescent Antisocial Behavior V71.02
Borderline Intellectual Functioning V62.89
Age-related Cognitive Decline 780.9
Bereavement V62.82
Academic Problem V62.3
Occupational Problem V62.2
Identify Problem 313.82
Religious or Spiritual Problem V62.89
Acculturation Problem V62.4
Phase of Life Problem V62.89
Are all of these conditions to be considered ``clinically
significant impairments''? If so, how is clinical significance
measured?
Also, where in DSM IV is there a discussion of the specific medical
evidence supporting each category?
How would you propose to determine what meets a parity standard
between these mental health conditions and medical conditions?
Question 6. Do you believe that the diagnostic criteria in DSM IV
should have legal standing by virtue of its reference in H.R. 4066, and
if so, for what legal purpose or purposes?
Response: Doing so would set a dangerous precedent by granting
health care professional the ability to change employers' health care
obligations without further intervention by Congress.
Question 7. Could you support language that says that the diagnosis
of a disorder and its treatment must be well established and supported
by substantial scientific evidence?
Question 8. Dr. Regier's testimony says that DSM IV has ``precise''
criteria for diagnoses. Can you please explain category 313.81 called
``oppositional defiant disorder''? The diagnostic criteria require four
among the following:
<bullet> often loses temper
<bullet> often argues with adults
<bullet> often actively defies or refuses to comply with adults request
or rules
<bullet> often deliberately annoys people
<bullet> often blames others for his or her mistakes or behavior
<bullet> is often touchy or easily annoyed by others
<bullet> is often angry and resentful
<bullet> is often spiteful or vindictive
As Dr. Regier notes criteria also requires ``clinically
significant'' impairment. This all seems pretty subjective. Other than
the phrase ``clinically significant'' a lot of teenagers may meet these
other criteria for periods of time. This puts a lot of emphasis on the
phrase ``clinically significant.'' Recognizing that the DSM discusses
clinical significance and states that ``assessing whether this
criterion is met . . . is an inherently difficult clinical judgment'',
is it realistic to establish any objective standards for purposes of
determining what is not clinically significant?
If there is a disagreement with the group health plan over an
individual case, does the beneficiary or provider have the burden to
show a clinically significant impairment?
Question 9. Is it correct that the DSM IV is essentially based on a
1994 classification scheme that may require revisions now? If we
incorporate DSM IV in a statute, how do we propose plans keep up with
advances in the classification and diagnostic system? Do you believe it
is appropriate to delegate this authority to a nongovernmental body?
Since members of the American Psychiatric Association would appear to
benefit financially from broad definitions of coverage, please comment
on whether you believe such a delegation would represent a conflict of
interest. If not, why not?
Response: As previously noted, we know of no similar precedent or
similar delegation of authority to a group of health care professionals
with a proprietary interest in the development of such manual. However
well intentioned the members of the American Psychiatric Association
may be, the inevitable result of this unwarranted delegation of
authority would be an ever expending definition of mental health
conditions and an ever greater expenditure on mental health services
under employer-sponsored health plans.
questions regarding the federal employees health benefits program
Question 10. Dr. Regier's testimony correctly notes the Office of
Personnel Management has issued guidance which refers to DSM IV as an
objective for health plans contracting with the Federal Employee Health
Benefits Program. An initial review of several health insurance plans
under FEHBP showed no reference to DSM IV in the plans available in
2002. Several of the actual plans had a definition of mental health
benefits that referred to certain categories in the International
Classification of Diseases (ICD). Are you aware of plans in FEHBP that
specify DSM IV? What is your opinion of the plans that specified
certain categories of ICD? Please list the differences in the DSM IV
categories and the following language:
``Conditions and diseases listed in the most recent edition of
the [ICD] as psychoses, neurotic disorders, or personality
disorders; other nonpsychotic mental disorders listed in the
ICD, to be determined by us . . .''
Given that actual FEHBP contracts are not using DSM IV, why should
we mandate a change in statute?
Question 11. A survey of FEHBP plans also indicates a number of
exclusions that are not specifically provided for in H.R. 4066. These
include, but are not limited to:
<bullet> counseling or therapy for marital, educational or behavioral
problems
<bullet> services provided under a federal, state or local government
program
<bullet> treatment related to marital discord
<bullet> treatment for learning disabilities and mental retardation
<bullet> all charges for chemical aversion therapy, conditional reflex
treatments, narcotherapy or any similar aversion treatments and
all related charges (including room and board)
<bullet> services by pastoral, marital, or drug/alcohol counselors
<bullet> biofeedback, conjoint therapy, hypnotherapy, interpretation/
preparation of reports
<bullet> services, drugs or supplies related to sexual transformation,
sexual dysfunction and sexual inadequacy
<bullet> experimental or investigational procedures, treatments, drugs
or devices
First, would you support language making clear that all exclusions
like these and others found among FEHBP carriers would be available?
Second, if language were also to refer to the DSM IV, how would you
resolve excluding sexual dysfunction when it is clearly identified in
DSM IV? Finally, under the same circumstances, how would you resolve
excluding marital, educational, and behavioral problems when the DSM IV
includes conditions such as:
Partner Relational Problem V61.1
Academic Problem V62.3
Mathematics disorder 315.1
Attention Deficit Hyperactivity Disorder 314
Child or Adolescent Antisocial Behavior V71.02
Question 12. In a letter to carriers dated April 11, 2001, OPM
emphasizes that managed care behavioral health care organizations
(MBHO) can implement mental health benefits. Where plans do not choose
to use such organizations, OPM recommends approaches such as gatekeeper
referrals to network providers, authorized treatment plans, and pre-
certification of inpatient services. OPM states that plans may limit
parity benefits when patients do not substantially follow their
treatment plans. Do you agree with these recommendations and
allowances? How can compliance with treatment plans be proven?
questions concerning the general parity rule
Question 13. Even outside of mental health benefits, health plans
do not treat all categories of health benefits equally. For example,
outpatient physical therapy, emergency care, specialty care, speech
therapy, occupational care, chiropractic care, and preventive care
often have different limitations than other categories of items or
services. Prescription drugs may also have different categories of co-
payments based on the kind of financial arrangements a plan can arrange
with pharmaceutical companies. Do you consider differences in approach
among these categories to be discrimination against the particular
patients who may use these services? For example, are we allowing
discrimination against those who need dental coverage or chiropractic
care?
Response: If Congress opens the door with HR 4066, then there will
be no limiting principle to constrain other health professions from
making similar demands. We know of no employer who would voluntarily
sponsor health coverage under those circumstances.
Question 14. On page seven of Dr. Regier's written testimony he
claims that the Subcommittee would be outraged if Congress permitted,
among other things, insurers to charge more that twice as much out-of-
pocket for seeing an endocrinologist than for seeing an internist. This
statement is a little unclear. Congress does permit plans to do just
that. There is no current Federal restriction on what a plan should
charge for a visit to an internist versus a specialist. Indeed, plans
often do have different rates and conditions for such things. Is it
your understanding that Federal law prohibits different rates and
categories on the non-mental health side?
Response: No, this is a novel proposal.
Question 15. H.R. 4066 would replace the 1996 parity rule and
change it in a variety of ways. For example, the 1996 language provides
a rule in the case where a plan has different aggregate lifetime limits
on different categories of medical and surgical benefits. The 1996
language also provides a clear option to have overall lifetime and
annual limits that do not distinguish between mental and non-mental
health benefits. These seem like important concepts. Why do proponents
of H.R. 4066 seek to make these changes? Is there any problem with the
current provisions on lifetime and annual limits? Won't these changes
start a new round of reviews for equivalent state laws?
Question 16. Medical and surgical services have different
reimbursement rates. For example, services required for hip replacement
might include surgical fees, MRI fees, hospitalization, and
rehabilitation, each of which may be reimbursed at a different level. A
broken leg might require emergency room services and physical therapy
in addition to physician fees, and again, each of these services might
have still different reimbursement mechanisms.
If this legislation is enacted, health plans would be required to
have the same cost sharing requirement for mental health services as to
comparable non-mental health services covered by the same plan. What
happens if a health plan has one deductible and coinsurance amount for
physician office visits, another one for physical therapy and a third
one for occupational therapy, and a fourth one for preventive services?
How is the health plan supposed to comply in this case? Which one would
apply for treatment of schizophrenia or treatment of sibling rivalry
condition? Wouldn't parity requirements force a revaluation of the
whole system and make billing issues extremely complicated?
Response: inevitably so. Complexity will arise as plans attempt to
comply and as the effect of litigation is felt.
Question 17. Group health plans sometimes provide a tiered
formulary to address drugs. Under such an approach there are different
cost-sharing requirements because the plan was able to get certain
discounts or because of different cost effectiveness. Would such a plan
violate parity rules if the net effect of the plan made certain
psychotherapy drugs to have a higher cost-share? If so, would the
determination be made on a drug-by-drug basis?
Response: Tiered formularies are quite common today. Placement of
psychotherapy pharmaceuticals within tiers might well be the subject of
litigation.
Question 18. Could plans differentiate reimbursement based on
qualifications? For example, a psychiatrist may have a different
reimbursement rate than a psychologist. Could this in any way violate a
parity requirement? Let's assume a group health plan creates outpatient
categories based on whether or not the visit was to someone with a
medical degree--not on whether it was mental illness related or not.
Under H.R. 4066 could such an approach be viewed as discriminatory to
psychologists and, thus, to mental health benefits? That is to say,
could lawyers argue that there is a disparate impact test?
Response: We believe this is a plausible concern.
Question 19. There is a savings clause on Page 8 of H.R. 4066
beginning line 11 under the title (3) NO REQUIREMENT OF SPECIFIC
SERVICES. It states:
Nothing in this section shall be construed as requiring a group
health plan (or health insurance coverage offered in connection
with such a plan) to provide coverage for specific mental
health services, except to the extent that the failure to cover
such services would result in a disparity between the coverage
of mental health and medical and surgical benefits.
This language seems circular. What is the point of the exceptions
clause? Please provide some examples illustrating the intent of this
provision.
Response: We agree that this ``exceptions clause'' will actually
require employers who provide some mental health benefits to cover all
conditions under DSM-IV. It would appear to us that the ``point'' of
this clause is to confuse the reader.
questions concerning medical management provisions
Question 20. The scope of the general parity rule in proposed
712(a) and related provisions are quite confusing. In the section
entitled medical management of mental health, what is meant by the lead
phrase ``consistent with subsection (a)?'' Do you believe a parity rule
should apply to how medical management techniques such as concurrent
and retrospective utilization review or application of medical
necessity and appropriateness criteria must have parity rules applied
when evaluating mental health services? If so, would this mean that
arguments could be made that the failure to find a mental health
benefit necessary or appropriate is legally bound by a comparison to
such a decision for non-mental health benefits? If not, what is the
purpose of the phrase ``consistent with subsection (a)?''
Response: This interplay is quite confusing but would seem to
suggest that medical management techniques are subject to parity
analysis.
Question 21. Under H.R. 4066, treatment limitations include
``limits on the duration or scope of treatment under the plan or
coverage.'' Do you believe this means that decisions to limit the
duration or scope of treatment for therapeutic reasons must be held up
to a parity test? If so, how would this work? If not, why are these
included in the definition of treatment limitations subject to the
parity requirements?
Question 22. Proponents of parity legislation state that plans will
be able to minimize abuse through use of the standard ``medically
necessary and appropriate.'' During the patients' bill of rights debate
it seemed like the emphasis was on getting away from the use of this
standard by plans. In fact, patients' rights legislation all make clear
that plans decide which categories to cover, what exclusions to have,
and what cost-sharing to have. Would this new legislation drive more
``medical necessity'' determinations by plans? Also, patients' rights
legislation, if enacted, would subject such decisions to lawsuits for
damages. Do you favor such lawsuits and what would be the cost of such
suits? In the 40 states that permit external review of denials such
reviews can average more than $600 a case. Wouldn't more qualitative
decisions concerning medical necessity increase these expenditures?
Response: We believe that this legislation would lead to more
medical necessity determinations and consequent liability if a
Patients' Bill of Rights were enacted. The NAM has been one of the
foremost opponents of the Patients' Bill of Rights which--in our view--
could lead to many employers dropping health coverage. We would
certainly recommend that our members take that action if a Patients'
Bill of Rights were enacted.
questions concerning costs increases and potential decreases in
insurance coverage
Question 23. Dr. Cutler's testimony notes that the California
Public Employees Retirement System has reported that mental health
parity legislation would cause premiums for its two PPO options to
increase by 3.3 and 2.7 percent, respectively, in 2003. Dr. Cutler also
notes that a 1998 study commissioned by the Substance Abuse and Mental
Health Services Administration estimated that a mental health parity
law would increase premiums by and average of 3.4 percent. Has your
organization reviewed these studies? Does your organization disagree
with them, and if so, on what points?
Response: We believe the CALPERS and SAMSHA findings are borne out
by CBO's clarification of July 12, 2002.
Question 24. CBO estimates that H.R. 4066, if enacted, would
increase premiums for group health insurance by an average of 0.9
percent, before accounting for the responses of health plans,
employers, and workers to the higher premiums under the bill. On July
12, 2002, CBO issued some clarifications of this estimate. CBO notes
that the 0.9% premium increase is a weighted average of both affected
and unaffected plans. According to CBO, affected plans would experience
and increase of between 30 and 70 percent of their mental health costs.
Do you consider these costs to be substantial and do you believe some
employers may choose to not offer mental health benefits?
Response: These cost increases are substantial and troubling in the
current climate of rapidly increasing insurance premiums. An increase
of 30-70% in mental health costs could easily lead to premium increases
of 2-3% or more. While such an increase itself might not be
determinative, both employers and employees are increasingly being
priced out of coverage. We can afford no new mandates, much less as
significant a mandate as is proposed by HR 4066.
Question 25. CBO also assumes that responses to cost increases from
affected firms might include reductions in the number of employers
offering insurance to their employees and in the number of employees
enrolling in employer-sponsored insurance, changes in the types of
health plans that are offered, and reductions in the scope or
generosity of health insurance benefits, such as increased deductibles
or higher co-payments. Do you agree with these assumptions?
Response: Without a doubt. Such reductions in benefits and increase
in employee responsibility are already quite common in light of current
cost increases.
Question 26. CBO estimates two categories that would need to be
offset by the budget resolution. First, CBO estimates that the
resulting reduction in taxable income would grow from $1.0 billion in
calendar year 2002 to $2.3 billion in 2011. Those reductions in
workers' taxable compensation would lead to lower federal tax revenues.
CBO estimates that federal tax revenues would fall by $230 million in
2002 and by $5.4 billion over the 2002-2011 period if H.R. 4066 were
enacted. Second, CBO also stated the cost of federal spending on
Medicaid and S-CHIP to the cost of the bill. CBO estimates this bill
will cost those programs about $30 million in 2002 and $600 million
over the 2002-2011 period.
Have supporters of H.R. 4066 provided specific means of offsetting
these figures--whether through increased taxes or reductions in other
spending?
Response: They have not to our understanding.
Question 27. A study conducted by the UCLA/RAND Research Center on
Managed Care found that techniques to intensively manage care,
including the use of provider networks and case management, is critical
to appropriate utilization and maintaining costs. Various estimates
have found a different cost increase depending on the amount of managed
care involved. Costs are higher when a group health plan offers a non-
managed health care plan to its employees. Is it not more likely that
where a health plan is not a managed care plan that its mental health
care costs are likely to be higher if this legislation is enacted? What
are the potential dangers to the quality of care if health plans are
unable to manage mental health benefits successfully as they are
currently able to do? Is it possible to contract with all potential
providers of mental health care?
Response: These are all legitimate concerns under HR 4066. The
irony is that workers and dependents may find mental health services
harder to come by if HR 4066 were enacted.
Question 28. I understand that an independent analysis was done a
couple years ago by the Lewin Group that concluded that for every one
percent increase in health care costs (beyond the normal rate of health
inflation) an additional 300,000 Americans lose their health care
coverage. I assume some of those lose their coverage because their
employers simply stop offering health insurance at some point. Is it
not also correct that many more lose their coverage, though, because
they cannot afford it themselves as the price goes up and up? Is it
possible that some employers may simply decide to drop mental health
coverage entirely if this legislation is enacted? If so, what sorts of
companies might be forced to make such a drastic decision in your
opinion?
Response: Although the offer rate of employers to employees remains
strong (indeed, 98% of NAM members offer coverage to their workers) the
rate at which employees accepts coverage (take-up rate) is declining in
light of rising costs and greater employee responsibility for coverage.
Some employers might well drop mental health services rather than offer
the gamut of conditions under DSM-IV. Employers of all sizes may face
this choice, but smaller employers with more than 50 employees will be
particularly apt to do so.
Question 29. (a) On page six of Dr. Regier's testimony, he quotes
someone who states ``insurers tend to provide poor mental health
benefits in order to avoid [enrollees with mental disorders].'' It is
difficult to understand this claim in the current context or in
general. In the group market, insurers are not selling to individuals
at all, but to groups. Under ERISA there is no ability to look at or
discriminate based on the conditions of individuals. Is there any
further basis for the above claim?
Response: This assertion is highly implausible. Employers offer
good quality health benefits (including mental health benefits) to
attract workers and insurers and HMOs who wish to contract with
employers must meet the needs of the employer-designed health plan.
Insurers cannot selectively provide coverage to some but not all
employees.
Question (b) Dr. Regier further notes that insurers shift costs
from insurers to employers who are not able to take advantage of the
market. This too is hard to comprehend. Employers purchase insurance,
so, of course, the costs are shifted to the purchaser. Employers,
however, can choose from among insurance products in a free market. Dr.
Regier then states: ``In effect, insurers are subverting responsible
employers by segmenting risk and costs and shifting the obligation of
mental health coverage onto an already overburdened public sector.''
Most employer groups that I am aware of oppose this parity legislation.
Some employers provide broader insurance coverage, some provide less,
and others not at all. Some employers who provide coverage now may be
forced to drop this benefit if costs go up too much. Is there any
further basis for the statement that employers are not able to take
advantage of the market or that insurers are subverting responsible
employers?
Response: There is absolutely no basis for Dr. Regier's assertion
other than a baseless prejudice against the insurance industry. The
NAM, most employer groups and most employers oppose this proposed
mandate.
Question 30. Dr. Regier states there is no objective evidence that
businesses are paying for peripheral conditions to any statistically
significant degree. That is, of course, because there is no law
compelling that they cover such conditions. On page ten of Dr. Regier's
written testimony he states that `` `malingering' is no more likely to
be covered in a post parity world than it is today.'' Can you provide
an example of clinically significant malingering, and reasons as to why
employers should be forced to cover this condition? Dr. Regier also
states ``it is remarkable that an insurance industry that has
historically sought to avoid responsibility for treating severe mental
disorders is today expressing concern that only severely mentally ill
patients should be covered by parity legislation.'' Please comment on
the basis for this statement.
question concerning compliance times
Question 31. H.R. 4066 has an effective date of January 1, 2003.
Does this date give employers enough time to make the needed, far-
reaching changes in their health plans, especially if the Department of
Health and Human Services does not have final regulations for at least
several months? Should the effective date be tied to some period after
the issuance of final regulations?
Response: This would not be a sufficient period to make changes in
health plans, most of which were set during the preceding summer. A
better approach would delay enforcement until final regulations are
issued or in any case, in the following plan year.
______
Response for the record of Charles M. Cutler, Chief Medical Officer,
American Association of Health Plans
questions regarding dsm iv
Question 1. It would appear from Dr. Regier's testimony that some
believe if a group health plan offers any mental health benefits, H.R.
4066 requires the plan to offer coverage for a comprehensive list of
conditions set out in DSM IV. This reading is stated in the Views of
the Senate Committee on Health Education Labor and Pensions on S. 543,
the Senate analogue to H.R. 4066. This reading, however, is troubling
and not supported by the text. Nothing in H.R. 4066 appears to require
a plan to cover any category of mental health benefits, much less the
long list of ``conditions'' in DSM IV. H.R. 4066 defines mental health
benefits, in part, as:
benefits with respect to services, as defined under the terms
and conditions of the plan or coverage (as the case may be),
for all categories of mental health conditions listed in [DSM
IV]
The reference to DSM IV helps define what is a mental health
benefit. Nowhere in the text, however, does the bill state that group
health plans must provide comprehensive mental health benefits or
provide benefits as broad as the conditions listed in DSM IV. The
Subcommittee's reading is that if a plan provides any given mental
health benefit the parity rules of the bill apply to that category of
benefits. Nothing in the parity rule in proposed section 712(a) states
that a plan must provide coverage for all of the conditions listed in
DSM IV. Indeed, the savings clause language in proposed 712(b)(1) and
(3) state that no mental health benefits are ever required at all; and
that no specific services are ever required, except to the extent
required by the parity rule itself. It is difficult to see how the
parity rule would require any category under DSM IV.
Are you arguing that H.R. 4066 requires mental health plans to
provide coverage for all conditions in DSM IV? If so, please explain
your reading and your reading of the savings clause language, with
specific references to language in the bill. For those that do not
support such a position what clarifications are necessary to assure the
appropriate policy from your prospective?
ANSWER: Due to ambiguity in the bill's language, one interpretation
of H.R. 4066 is that it could require parity for all conditions listed
in the most recent edition of the DSM (except substance abuse). This
would include biologically based and severe mental illnesses, as well
as numerous conditions such as jet lag, and academic, occupational, and
religious problems.
Because the bill specifically states that any exclusions of
coverage of mental health services may not result in a ``disparity''
between coverage of mental health and medical surgical benefits, the
bill could have the effect of requiring coverage for all disorders and
conditions listed in the DSM since one could claim that any coverage
exclusion of a mental health disorder or condition would result in a
disparity.
Question 2. Is there any precedent in current federal statutes that
says, in effect, that if you provide ANY given service, such as mental
health services that you must cover ALL conditions listed in a manual
prepared by one group of health care professionals? For example, is
there a similar federal law that says that if you provide coverage for
some pharmaceuticals or medical procedures that you must now cover ALL
pharmaceuticals or medical procedures listed in a manual prepared by a
trade association of pharmacists or medical care providers?
ANSWER: We are not aware of any examples of mandating the coverage
of all services listed in a particular manual. HIPAA mandates the use
of a standard code set such as the ICD9 (International Classification
of Disease), CPT (Current Procedural Terminology), NDC (National Drug
Codes) or HCPCS (Health Care Common Procedure Coding System). These
code sets are used to describe the service provided and the diagnosis,
but there is no mandate that all of the codes be covered. Purchasers
such as individuals, private employers and federal, state, and local
governments purchase the level of benefits that best meet their needs.
Furthermore, in the case of the DSM-IV there also is an inherent
conflict of interest in mandating its use as a determination of
coverage. The American Psychiatric Association determines the content
of the DSM and its members will benefit from any use of the DSM as a
determinant of coverage.
Question 3. Dr. Regier's testimony addresses the categories of DSM
IV referred to as conditions for clinical focus. These include such
items as: sibling relational problem; occupational problem; academic
problem; and religious or spiritual problem. Some of these terms would
apparently apply even if they are not termed ``mental disorders'' under
the manual. For example, V. 62.2 ``Occupational Problem'' states that
the condition need not be a mental disorder. The manual further states
``[e]xamples include job dissatisfaction and uncertainty about career
problems. The manual provides an example of V. 62.3 ``Academic
Problem'' as ``a pattern of failing grades or significant
underachievement in a person with adequate intellectual capacity in the
absence of a Learning or Communication Disorder or any other mental
disorder that would account for this problem.'' Does H.R. 4066
incorporate these conditions even where the manual states that they are
conditions and not mental disorders?
ANSWER: We believe that because the bill defines mental health
benefits as ``all categories of mental health conditions'' listed in
the DSM (except substance abuse) the bill incorporates the conditions
listed in the DSM, such as sibling relational problem, occupational
problem, academic problem and religious or spiritual problem, in
addition to all of the mental disorders listed in the DSM.
Question 4. DSM IV category 315.1 is called Mathematics disorder.
One of the diagnostic criteria is that mathematical ability is
substantially below that expected for the person's age and
intelligence. Another criterion is that it significantly interferes
with academic achievement. Are you saying employers must have insurance
to cover diagnosis and treatment for Mathematics disorder?
ANSWER: See answer to questions #1 and #3. Because the bill could
be interpreted as requiring parity for all conditions in the DSM and
because the DSM includes Mathematics disorder, it could be construed
that insurance coverage would be required to include coverage for the
diagnosis and treatment of Mathematics disorder.
Question 5. The DSM IV manual also states criteria to describe
mild, moderate, and severe disorders. Mild disorders or example are
defined as ``[f]ew if any symptoms in excess of those required to make
the diagnosis are present, and symptoms result in no more than minor
impairment in social or occupational functioning.''
Dr. Regier's testimony mentions the term ``clinically significant
impairment.'' Does the universe of clinically significant impairments
include mild disorders and conditions? What specific evidence would be
required to describe a mild version of the following conditions in DSM
IV:
Parent-Child Relational Problem V61.20
Sibling Relational Problem V61.8
Relational Problem Not Otherwise Specified V62.81
Noncompliance with Treatment V15.81
Adult Antisocial Behavior V71.01
Child or Adolescent Antisocial Behavior V71.02
Borderline Intellectual Functioning V62.89
Age-related Cognitive Decline 780.9
Bereavement V62.82
Academic Problem V62.3
Occupational Problem V62.2
Identify Problem 313.82
Religious or Spiritual Problem V62.89
Acculturation Problem V62.4
Phase of Life Problem V62.89
Are all of these conditions to be considered ``clinically
significant impairments''? If so, how is clinical significance
measured?
Also, where in DSM IV is there a discussion of the specific medical
evidence supporting each category?
How would you propose to determine what meets a parity standard
between these mental health conditions and medical conditions?
ANSWER: Many of the diagnoses in the DSM IV describe what for most
people are normal, routine life situations, such as parent-child
relationship problems, academic problems or occupational problems.
Because there is no clear and consistent definition of ``clinically
significant,'' what constitutes something outside the norm and needing
treatment is left up to the subjective interpretation of providers.
Furthermore, given that H.R. 4066 prohibits ``disparity'' between
mental health and medical/surgical services and ``disparity'' is not
defined in the bill, it would be difficult to determine what meets the
parity standard and what does not. Arguably any differences in the
administration of the mental health benefit versus the medical/surgical
benefit could be construed as a disparity and therefore in violation of
the parity requirement.
Question 6. Do you believe that the diagnostic criteria in DSM IV
should have legal standing by virtue of its reference in H.R. 4066, and
if so, for what legal purpose or purposes?
ANSWER: The DSM was designed to be used for clinical, research,
administrative and educational purposes. By codifying the DSM, H.R.
4066 would create a tremendous conflict of interest with respect to the
group of professionals responsible for developing this directory of
conditions. Congress should be troubled by the prospect of codifying a
manual developed by a non-governmental body that was never intended to
be the standard for insurance coverage. The American Psychiatric
Association determines the content of the DSM and its members will
benefit from its codification.
Question 7. Could you support language that says that the diagnosis
of a disorder and its treatment must be well established and supported
by substantial scientific evidence?
ANSWER: Health plans have long supported the use of evidence-based
medicine and have done so in the absence of legislative requirements.
The Institute of Medicine recently articulated that it should be one of
our nation's goals to move towards a more evidence-based system of
health care delivery.
Question 8. Dr. Regier's testimony says that DSM IV has ``precise''
criteria for diagnoses. Can you please explain category 313.81 called
``oppositional defiant disorder''? The diagnostic criteria require four
among the following:
<bullet> often loses temper
<bullet> often argues with adults
<bullet> often actively defies or refuses to comply with adults request
or rules
<bullet> often deliberately annoys people
<bullet> often blames others for his or her mistakes or behavior
<bullet> is often touchy or easily annoyed by others
<bullet> is often angry and resentful
<bullet> is often spiteful or vindictive
As Dr. Regier notes criteria also requires ``clinically
significant'' impairment. This all seems pretty subjective. Other than
the phrase ``clinically significant'' a lot of teenagers may meet these
other criteria for periods of time. This puts a lot of emphasis on the
phrase ``clinically significant.'' Recognizing that the DSM discusses
clinical significance and states that ``assessing whether this
criterion is met . . . is an inherently difficult clinical judgment'',
is it realistic to establish any objective standards for purposes of
determining what is not clinically significant?
If there is a disagreement with the group health plan over an
individual case, does the beneficiary or provider have the burden to
show a clinically significant impairment?
ANSWER: As mentioned in our answer to question #5, we agree that
trying to decide when the ``clinically significant'' criteria in the
DSM are met would be difficult. The term is open to tremendous
interpretation and will ultimately vary in any given situation, for
each diagnosis and across providers. Given the disagreements that will
undoubtedly occur among providers as to what a clinically significant
impairment is, referring to health plans' coverage policies which are
designed to promote evidence-based medicine, is the most appropriate
way of resolving any conflicting opinions with respect to medical
necessity. Furthermore, it should be noted that if an enrollee is not
satisfied with a health plan's medical necessity determination, 41
states plus the District of Columbia allow for the independent medical
review of such determinations.
Question 9. Is it correct that the DSM IV is essentially based on a
1994 classification scheme that may require revisions now? If we
incorporate DSM IV in a statute, how do we propose plans keep up with
advances in the classification and diagnostic system? Do you believe it
is appropriate to delegate this authority to a nongovernmental body?
Since members of the American Psychiatric Association would appear to
benefit financially from broad definitions of coverage, please comment
on whether you believe such a delegation would represent a conflict of
interest. If not, why not?
ANSWER: H.R. 4066 requires coverage as outlined in the most recent
DSM, therefore indicating that the fourth and most current version of
the DSM is open to revision.
As previously stated, we believe that codifying the DSM would
create a tremendous conflict of interest with respect to the group of
professionals responsible for developing this directory of conditions.
Not only was the DSM never intended to be the standard for insurance
coverage, but the American Psychiatric Association determines the
content of the DSM and its members will benefit from its codification.
questions regarding the federal employees health benefits program
Question 10. Dr. Regier's testimony correctly notes the Office of
Personnel Management has issued guidance which refers to DSM IV as an
objective for health plans contracting with the Federal Employee Health
Benefits Program. An initial review of several health insurance plans
under FEHBP showed no reference to DSM IV in the plans available in
2002. Several of the actual plans had a definition of mental health
benefits that referred to certain categories in the International
Classification of Diseases (ICD). Are you aware of plans in FEHBP that
specify DSM IV? What is your opinion of the plans that specified
certain categories of ICD? Please list the differences in the DSM IV
categories and the following language:
``Conditions and diseases listed in the most recent edition of
the [ICD] as psychoses, neurotic disorders, or personality
disorders; other nonpsychotic mental disorders listed in the
ICD, to be determined by us . . .''
Given that actual FEHBP contracts are not using DSM IV, why should
we mandate a change in statute?
ANSWER: Both the ICD and the DSM are code manuals. As mentioned
previously, we are not aware of any examples of mandating the coverage
of all services listed in a particular manual. Purchasers such as
individuals, private employers and federal, state, and local
governments purchase the level of benefits that best meets their needs.
Question 11. A survey of FEHBP plans also indicates a number of
exclusions that are not specifically provided for in H.R. 4066. These
include, but are not limited to:
<bullet> counseling or therapy for marital, educational or behavioral
problems
<bullet> services provided under a federal, state or local government
program
<bullet> treatment related to marital discord
<bullet> treatment for learning disabilities and mental retardation
<bullet> all charges for chemical aversion therapy, conditional reflex
treatments, narcotherapy or any similar aversion treatments and
all related charges (including room and board)
<bullet> services by pastoral, marital, or drug/alcohol counselors
<bullet> biofeedback, conjoint therapy, hypnotherapy, interpretation/
preparation of reports
<bullet> services, drugs or supplies related to sexual transformation,
sexual dysfunction and sexual inadequacy
<bullet> experimental or investigational procedures, treatments, drugs
or devices
First, would you support language making clear that all exclusions
like these and others found among FEHBP carriers would be available?
Second, if language were also to refer to the DSM IV, how would you
resolve excluding sexual dysfunction when it is clearly identified in
DSM IV? Finally, under the same circumstances, how would you resolve
excluding marital, educational, and behavioral problems when the DSM IV
includes conditions such as:
Partner Relational Problem V61.1
Academic Problem V62.3
Mathematics disorder 315.1
Attention Deficit Hyperactivity Disorder 314
Child or Adolescent Antisocial Behavior V71.02
ANSWER: Current law allows health plans and employers the
flexibility to design a mental health benefits package that best meets
the needs of their specific member or employee populations. Mandating
coverage of all conditions in the DSM would undermine that flexibility.
As a purchaser, FEHBP has designed a benefit package that excludes
coverage of certain disorders. We believe that private plans and
employers should retain maximum flexibility in benefit design.
Question 12. In a letter to carriers dated April 11, 2001, OPM
emphasizes that managed care behavioral health care organizations
(MBHO) can implement mental health benefits. Where plans do not choose
to use such organizations, OPM recommends approaches such as gatekeeper
referrals to network providers, authorized treatment plans, and pre-
certification of inpatient services. OPM states that plans may limit
parity benefits when patients do not substantially follow their
treatment plans. Do you agree with these recommendations and
allowances? How can compliance with treatment plans be proven?
ANSWER: As OPM and the private sector have realized, managed
behavioral health benefits have enabled more Americans to receive
affordable, quality mental health care. As evidenced by AAHP's 2002
Industry Survey results, patients with mental illnesses increasingly
have direct access to mental health services and have benefited from
disease management, care managers, preventive screening, treatment
plans, evidence-based guidelines, and quality measurement. H.R. 4066
would impede the very medical management tools that have made mental
health services more affordable and enabled employers to expand mental
health benefits.
We are concerned that H.R. 4066 could be construed to preclude the
use of many of these tools unless comparable tools are used on the
medical/surgical side. If Congress were to preclude the utilization of
these tools with respect to mental health benefits, it would have a
direct impact on employees and the choices that employers can offer.
questions concerning the general parity rule
Question 13. Even outside of mental health benefits, health plans
do not treat all categories of health benefits equally. For example,
outpatient physical therapy, emergency care, specialty care, speech
therapy, occupational care, chiropractic care, and preventive care
often have different limitations than other categories of items or
services. Prescription drugs may also have different categories of co-
payments based on the kind of financial arrangements a plan can arrange
with pharmaceutical companies. Do you consider differences in approach
among these categories to be discrimination against the particular
patients who may use these services? For example, are we allowing
discrimination against those who need dental coverage or chiropractic
care?
ANSWER: It is true that employers and health plans oftentimes have
different cost sharing and other requirements for different types of
medical and surgical services. One of the difficulties in implementing
the provisions of H.R. 4066 would be in determining what to apply the
parity rule to. In other words, if a plan generally covers unlimited
outpatient office visits, but limits rehabilitative therapy services to
50 visits, which standard would apply? If the plan charges a $15
copayment for primary care office visits, $30 for a specialty care
office visit, but charges no copayment for preventive care, what would
be the comparable copayment standards on the mental health side? Being
able to maintain flexibility in constructing and managing medical/
surgical and mental health benefits is critical to providing affordable
benefits and promoting appropriate care.
Question 14. On page seven of Dr. Regier's written testimony he
claims that the Subcommittee would be outraged if Congress permitted,
among other things, insurers to charge more than twice as much out-of-
pocket for seeing an endocrinologist than for seeing and internist.
This statement is a little unclear. Congress does permit plans to do
just that. There is no current Federal restriction on what a plan
should charge for a visit to an internist versus a specialist. Indeed,
plans often do have different rates and conditions for such things. Is
it your understanding that Federal law prohibits different rates and
categories on the non-mental health side?
ANSWER: Within certain parameters (e.g., HIPAA rules), federal law
generally provides private employers and plans with flexibility to
design their benefits and provider networks.
Question 15. H.R. 4066 would replace the 1996 parity rule and
change it in a variety of ways. For example, the 1996 language provides
a rule in the case where a plan has different aggregate lifetime limits
on different categories of medical and surgical benefits. The 1996
language also provides a clear option to have overall lifetime and
annual limits that do not distinguish between mental and non-mental
health benefits. These seem like important concepts. Why do proponents
of H.R. 4066 seek to make these changes? Is there any problem with the
current provisions on lifetime and annual limits? Won't these changes
start a new round of reviews for equivalent state laws?
ANSWER: The 1996 law provides health plans and employers greater
flexibility than H.R. 4066 does to design mental health benefits that
best meet the needs of their members and employees because it does not
mandate coverage of specific conditions and allows medical management
techniques to be used to help manage care and control costs. While
proponents of H.R. 4066 have maintained that the bill does not require
plans and employers to cover any specific mental health service and
would, in fact, permit exclusions of mental health services from
coverage, the reality is quite different.
First, as we have stated in previous answers, it is our
interpretation that H.R. 4066 could require parity for all conditions
listed in the most recent edition of the DSM. This would include
biologically-based and severe mental illnesses, as well as numerous
disorders and conditions of questionable evidence such as jet lag, and
academic, occupational, and religious problems. The ``clinically
significant'' standard the DSM sets out is tremendously broad and
subject to variance in interpretation. Therefore, such criteria does
not provide any clear standard by which to determine coverage, thus, in
effect, requiring plans to cover all conditions in the most recent
version of the DSM.
Additionally, the bill clearly states that any exclusions of
coverage of mental health services may not result in a ``disparity''
between coverage of mental health and medical surgical benefits.
``Disparity'' is not defined, leaving its meaning, and its
implications, ambiguous and undermining any flexibility for plans and
employers to design mental health benefits that best meet the needs of
their enrollees and employees.
And finally, it is important to note that a number of states
require plans to cover certain mental health conditions, but permit
differences in cost-sharing and other limitations. In these instances,
the plan would be mandated to cover mental health benefits under state
law, but any allowance to use different financial and visit limitations
would be overruled by the federal law to cover those mandated benefits
on par with medical/surgical benefits.
Question 16. Medical and surgical services have different
reimbursement rates. For example, services required for hip replacement
might include surgical fees, MRI fees, hospitalization, and
rehabilitation, each of which may be reimbursed at a different level. A
broken leg might require emergency room services and physical therapy
in addition to physician fees, and again, each of these services might
have still different reimbursement mechanisms. If this legislation is
enacted, health plans would be required to have the same cost sharing
requirement for mental health services as to comparable non-mental
health services covered by the same plan. What happens if a health plan
has one deductible and coinsurance amount for physician office visits,
another one for physical therapy and a third one for occupational
therapy, and a fourth one for preventive services? How is the health
plan supposed to comply in this case? Which one would apply for
treatment of schizophrenia or treatment of sibling rivalry condition?
Wouldn't parity requirements force a revaluation of the whole system
and make billing issues extremely complicated?
ANSWER: See answer to question #13.
Question 17. Group health plan sometimes provide a tiered formulary
to address drugs. Under such an approach there are different cost-
sharing requirements because the plan was able to get certain discounts
or because of different cost effectiveness. Would such a plan violate
parity rules if the net effect of the plan made certain psychotherapy
drugs to have a higher cost-share? If so, would the determination be
made on a drug-by-drug basis?
ANSWER: We believe different cost-sharing requirements, including
those that are part of a tiered formulary, could indeed be construed to
violate the parity rule. At the very least, this ambiguity would be the
subject of costly litigation. See also answer to question #13.
Question 18. Could plans differentiate reimbursement based on
qualifications? For example, a psychiatrist may have a different
reimbursement rate than a psychologist. Could this in any way violate a
parity requirement? Let's assume a group health plan creates outpatient
categories based on whether or not the visit was to someone with a
medical degree--not on whether it was mental illness related or not.
Under H.R. 4066 could such an approach be viewed as discriminatory to
psychologists and, thus, to mental health benefits? That is to say,
could lawyers argue that there is a disparate impact test?
ANSWER: Our interpretation of H.R. 4066 is that any ``disparity''
could violate the parity requirement. The likely result of this bill
will be a tremendous increase in litigation over what constitutes
``disparity.''
Question 19. There is a savings clause on Page 8 of H.R. 4066
beginning line 11 under the title (3) NO REQUIREMENT OF SPECIFIC
SERVICES. It states:
Nothing in this section shall be construed as requiring a group
health plan (or health insurance coverage offered in connection
with such a plan) to provide coverage for specific mental
health services, except to the extent that the failure to cover
such services would result in a disparity between the coverage
of mental health and medical and surgical benefits.
This language seems circular. What is the point of the exceptions
clause? Please provide some examples illustrating the intent of this
provision.
ANSWER: The phrase ``except to the extent that the failure to cover
such services would result in a disparity between the coverage of
mental health and medical and surgical benefits'' undermines the entire
rule of construction. This circular language could be read to, in
effect, require plans to cover every condition and disorder listed in
the DSM, since any exclusions could result in charges of disparity.
This language could also be construed to include differences in
medical management techniques.
As mentioned previously, health plan medical management techniques
have enabled more Americans to receive affordable, quality mental
health care. H.R. 4066 could impede the very medical management tools
that have enabled employers to expand mental health benefits by making
them affordable. Including this circular language in legislation could
ultimately preclude the utilization of these tools and will have a
direct impact on employees and the choices that employers can offer.
questions concerning medical management provisions
Question 20. The scope of the general parity rule in proposed
712(a) and related provisions are quite confusing. In the section
entitled medical management of mental health, what is meant by the lead
phrase ``consistent with subsection (a)?'' Do you believe a parity rule
should apply to how medical management techniques such as concurrent
and retrospective utilization review or application of medical
necessity and appropriateness criteria must have parity rules applied
when evaluating mental health services? If so, would this mean that
arguments could be made that the failure to find a mental health
benefit necessary or appropriate is legally bound by a comparison to
such a decision for non-mental health benefits? If not, what is the
purpose of the phrase ``consistent with subsection (a)?''
ANSWER: We are concerned that H.R. 4066 would apply its parity rule
to medical management techniques by requiring that medical management
of mental health benefits be ``comparable'' to that used for medical/
surgical benefits. While this sounds harmless enough, there are
oftentimes differences in how the techniques are used for the
management of medical/surgical and mental health benefits.
Medical/surgical care for many diseases have more clear and
specific care plans, milestones and outcome measures. For example, most
hospitals have specific care plans for bypass surgery based on the
ideal clinical protocol, measures of the patient's heart and lung
functions, and the specific care needed to reach the best outcome.
However, this is not the case for many mental health conditions. The
timeline, steps in treatment, milestones and outcomes are much less
well defined, more difficult to measure and more subjective than on the
medical/surgical side. When an individual has heart surgery, we know
when the heart is functioning well by using standard clinical and
laboratory measures. Progress in treating mental health conditions is
evaluated using more subjective physician and patient self-assessment
or a patient's ability to perform activities of daily living.
Therefore, health plans need the flexibility to manage mental health
benefits differently in order to ensure that the patient is receiving
the most appropriate care possible. More frequent use of treatment
plans, care managers, and other management techniques are often
necessary to ensure that patients are getting the most appropriate care
for the condition, yet it is not clear that this would continue to be
permitted under H.R. 4066.
Question 21. Under H.R. 4066, treatment limitations include
``limits on the duration or scope of treatment under the plan or
coverage.'' Do you believe this means that decisions to limit the
duration or scope of treatment for therapeutic reasons must be held up
to a parity test? If so, how would this work? If not, why are these
included in the definition of treatment limitations subject to the
parity requirements?
ANSWER: Our interpretation of the bill language is that treatment
limitations, including limits on the duration or scope of treatment,
must be held to the parity test set out in H.R. 4066. However,
implementation of this provision could be quite difficult. For example,
the phrase ``or other similar treatment limits on the duration or scope
of treatment'' could conceivably include medical management activities,
which would then be in conflict with the bill's rule of construction
purporting to permit medical management.
Question 22. Proponents of parity legislation state that plans will
be able to minimize abuse through use of the standard ``medically
necessary and appropriate.'' During the patients' bill of rights debate
it seemed like the emphasis was on getting away from the use of this
standard by plans. In fact, patients' rights legislation all make clear
that plans decide which categories to cover, what exclusions to have,
and what cost-sharing to have. Would this new legislation drive more
``medical necessity'' determinations by plans? Also, patients' rights
legislation, if enacted, would subject such decisions to lawsuits for
damages. Do you favor such lawsuits and what would be the cost of such
suits? In the 40 states that permit external review of denials such
reviews can average more than $600 a case. Wouldn't more qualitative
decisions concerning medical necessity increase these expenditures?
ANSWER: As mentioned previously, it is not clear whether H.R. 4066
would permit plans to use medical management techniques, including the
application of medical necessity criteria, differently on the mental
health side versus the medical/surgical side. One likely outcome of the
ambiguity created in H.R. 4066 is an increase in lawsuits that would
only be exacerbated if patient's rights legislation that included
expanded liability were enacted. Expanded liability will only end up
diminishing the quality of medical care and substantially add to health
care costs. In fact, a 2001 AAHP survey found that physicians believe
the current medical liability system is unfair, raises costs, leads to
defensive medicine, hurts patient relationships, reduces reporting of
medical errors and does not improve quality care. Given these effects
of physician liability, enacting legislation that will lead to
increased litigation is not in anyone's best interest.
questions concerning costs increases and potential decreases in
insurance coverage
Question 23. Dr. Cutler's testimony notes that the California
Public Employees Retirement System has reported that mental health
parity legislation would cause premiums for its two PPO options to
increase by 3.3 and 2.7 percent, respectively, in 2003. Dr. Cutler also
notes that a 1998 study commissioned by the Substance Abuse and Mental
Health Services Administration estimated that a mental health parity
law would increase premiums by and average of 3.4 percent. Has your
organization reviewed these studies? Does your organization disagree
with them, and if so, on what points?
ANSWER: In addition to the cost estimates referenced above, there
are other cost estimates that show these numbers are consistent with
other state experiences with respect to mental health. For example:
<bullet> In 2000, a South Carolina fiscal note estimated an increase in
premiums of 3.2% if S. 1041 were enacted. S. 1041 mandated
mental health and substance abuse coverage and required parity
of financial limitations between mental health and medical/
surgical benefits.
<bullet> In 1997, the National Center for Policy Analysis estimated
costs for mental health benefits would increase the cost of
health insurance by 5-10%.
Question 24. CBO estimates that H.R. 4066, if enacted, would
increase premiums for group health insurance by an average of 0.9
percent, before accounting for the responses of health plans,
employers, and workers to the higher premiums under the bill. On July
12, 2002, CBO issued some clarifications of this estimate. CBO notes
that the 0.9% premium increase is a weighted average of both affected
and unaffected plans. According to CBO, affected plans would experience
an increase of between 30 and 70 percent of their mental health costs.
Do you consider these costs to be substantial and do you believe some
employers may choose to not offer mental health benefits?
ANSWER: We believe that the CBO estimate does not reflect the true
costs of the bill, in part because CBO relied on the experience in
FEHBP, which had less than one year of experience with complying with
mental health parity requirements at the time of the CBO estimate.
Furthermore, as shown by the cost estimates provided in our testimony
and in the answer to question #23, the CBO estimate does not fall in
line with other estimates. However, even if the CBO estimate did
reflect the true costs of the bill, it is important to point out that
even this relatively small increase would result in nearly 300,000
additional Americans losing their health insurance. (The Lewin Group,
1999)
The CBO clarification is significant because it makes clear that
affected plans would experience an increase of between 30 and 70
percent of their mental health costs.
It is important to note that in April of this year,
PricewaterhouseCoopers (PwC) conducted a study of the factors fueling
rising health care costs. The PwC study concluded that, of the 13.7%
increase in health insurance premiums experienced by large employers
between 2001 and 2002, government mandates, increased litigation, and
fraud and abuse accounted for over a quarter of new spending. Given the
significant mandate that would be imposed by H.R. 4066, not to mention
the potential for increased litigation and fraud and abuse due to
ambiguous bill language, we believe that H.R. 4066 could increase costs
more than CBO estimates. While we cannot speak for employers, it is
clear that with costs on the rise, employers will be forced to make
tough decisions with respect to the health benefits they offer their
employees.
Question 25. CBO also assumes that responses to cost increases from
affected firms might include reductions in the number of employers
offering insurance to their employees and in the number of employees
enrolling in employer-sponsored insurance, changes in the types of
health plans that are offered, and reductions in the scope or
generosity of health insurance benefits, such as increased deductibles
or higher co-payments. Do you agree with these assumptions?
ANSWER: Again, while we cannot speak for the employers, it is not
unreasonable to assume or expect that rising health care costs will
force employers to make some tough decisions with respect to the health
care benefits they offer their employees. These actions could come in
the form of reductions in the number of employers offering health
insurance, reductions in the types of health plans and benefits
offered, and even elimination of some or all of the health benefits
offered. Indeed, it is important to point out that the parity
requirements only apply if an employer chooses to offer mental health
benefits.
Question 26. CBO estimates two categories that would need to be
offset by the budget resolution. First, CBO estimates that the
resulting reduction in taxable income would grow from $1.0 billion in
calendar year 2002 to $2.3 billion in 2011. Those reductions in
workers' taxable compensation would lead to lower federal tax revenues.
CBO estimates that federal tax revenues would fall by $230 million in
2002 and by $5.4 billion over the 2002-2011 period if H.R. 4066 were
enacted. Second, CBO also stated the cost of federal spending on
Medicaid and S-CHIP to the cost of the bill. CBO estimates this bill
will cost those programs about $30 million in 2002 and $600 million
over the 2002-2011 period.
Have supporters of H.R. 4066 provided specific means of offsetting
these figures--whether through increased taxes or reductions in other
spending?
ANSWER: We are not aware of any proposals to offset the costs that
will ultimately be imposed should H.R. 4066 be enacted, however, this
question would best be answered by supporters of H.R. 4066.
Question 27. A study conducted by the UCLA/RAND Research Center on
Managed Care found that techniques to intensively manage care,
including the use of provider networks and case management, is critical
to appropriate utilization and maintaining costs. Various estimates
have found a different cost increase depending on the amount of managed
care involved. Costs are higher when a group health plan offers a non-
managed health care plan to its employees. Is it not more likely that
where a health plan is not a managed care plan that its mental health
care costs are likely to be higher if this legislation is enacted? What
are the potential dangers to the quality of care if health plans are
unable to manage mental health benefits successfully as they are
currently able to do? Is it possible to contract with all potential
providers of mental health care?
ANSWER: Health plans work to ensure that patients receive the most
appropriate and efficient care for their mental health conditions by
using techniques such as case management, treatment plans,
preauthorization practices, and utilization review and management; by
negotiating separate reimbursement rates and sometimes separate service
delivery systems for different benefits; and by applying specific
behavioral health medical necessity and appropriateness criteria.
Eliminating the ability of health plans to use such mechanisms can harm
consumers by resulting in inappropriate treatment of patient mental
health needs and inflation of the benefit's cost, resulting in
escalating premiums. The Substance Abuse and Mental Health Services
Administration (SAMHSA) estimated that a federal mental health parity
mandate would cause expenditures on mental health services to increase
by 111% for enrollees in PPO plans, by 63% for enrollees in point-of-
service plans, and by 11% for enrollees in HMO plans. As you can see,
health plans with less medical management will see a greater increase
in mental health expenditures. By undermining medical management of
mental health benefits, H.R. 4066 could result in reduced quality and
increased costs .
Contracting with all providers of mental health care would require
the American health care system to revert back to traditional indemnity
insurance. If we were to revert back to such a model, the critical role
health plans play in screening providers and contracting with only
those who are most qualified to meet the needs of their members to
avoid misuse and inappropriate use of health care services would be
eliminated. Consumers have come to rely on this important function
health plans serve and throwing consumers back into the days without
medical management and provider credentialing would only increase
misuse and inappropriate use of health care services.
Question 28. I understand that an independent analysis was done a
couple years ago by the Lewin Group that concluded that for every one
percent increase in health care costs (beyond the normal rate of health
inflation) an additional 300,000 Americans lose their health care
coverage. I assume some of those lose their coverage because their
employers simply stop offering health insurance at some point. Is it
not also correct that many more lose their coverage, though, because
they cannot afford it themselves as the price goes up and up? Is it
possible that some employers may simply decide to drop mental health
coverage entirely if this legislation is enacted? If so, what sorts of
companies might be forced to make such a drastic decision in your
opinion?
ANSWER: See answers to questions #24 and #25.
Question 29. (a) On page six of Dr. Regier's testimony, he quotes
someone who states ``insurers tend to provide poor mental health
benefits in order to avoid [enrollees with mental disorders].'' It is
difficult to understand this claim in the current context or in
general. In the group market, insurers are not selling to individuals
at all, but to groups. Under ERISA there is no ability to look at or
discriminate based on the conditions of individuals. Is there any
further basis for the above claim?
(b) Dr. Regier further notes that insurers shift costs from
insurers to employers who are not able to take advantage of the market.
This too is hard to comprehend. Employers purchase insurance, so, of
course, the costs are shifted to the purchaser. Employers, however, can
choose from among insurance products in a free market. Dr. Regier then
states: ``In effect, insurers are subverting responsible employers by
segmenting risk and costs and shifting the obligation of mental health
coverage onto an already overburdened public sector.'' Most employer
groups that I am aware of oppose this parity legislation. Some
employers provide broader insurance coverage, some provide less, and
others not at all. Some employers who provide coverage now may be
forced to drop this benefit if costs go up too much. Is there any
further basis for the statement that employers are not able to take
advantage of the market or that insurers are subverting responsible
employers?
ANSWER: Dr. Regier's statements fail to acknowledge current health
plan coverage as well as the basic nature of insurance. The vast
majority of health plans already cover mental health and substance
abuse services. In fact, in AAHP's 2002 Industry Survey, which surveyed
plans representing nearly 40 million enrollees, 96% of plans reported
covering mental health/ substance abuse services. In addition, health
plans routinely cover pharmaceuticals used to treat those with mental
illnesses. Indeed, many health plans report that drugs used to treat
mental illnesses rank among the top three most frequently utilized
classes of drugs, and nearly half of plans report spending more money
on drugs to treat mental illness than on any other class of drugs.
Not only have health insurers not sought to avoid responsibility
for covering mental disorders, but health plans have increased access
to mental health services by providing affordable coverage. In fact,
many health plans offer employers a range of different options of
coverage for mental health to meet the needs of their workforce and
premium levels they can afford. Many health plans have outreach
programs, for example programs to identify patients with depression,
and to assure timely outpatient follow up of patients who have been
admitted to the hospital with serious psychiatric disorders.
Question 30. Dr. Regier states there is no objective evidence that
businesses are paying for peripheral conditions to any statistically
significant degree. That is, of course, because there is no law
compelling that they cover such conditions. On page ten of Dr. Regier's
written testimony he states that `` `malingering' is no more likely to
be covered in a post parity world than it is today.'' Can you provide
an example of clinically significant malingering, and reasons as to why
employers should be forced to cover this condition? Dr. Regier also
states ``it is remarkable that an insurance industry that has
historically sought to avoid responsibility for treating severe mental
disorders is today expressing concern that only severely mentally ill
patients should be covered by parity legislation.'' Please comment on
the basis for this statement.
ANSWER: As we have mentioned previously, the difficulty with using
``clinically significant'' as a tool for measurement is that there is
no definition of the term and it will ultimately vary from situation to
situation and provider to provider. Without a clear definition,
numerous disorders and conditions with questionable scientific evidence
such as sibling relationship problems and spiritual disorders, are
subject to interpretation by providers as to what ``clinically
significant'' means. Therefore it is difficult to predict what the
specific demand or implications of such a standard would be. However,
it is not unreasonable to assume that with the conflict of interest
inherent in using the DSM-IV as a determinant of coverage, members of
the APA will benefit from H.R. 4066 and the demand for treatment for
mental health disorders and conditions will increase significantly.
As noted previously, the vast majority of health plans already
cover mental health and substance abuse services. In AAHP's 2002
Industry Survey, which surveyed plans representing nearly 40 million
enrollees, 96% of plans reported covering mental health/ substance
abuse services. In addition, health plans routinely cover
pharmaceuticals used to treat those with mental illnesses. Indeed, many
health plans report that drugs used to treat mental illnesses rank
among the top three most frequently utilized classes of drugs, and
nearly half of plans report spending more money on drugs to treat
mental illness than on any other class of drugs.
Not only have health insurers not sought to avoid responsibility
for covering mental disorders, but health plans have increased access
to mental health services by providing affordable coverage. In fact,
many health plans offer employers a range of different options of
coverage for mental health to meet the needs of their workforce and
premium levels they can afford. Many health plans have outreach
programs to identify patients with depression and to assure outpatient
follow up of patients who have been admitted to the hospital with
serious psychiatric disorders.
question concerning compliance times
Question 31. H.R. 4066 has an effective date of January 1, 2003.
Does this date give employers enough time to make the needed, far-
reaching changes in their health plans, especially if the Department of
Health and Human Services does not have final regulations for at least
several months? Should the effective date be tied to some period after
the issuance of final regulations?
ANSWER: We cannot speak for employers, however, we do believe that
affected entities must have enough time to come into compliance with
any bill. From the health plan perspective, if H.R. 4066 were enacted,
plans would need adequate time to rewrite contracts, medical policies
and other plan documents in order to make sure they are compliant.
Therefore, any compliance date should come at a reasonable time (such
as 18 months) after final regulations are issued to ensure that
necessary changes have a chance to be made and are consistent with a
final regulation. It is important to note that plans participating in
FEHBP were allowed approximately 18 months to comply with the
administrative order to provide parity for mental health benefits.
______
American Psychiatric Association
Washington, D.C. 20005
September 24, 2002
Honorable Michael Bilirakis
Chairman
Subcommittee on Health
U.S. House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman: This letter is in response to your additional
questions for the record of the Health Subcommittee's July 23, 2002,
hearing on mental health parity. As you know, I filed my initial
response to the Subcommittee's questions by the original deadline of
September 9. My response at that time noted that Question #29 imputed
to me testimony that I did not deliver to the Subcommittee, and offered
to respond to additional questions if requested. On September 20, I
received an amended list of questions with instructions to respond to
Question 29 as revised, and to amend my entire submission for the
record. This letter is in response to the Subcommittee's amended
request. I am pleased to be able to respond.
The introductory paragraph to Question 1 asserts that states which
have chosen to limit parity requirements to ``biologically-based or
``serious'' mental illness do not require use of criteria included in
the Diagnostic and Statistical Manual of Mental Disorders, Fourth
Edition (DSM-IV, hereafter). This is not correct. In fact, DSM-IV is
the official code set for various federal agencies and for virtually
all states. Indeed, there are over 650 federal and state statutes and
regulations that rely on or directly incorporate DSM's diagnostic
criteria. For example, the Department of Veterans Affairs disability
program uses the diagnostic criteria in DSM-IV to assess whether an
applicant qualifies for disability on the basis of a mental disorder
[38 CFR Sec. 4.125]. In a similar vein, state and federal courts rely
heavily on DSM in making so-called scienter assessments in murder and
other cases involving serious crimes. You may therefore wish to direct
your staff to conduct a Lexis/Nexis search to identify those laws that
have already incorporated the DSM-IV in statute.
The introductory paragraph also asserts that ``Dr. Regier is asking
Congress to incorporate an 800-page manual by reference in a statute.''
While I certainly support the reference to DSM-IV in H.R. 4066 and S.
543, it must be noted that the DSM reference was included in the
legislation as introduced and now sponsored by more than two-thirds of
the Senate and over half the House of Representatives. This is not
simply an idea that originated with my testimony before your
Subcommittee.
questions regarding dsm iv
Question 1: Dr. Regier's testimony states that the controversy over
whether to incorporate DSM IV into statutory law is a red herring. Many
states that have looked at this issue have chosen to limit any parity
requirements to ``biologically-based'' or ``serious'' mental illness as
the define them. Those states do not require use of DSM IV criteria.
Dr. Regier is asking Congress to incorporate an 800-page manual by
reference in a statute. That would give that document legal standing in
many ways and with many potential consequences. In asking the
Subcommittee to take such a step, we need to fully understand and
resolve all of the attendant controversies. Below are some of the
relevant questions.
1. It would appear from Dr. Regier's testimony that some believe if
a group health plan offers any mental health benefits, H.R. 4066
requires the plan to offer coverage for a comprehensive list of
conditions set out in DSM IV. This reading is stated in the Views of
the Senate Committee on Health Education Labor and Pensions of S. 543,
the Senate analogue to H.R. 4066. This reading, however, is troubling
and not supported by the text. Nothing in H.R. 4066 appears to require
a plan to cover any category of mental health benefits, much less the
long list of ``conditions'' in DSM IV. H.R. 4066 defines mental health
benefits, in part, as:
Benefits with respect to services, as defined under the terms
and conditions of the plan or coverage (as the case may be),
for all categories of mental health conditions listed in [DSM
IV]
The reference to DSM IV helps define what is a mental health
benefit. Nowhere in the text, however, does the bill state that group
health plans must provide comprehensive mental health benefits or
provide benefits as broad as the conditions listed in DSM IV. Indeed,
the savings clause language in proposed 712(b)(1) and (3) state that no
mental health benefits are ever required at all; and that no specific
services are ever required, except to the extent required by the parity
rule itself. It is difficult to see how the parity rule would require
any category under DSM IV.
Are you arguing that H.R. 4066 requires mental health plans to
provide coverage for all conditions in DSM IV? If so, please explain
your reading and your reading of the savings clause language, with
specific references to language in the bill. For those that do not
support such a position what clarifications are necessary to assure the
appropriate policy from your prospective?
Answer: I appreciate the opportunity to clarify our understanding
of the scope of the parity rule in HR 4066, as it relates to DSM-IV. I
note that the question posits a very limited reading of the bill's
reference to DSM-IV as it relates to scope, namely ``that if a plan
provides any given mental health benefit the parity rules of the bill
apply to that category of benefits.'' This reading is simply a
restatement of current law, under which health plans can, for example,
elect to limit coverage of mental health benefits to only a handful of
illnesses. It ignores the broad definition of the term ``treatment
limitations'', particularly the language, ``or other similar limits on
the duration or scope of treatment,'' under which, I believe a plan
cannot exclude coverage of treatment for any particular mental
disorder. By retaining the structure and key terms of the current law's
definition of mental health benefits while at the same time
substantially expanding that definition and employing the phrase ``all
categories of mental health conditions'' and employing a very broad
definition of the term ``treatment limitations,'' the bill's authors
make it clear that this bill is not simply a restatement of current
law. Rather, as the legislative record amply reflects, the bill was
designed to closely track the expansive policy adopted in the Federal
Employee Health Benefits Program (with the exception of excluding
substance abuse and chemical dependency).
Paragraph two of Question 1 confuses the concept of treatment
services with definitions of mental disorders included in DSM-IV. I
note that services are not the same as disorders. Services may best be
understood as those treatment procedures defined by the American
Medical Association's Fourth edition of the Common Procedural
Terminology (CPT-4) codes, which as you know consist of several
thousand different medical services. That manual is the standard
reference for Medicare, Medicaid, and all private insurance companies
for defining services covered under defined benefit insurance plans.
For example, outpatient medical management and psychotherapy for 25
minutes is a service designated as CPT-90805. Other procedure codes
maintained by CMS include the HCPCS codes that are used most often by
public sector programs to code services such as Programs of Assertive
Case-Management Treatment (PACT), for severely ill homeless patients
that are not usually covered by private insurance policies.
A review of the legislative record of S. 543 and H.R. 4066 clearly
supports the view that the sponsors intend for the parity requirement
to be extended broadly to all mental disorders and conditions in DSM-IV
except for substance abuse disorders. I believe that the sponsors
indeed envisioned an ``all or nothing'' requirement with respect to
coverage of disorders and conditions referenced in DSM-IV (again
exclusive of substance abuse disorders). Thus it seems clear that an
insurance company could market a plan with no mental health benefits,
just as they can market one with no dental benefits. However, if a plan
elects to provide mental health benefits it must provide in-network
parity for all categories of mental health conditions in DSM-IV
exclusive of substance abuse disorders.
While questions about the exceptions clause in the rule of
construction should best be directed to its authors (in the Senate), it
is my view that the purpose of the clause is to specify that
comprehensive coverage of disorders does not axiomatically require that
all possible services for the treatment of these disorders be offered
by all health plans. By the same token, the exceptions clause appears
to me to be intended to prevent the ``no specific services'' clause
from becoming an unintended loophole under which health insurers could
circumvent the broad coverage requirements in the bill as a whole.
Question 2: Is there any precedent in current federal statutes that
says, in effect, that if you provide ANY given service, such as mental
health services that you must cover ALL conditions listed in a manual
prepared by one group of health care professionals? For example, is
there a similar federal law that says that if you provide coverage for
some pharmaceuticals or medical procedures that you must now cover ALL
pharmaceuticals or medical procedures listed in a manual prepared by a
trade association of pharmacists or medical care providers?
Answer: Question 2 continues to confuse the requirement for
coverage of mental disorders as defined in DSM-IV with the provision of
specific services. Again, H.R. 4066 references DSM-IV because it is,
simply, the current internationally-recognized standard for the
diagnosis of mental disorders. DSM was developed through an open
process involving more than 1,000 national and international
researchers and clinicians drawn from a wide range of mental and
general health fields. It is based on a systematic, empirical study of
evidence consisting of literature reviews, data analyses and extensive
field trials funded by NIMH and other government entities. The bill
does not require the provision of specific services, it simply requires
that patients with a class of disorders not be automatically denied
access to medically necessary procedures or benefits simply by virtue
of the diagnosed disorder.
The question also implicitly questions the objectivity of DSM by
comparing it to hypothetical manuals ``prepared by a trade association
of pharmacists or medical care providers.'' I would be happy to brief
the Subcommittee on the process by which DSM is revised. It is worth
noting that Congress routinely includes in statute references to, for
example, the AMA's manual of Current Procedural Terminology, without
questioning the objectivity of the CPT, presumably because the Congress
recognizes that the CPT is a standard reference (see, for example, CPT
statutory references in recent legislation expanding Medicare coverage
of telemedical services).
Question 3: Dr. Regier's testimony addresses the categories of DSM
IV referred to as conditions for clinical focus. These include such
items as: sibling relational problem; occupational problem; academic
problem; and religious or spiritual problem. Some of these terms would
apparently apply even if they are not termed ``mental disorders'' under
the manual. For example, V. 62.2 ``Occupational Problem'' states that
the condition need not be a mental disorder. The manual further states
``[e]xamples include job dissatisfaction and uncertainty about career
problems. The manual provides an example of V. 62.3 ``Academic
Problem'' as ``a pattern of failing grades or significant
underachievement in a person with adequate intellectual capacity in the
absence of a Learning or Communication Disorder or any other mental
disorder that would account for this problem.'' Does H.R. 4066
incorporate these conditions even where the manual states that they are
conditions and not mental disorders?
Answer: This question focuses on a section of the DSM-IV that is
called ``Other Conditions That May be a Focus of Clinical Attention.''
Only a general description of these conditions is provided because
these conditions are not mental disorders per se and thus do not have
specific criteria governing their inclusion or exclusion. These codes
are present in the DSM because they are also found in the U.S. Clinical
Modification of the Ninth Edition of the International Classification
of Diseases (ICD-9-CM), which is the official diagnostic classification
for all disorders and medical conditions in the United States, and is
used by all general medical physicians and health care providers.
Hence, if a patient comes to a general physician complaining of an
occupational problem, relational problem, or spiritual problem,
inclusion of these so-called ``V Codes'' provides the physician with a
means of recording them as an integral part of the patient's overall
medical record, and also for any future statistical analysis of the
types of problems brought to various health care settings. Since mental
health practitioners have used DSM as the standard reference for mental
disorders for nearly 25 years, inclusion of the V Codes is provided as
a courtesy to facilitate coding and crosswalking between ICD and DSM
and allows clinicians an opportunity to identify the types of ``non-
diagnostic'' problems that are brought to their attention.
Again, it must be stated that diagnosis does not equate to
treatment. If no mental disorders are diagnosed in such patient
encounters, then it is highly unlikely that treatment would be
authorized by the insurance plan. If, however, an individual patient
manifests a clinically significant level of impairment associated with
some of these conditions, insurance companies currently may authorize a
time-limited treatment plan. Under H.R. 4066 there is no requirement
for an insurance company to offer any particular service for any of
these problems although they would not be prohibited from doing so if
they considered the service to be medically necessary.
Question 4: DSM IV category 315.1 is called Mathematics disorder.
One of the diagnostic criteria is that mathematical ability is
substantially below that expected for the person's age and
intelligence. Another criterion is that it significantly interferes
with academic achievement. Are you saying employers must have insurance
to cover diagnosis and treatment for Mathematics disorder?
Answer: No. The difference between Learning Disorders, such as
mathematics disorder, and the ``V-codes'' described in the previous
question, is that evidence of a significant learning disorder is often
cause for a neurological, psychological, or psychiatric evaluation to
determine the presence of a neurological abnormality such as a brain
malformation, a tumor, or a mental disorder that can be responsive to
treatment. A determination of the appropriateness for the medical
necessity of continuing treatment with insurance coverage is one made
by the insurance company in conjunction with the treating clinician. If
no such medical condition is found, the remedy is usually appropriately
found in the educational system.
Question 5: The DSM IV manual also states criteria to describe
mild, moderate, and severe disorders. Mild disorders or example are
defined as ``[f]ew if any symptoms in excess of those required to make
the diagnosis are present, and symptoms result in no more than minor
impairment in social or occupational functioning.''
Dr. Regier's testimony mentions the term ``clinically significant
impairment.'' Does the universe of clinically significant impairments
include mild disorders and conditions? What evidence would be required
to describe a mild version of the following conditions in DSM IV:
Parent-Child Relational Problem V61.20
Sibling Relational Problem V61.8
Relational Problem Not Otherwise Specified V62.82
Noncompliance with Treatment V15.81
Adult Antisocial Behavior V71.01
Child or Adolescent Antisocial Behavior V71.02
Borderline Intellectual Functioning V62.89
Age-related Cognitive Decline 780.9
Bereavement V62.82
Academic Problem V62.3
Occupational Problem V62.2
Identify Problem 313.82
Religious or Spiritual Problem V62.89
Acculturation Problem V62.4
Phase of Life Problem V62.89
Are all of these conditions to be considered ``clinically
significant impairments''? If so, how is clinical significance
measured?
Also, where in DSM IV is there a discussion of the specific medical
evidence supporting each category?
How would you propose to determine what meets a parity standard
between these mental health conditions and medical conditions?
Answer: As noted, V Codes are not mental disorders under DSM-IV,
but rather are conditions for potential clinical focus included in DSM
to maintain consistency with the ICD. For the diagnosis of a mental
disorder there is a requirement for clinically significant distress or
impairment in social, occupational, or other important areas of
functioning. This criterion is used to establish a threshold for the
diagnosis of a disorder in those situations in which some of the
symptoms of a disorder may be present but of insufficient intensity to
affect normal functioning. DSM has severity and course specifiers for
disorders that include mild, moderate, severe, in partial remission, in
full remission, and prior history of a condition. Specific criteria for
defining Mild, Moderate, and Severe, have been provided for mental
retardation, conduct disorder, manic episode, and major depressive
episode. For example, mild mental retardation has an IQ range of 50-70
whereas severe is in the range of 20-40. Hence, none of the conditions
listed in question 5 would have specific criteria for a mild version.
With regard to the specific relational and other problems
referenced in Question 5, all of them do not need to have clinically
significant impairments. In fact, the text of DSM-IV notes that such
problems may exacerbate or complicate the management of a mental
disorder or general medical condition in one or more members of the
relational unit, they may be the result of such disorders, or they may
be independent of other conditions. The major way in which clinical
significance is measured in DSM-IV is by means of the Global Assessment
of Function (GAF) Scale. In this scale of 1-100, with 100 being
superior functioning, specific functional levels are identified in
which mild functional impairment begins at 70, moderate at 60 and
severe at 50. This scale is used by all mental health professionals and
by all managed behavioral health organizations to assist in determining
the medical necessity for treatment across the full range of disorders
and conditions.
Question 5 also asks ``where in DSM IV is there a discussion of the
specific medical evidence supporting each category?'' While it is true
that no specific scientific evidence is provided in DSM-IV or ICD-9-CM
for conditions that are the focus of clinical attention, the V-code
conditions are simply lists that have been accumulated over the years
to describe the reasons why patients might come to a physician or other
health care provider's office. They are coded and given a number so
that statistical analyses can be made for research that is intended to
improve the organization and effectiveness of meeting patient needs and
requests. Insurance coverage for treatment services specifically for
these conditions and all mental disorders is subject to medical
necessity criteria decisions that are routinely made by insurance and
managed care companies. The only parity issue involved here is that
there is no reason why mental health professionals should be denied the
opportunity to list these reasons for a visit when the same list is
available to general medical physicians in the ICD-9-CM.
Question 6: Do you believe that the diagnostic criteria in DSM IV
should have legal standing by virtue of its reference in H.R. 4066, and
if so, for what legal purpose or purposes?
Answer: Yes. DSM provides the most comprehensive diagnostic
framework for defining and describing mental disorders. The major legal
reason why states and the Federal Government have used DSM-IV criteria,
instead of ICD-9-CM criteria is to insist on a higher and more precise
standard for defining a mental disorder. When a physician requests
payment for a DSM-IV disorder of Major Depression (296.2), the
physician is obligated to document in his chart that the patient meets
at least 5 of 8 symptoms, has had a significant depressed mood every
day, most of the day for over two weeks, and meets other exclusion
criteria. In addition, in order to document medical necessity for
treatment, the managed care organizations generally require
documentation of the level of function on Axis V and indications of any
psychosocial or environmental factors that are likely to affect the
course of treatment. Hence, DSM-IV already has legal standing in over
650 State and Federal Statutes because it is useful for legal
enforcement purposes.
Question 7: Could you support language that says that the diagnosis
of a disorder and its treatment must be well established and supported
by substantial scientific evidence?
Answer: Absent further discussion of ``well established'' and
``supported by substantial scientific evidence'' it is difficult to
respond. What is meant by these terms? As defined by whom? As a general
rule, we would be concerned that these vague standards would be used to
undermine the general principles embodied in H.R. 4066 and S. 543. The
intent of H.R. 4066 is to provide parity between mental disorders and
other medical/surgical disorders and not to establish a different or
higher standard for mental health treatment.
Question 8: Dr. Regier's testimony says that DSM IV has ``precise''
criteria for diagnoses. Can you please explain category 313.81 called
``oppositional defiant disorder''? The diagnostic criteria require four
among the following:
<bullet> often loses temper
<bullet> often argues with adults
<bullet> often actively defies or refuses to comply with adults request
or rules
<bullet> often deliberately annoys people
<bullet> often blames others for his or her mistakes or behavior
<bullet> is often touchy or easily annoyed by others
<bullet> is often angry and resentful
<bullet> is often spiteful or vindictive
As Dr. Regier notes criteria also requires ``clinically
significant'' impairment. This all seems pretty subjective. Other than
the phrase ``clinically significant'' a lot of teenagers may meet these
other criteria for periods of time. This puts a lot of emphasis on the
phrase ``clinically significant.'' Recognizing that the DSM discusses
clinical significance and states that ``assessing whether this
criterion is met'' is an inherently difficult clinical judgment'', is
it realistic to establish any objective standards for purposes of
determining what is not clinically significant?
If there is a disagreement with the group health plan over an
individual case, does the beneficiary or provider have the burden to
show a clinically significant impairment?
Answer: Question 8 leaves out the essential feature of Opposition
Defiant Disorder (ODD), namely a recurrent pattern of negativistic,
defiant, disobedient, and hostile behavior toward authority figures
that persists for at least 6 months (Criteria A). After meeting that
specific duration criterion, it is necessary for the child to exhibit
at least four out of the eight specified symptoms, to have ``clinically
significant impairment,'' and to express such symptoms in the absence
of a psychotic mood disorder. Since ODD is frequently a precursor to a
more severe conduct disorder, where symptoms of violence, property
destruction, and theft are required for the diagnosis, it is necessary
to rule out these more severe symptoms in making the less severe
diagnosis.
Clinical judgments about such disorders are made on a daily basis
in determinations of medical necessity for treatment and insurance
coverage. In addition, this is a diagnosis of inclusion in that there
must be documentation of having four or more of these criteria for at
least 6 months. Those who don't meet these very explicit criteria may
be considered to be in a normal range of functioning, even if they are
somewhat troublesome.
If there is disagreement between a health plan and a patient or
provider over the validity of the diagnosis and the need for treatment,
the case would generally go to arbitration as would occur for any other
disagreement about treatment need.
Question 9: Is it correct that the DSM IV is essentially based on a
1994 classification scheme that may require revisions now? If we
incorporate DSM IV in a statute, how do we propose plans to keep up
with advances in the classification and diagnostic system? Do you
believe it is appropriate to delegate this authority to a
nongovernmental body? Since members of the American Psychiatric
Association would appear to benefit financially from broad definitions
of coverage, please comment on whether you believe such a delegation
would represent a conflict of interest. If not, why not?
Answer: DSM-IV is embodied in over 650 state and Federal statutes
and regulations because it is the internationally-recognized standard
for the diagnosis of mental illness. It is not, and cannot be a static
measure, any more than we should expect a textbook of general medicine
to be static, since to be so would be to ignore major scientific
advances in the diagnosis and treatment of medical illness. This has
not proved to be any significant problem with successive revisions of
other diagnostic codes such as the International Classification of
Diseases (ICD-9) or the Common Procedural Terminology (CPT-4).
With respect to the question about delegation of authority to a
non-governmental body, under the Health Insurance Portability and
Accountability Act (HIPAA) of 1996, the classifications of all medical,
surgical, and mental health procedure codes have already been delegated
to the American Medical Association for CPT-4, and the dental procedure
codes have been delegated to the American Dental Association. Both are
non-governmental professional organizations.
Question 9 posits that criteria are written broadly so that
psychiatrists can justify treatment for the widest range of patients
and thus benefit financially. It should be noted that DSM, as the
standard reference for the diagnosis of mental disorders, is used by
virtually all mental health professionals, including psychologists,
social workers, and others, as well as other non-psychiatric
physicians. Thus, the inference that psychiatrists would uniquely
benefit is not correct, nor is it correct that DSM is written too
broadly. In fact, the successful objective of successive editions of
DSM has been to narrow the standards by which a diagnosis is made. The
DSM revision process is a collaborative effort involving literally
hundreds of research investigators from multiple disciplines and in
collaboration with the National Institutes of Health and international
scientists and clinicians representing the World Health Organization.
The more stringent criteria of DSM-IV are used by the Food and Drug
Administration to specify treatment indications and by the National
Institutes of Health to narrow the focus of research studies.
questions regarding the federal employees health benefits program
The FEHBP questions appear to reflect some confusion about current
parity requirements as based on FEHBP policy guidance versus specific
plan summaries on the Office of Personnel Management website which may
not be current. I would encourage Committee staff to seek clarification
from pertinent Office of Personnel Management staff.
Question 10: Dr. Regier's testimony correctly notes the Office of
Personnel Management has issued guidance which refers to DSM IV as an
objective for health plans contracting with the Federal Employee Health
Benefits Program. An initial review of several health insurance plans
under FEHBP showed no reference to DSM IV in the plans available in
2002. Several of the actual plans had a definition of mental health
benefits that referred to certain categories in the International
Classification of Diseases (ICD). Are you aware of plans in FEHBP that
specify DSM IV? What is your opinion of the plans that specified
certain categories of ICD? Please list the differences in the DSM IV
categories and the following language:
``Conditions and diseases listed in the most recent edition of
the [ICD] as psychoses, neurotic disorders, or personality
disorders; other nonpsychotic mental disorders listed in the
ICD, to be determined by us . . .''
Given that actual FEHBP contracts are not using DSM IV, why should
we mandate a change in statute?
Answer: The FEHBP does not require that a health plan specifically
reference the DSM-IV but rather OPM requires parity coverage for all
diagnostic categories of mental health and substance abuse conditions
listed in DSM.
With over 250 plans participating in the FEHBP insurance market, it
is not possible to review the written specifications used by all
participating insurers and their managed behavioral health organization
subcontractors. Some of the smaller insurance companies that have not
had extensive experience with managed behavioral health care
organizations (MBHOs)may simply use the ICD-9-CM categories of
disorders which use the same ICD code numbers in Chapter 5 (Mental
Disorders) as are used in an officially approved cross-walk to the more
explicit criteria of DSM-IV. However, all of the MBHOs that manage a
mental health benefit carve-out and all of the HMO's that manage their
own benefit use the DSM-IV criteria rather than the archaic definitions
of disorders contained in the glossary to ICD-9-CM. Following the
requirement that participating insurers must offer coverage for all
diagnostic categories of mental health and substance abuse conditions
listed in the DSM-IV, referencing the ICD effectively complies with
this directive. The referenced definition lists the individual
subsections of the ICD chapter 5 (Mental Disorders). The referenced
definition does not include mental retardation (parity coverage
excluded by FEHBP) and V-codes.
Nothing in the legislative (H.R. 4066 and S. 543) language mandates
that a plan must reference the DSM specifically in their plan's
definition but only would require coverage for the diagnostic
categories of mental health conditions listed in the DSM-IV. The
purpose of specifying the more stringent DSM-IV criteria is to better
assess the patient's eligibility under the medical necessity criteria
geared to DSM-IV, and to limit payment of benefits to those who meet
this higher standard of functional impairment than is found in the
older ICD-9-CM definitions.
Question 11: A survey of FEHBP plans also indicates a number of
exclusions that are not specifically provided for in H.R. 4066. These
include, but are not limited to:
<bullet> counseling or therapy for material, educational or behavioral
problems
<bullet> services provided under a federal, state or local government
program
<bullet> treatment related to marital discord
<bullet> treatment for learning disabilities and mental retardation
<bullet> all charges fir chemical aversion therapy, conditional reflex
treatments, narcotherapy or any similar aversion treatments and
all related charges (including room and board)
<bullet> services by pastoral, marital, or drug/alcohol counselors
<bullet> biofeedback, conjoint therapy, hypnotherapy, interpretation/
preparation of reports
<bullet> services, drugs or supplies related to sexual transformation,
sexual dysfunction and sexual inadequacy
<bullet> experimental or investigational procedures, treatments, drugs
or devices
First, would you support language making clear that all exclusions
like these and others found among FEHBP carriers would be available?
Second, if language were also to refer to the DSM IV, how would you
resolve excluding sexual dysfunction when it is clearly identified in
DSM IV? Finally, under the same circumstances, how would you resolve
excluding marital, educational and behavioral problems when the DSM IV
includes conditions such as:
Partner Relational Problem V61.1
Academic Problem V62.3
Mathematics disorder 315.1
Attention Deficit Hyperactivity Disorder 314
Child or Adolescent Antisocial Behavior V71.02
Answer: Federal (OPM) policy regarding parity under FEHB requires
that coverage be made available for services to treat all DSM IV
diagnoses to the extent that the services: are included in authorized
treatment plans; delivered in accordance with standard protocols; and
meet medical necessity determination criteria. (OPM FEHB Program
Carrier Letter, April 11, 2000). S. 543 incorporates that same FEHB
policy (with the exception of substance abuse and chemical dependency).
While we take note of the apparent existence of isolated exclusions
employed by some particular plans, and are dismayed by some which
appear to be at odds with FEHBP policy, we do not believe these
illustrations warrant the addition of any language to HR 4066. We note
that in some instances those exclusions may well be consistent with the
``no requirement of specific services'' provision of the bill, and a
foundation for the exclusion already exists in the bill. In our view,
however, H.R. 4066 (and S. 543) already provide employers and insurers
substantial flexibility, through the many compromise provisions forged
in crafting S. 543, as amended. The flexibility already provided in the
bill makes it unnecessary for a plan to rely only on exclusions of
coverage as a mechanism to limit their exposure.
With regard to the list of exclusions noted in Question 11, it is
important to note that most of these are specific types of services
(e.g. services by pastoral, marital, or drug counselors, biofeedback,
and services for sexual dysfunction). Some of the referenced services
(i.e., those related to substance abuse) would presumably be excluded
under the terms of H.R. 4066 and S. 543. The decision to exclude
certain types of services can be made by the insurance companies,
although it is interesting to note that support for the use of Viagra
for certain forms of sexual dysfunction is generally covered by FEHBP
and most insurance companies. The treatment of V-codes and mathematics
disorder has been discussed in previous answers. The addition, however,
of Attention Deficit Hyperactivity Disorder (ADHD) is unexpected. I
note that ADHD is defined as a severe mental disorder in Texas and
Virginia parity laws and has a well-defined set of criteria and
treatment guidelines for both primary care physicians and mental health
specialists. Hence, there should be no question about the inclusion of
this disorder under the legislation.
Question 12: In a letter to carriers dated April 11, 2001, OPM
emphasizes that managed care behavioral health care organizations
(MBHO) can implement mental health benefits. Where plans do not choose
to use such organizations, OPM recommends approaches such as
gatekeepers, referrals to network providers, authorized treatment
plans, and pre-certification of inpatient services. OPM states that
plans may limit parity benefits when patients do not substantially
follow their treatment plans. Do you agree with these recommendations
and allowances? How can compliance with treatment plans be proven?
Answer: The FEHBP's original policy guidance accepted a provision
that allowed plans to limit parity benefits when patients did not
substantially follow their treatment plans. The exclusion was
counterintuitive and problematic. For example, if a patient with
Schizophrenia fails to take his medication because of a partially
treated psychotic delusion that the pills are poison, it makes
absolutely no sense to cut off his treatment. In addition, since the
FEHBP plan includes substance abuse services, concern was expressed
that substance abuse relapses, which are a common occurrence with these
disorders, could be used as a reason to cut off all future insured
treatment.
The OPM quickly realized the potential negative consequences of
such a policy and the inability of insurance companies to police
compliance with treatment plans. In testimony on July 11, 2001 before
the Senate Committee on Health, Education, Labor and Pensions
Committee, William E. Flynn, Associate Director for Retirement and
Insurance, of the Office of Personnel Management stated that ``Our
intent was to provide an incentive for people to get the services they
need. However, some stakeholder groups expressed concern that the
provision could be misused to cut off critical services to people in
need. Therefore, in our recent policy guidance, we affirmed our
original intent that all members will receive medically necessary
services.''
The American Psychiatric Association concurs with this decision to
ensure that all patients receive all medically necessary services.
questions concerning the general parity rule
Question 13: Even outside of mental health benefits, health plans
do not treat all categories of health benefits equally. For example,
outpatient physical therapy, emergency care, specialty care, speech
therapy, occupational care, chiropractic care, and preventive care
often have different limitations than other categories of items or
services. Prescription drugs may also have different categories of co-
payments based on the kind of financial arrangements a plan can arrange
with pharmaceutical companies. Do you consider differences in approach
among these categories to be discrimination against the particular
patients who use these services? For example, are we allowing
discrimination against those who need dental coverage or chiropractic
care?
Answer: Question 13 again confuses services with diagnosis, and
juxtaposes limits impacting a particular category of health
professional with those impacting patients. Nowhere else are entire
categories of diagnosis systematically excluded because of their
etiology. We consider the pervasive discrimination in health insurance
plans against people with mental disorders to be unique in nature and
in the magnitude of the damage such discrimination does to individuals,
families, and to society at large. The establishment and maintenance of
arbitrary barriers to needed treatment targeted globally at mental
disorders is altogether different from the examples cited in this
question
Question 14: On page seven of Dr. Regier's written testimony he
claims that the Subcommittee would be outraged if Congress permitted,
among other things, insurers to charge more than twice of much out-of-
pocket for seeing an endocrinologist than for seeing an internist. This
statement is a little unclear. Congress does permit plans to do just
that. There is no current Federal restriction on what a plan should
charge for a visit to an internist versus a specialist. Indeed, plans
often do have different rates and conditions for such things. It is
your understanding that Federal law prohibits different rates and
categories on the mental health side.
Answer: I do not believe that Federal law prohibits different rates
and categories on the non-mental health side. However, to date, few if
any plans have chosen to have different rates for the treatment of
specific categories of general illnesses. Different rates, if imposed,
are usually imposed on entire general categories of providers (i.e.
primary care providers versus specialists). The bill allows for this
type of general distinction to continue both in general health care and
in mental health care. What the bill does not permit is categoric
exclusion of mental disorders and discriminatory cost sharing that
impact patients, such as charging a $50 copayment for mental health
providers when the in-network copayment for all other specialists is
$25.
Question 15: H.R. 4066 would replace the 1996 parity rule and
change it in a variety of ways. For example, the 1996 language provides
a rule in the case where a plan has different aggregate lifetime limits
on different categories of medical and surgical benefits. The 1996
language also provides a clear option to have overall lifetime and
annual limits that do not distinguish between mental and non-mental
health benefits. These seem like important concepts. Why do proponents
of H.R. 4066 seek to make these changes? Is there any problem with the
current provisions on lifetime and annual limits? Won't these changes
start a new round of reviews for equivalent state laws?
Answer: In the view of the American Psychiatric Association, H.R.
4066 would mark a vast improvement over the very modest protections
contained in the 1996 Mental Health Parity Act (MHPA). While a notable
achievement in federal law, the promise of protection from
discrimination in insurance benefit design embodied in the 1996 law has
been elusive. When Congress passed the MHPA it provided only partial
parity, banning the use of arbitrary dollar limits on mental health
services on an annual or lifetime basis. Left untouched were other
important and potentially costly parts of a policy like limits on
inpatient days and outpatient visits and other out of pocket expenses.
Those limits result in continued discrimination against millions of
Americans, who are denied needed treatment or must incur substantial
out-of-pocket costs not required for treatment of other medical
illness. The U.S. General Accounting Office found in a May 2000 report
that 87% of the employers complying with the Act merely substituted
another limit for dollar limits. It is widely recognized that many
employers simply ``squeezed the balloon'' and used, most typically,
tighter day and visit limits instead. This was certainly violating the
spirit of the MHPA and it has had the effect, found the GAO, of placing
parity protections out of reach of many consumers.
Would passage of H.R. 4066 set off a new round of reviews of state
equivalency laws? It is likely that state enabling legislation or
regulatory action would be required, and that appropriate federal
regulatory guidelines and oversight would also be required, as was the
case with the 1996 law. I am unaware of any reports of significant
problems with state implementation of enabling laws and regulation. In
a similar vein, the 1990 amendments to the Medicare supplemental
insurance (Medigap) plans enacted on a bipartisan basis by Congress
required enactment or implementation through regulation of fairly
extensive changes in applicable state legislative and regulatory
standards. This was accomplished with little difficulty.
Question 16: Medical and surgical services have different
reimbursement rates. For example, services required for hip replacement
might include surgical fees, MRI fees, hospitalization, and
rehabilitation, each of which may be reimbursed at a different level. A
broken leg might require emergency room services and physical therapy
in addition to physician fees, and again, each of these services might
have still different reimbursement mechanisms.
If this legislation is enacted, health plans would be required to
have the same cost sharing requirement for mental health services as to
comparable non-mental health services covered by the same plan. What
happens if a health has one deductible and coinsurance amount for
physician office visits, another one for physical therapy and a third
one for occupational therapy, and a fourth one for preventive services?
How is the health plan supposed to comply in this case? Which one would
apply for treatment of schizophrenia or treatment of sibling rivalry
condition? Wouldn't parity requirements force a revaluation of the
whole system and make billing issues extremely complicated?
Answer: I would respectfully suggest that questions related to the
operationalization of the definition of parity are best resolved by
questioning the sponsors of the parity legislation. Nevertheless, I
appreciate that enactment of parity legislation will raise operational
questions which will ultimately require resolution through the
development of an implementing regulation, as was the case with the
Mental Health Parity Act of 1996. With respect to cost-sharing, I see
no reason to believe that federal regulators will be incapable of
establishing reasonable rules, and no reason whatsoever to believe that
anything in this legislation will force health plans to reevaluate
their billing systems or face ``extreme complication''. It should be
noted that OPM implemented an extensive parity requirement, including
coverage of treatment for substance abuse disorders, impacting millions
of covered lives, without major difficulty.
Question 17: Group health plan (sic) sometimes provide a tiered
formulary to address drugs. Under such an approach there are different
cost-sharing requirements because the plan was able to get certain
discounts or because of different cost effectiveness. Would such a plan
violate parity rules if the net effect of the plan made certain
psychotherapy drugs to have a higher cost-share? If so, would the
determination be made on a drug-by-drug basis?
Answer: If a group health plan applied the same criteria to
establishing cost-sharing requirements for psychotropic medications as
are applied to other medications, there would appear to be no conflict
with the provisions of H.R. 4066 and S. 543l. For example, if there is
a different copayment for generic medications in comparison to brand-
name medications, there would be no problem. However, if psychotropic
medications were specifically singled out for higher copayments because
they are used for patients with mental disorders, I believe this would
be a violation of the intent of the bill. At the present time, I am
unaware of any systematic exclusion of pharmacy benefits by diagnosis.
Question 18: Could plans differentiate reimbursement based on
qualifications? For example, a psychiatrist may have a different
reimbursement rate than a psychologist. Could this in any way violate a
parity requirement? Let's assume a group health plan creates outpatient
categories based on whether or not the visit was to someone with a
medical degree--not on whether it was mental illness related or not.
Under H.R. 4066 could such an approach be viewed as discriminatory to
psychologists and, thus, to mental health benefits? That is to say,
could lawyers argue that there is a disparate impact test?
Answer: Yes, plans could differentiate reimbursement based on
qualifications unless there was an applicable state law preventing
this. The Mental Health Equitable Treatment Act is designed to protect
patients from discriminatory, exclusionary, and predatory practices by
insurers, not to enrich health professionals. The MHETA has nothing to
do with reimbursement. Plans would remain free to establish their
provider networks and design reimbursement levels consistent with
applicable laws.
Question 19: There is a savings clause on Page 8 of H.R. 4066
beginning line 11 under the title (3) NO REQUIREMENT OF SPECEFIC
SERVICES. It states:
Nothing in this section shall be construed as requiring a group
health plan (or health insurance coverage offered in connection
with such a plan) to provide coverage for specific mental
health services, except to the extent that the failure to cover
such services would result in disparity between the coverage of
mental health and medical and surgical benefits.
This language seems circular. What is the point of the exceptions
clause? Please provide some examples illustrating the intent of this
provision.
Answer: The term ``disparity' appears in the portion of the Rule of
Construction that deals with ``specific services.'' This language was
added to S. 543 during mark-up in the Senate Committee on Health,
Education, Labor, and Pensions (HELP) at the request of minority
members of the HELP Committee, including Senator Gregg. I respectfully
suggest that questions about the intent of this language are best
directed to those HELP Committee members who drafted the language and
pressed for its inclusion.
That said, I believe the Committee's stated intent is quite clear.
The ``disparity'' issue is the subject of discussions on pages 15-16 of
the HELP Committee report (Senate Report 107-61, September 6, 2001).
The report states that ``the bill reflects an understanding that there
may be circumstances under which a health plan would not provide
specific mental health services. The principle that guides the
establishment of such exclusions must, however, be the principle which
provides the underpinning for the reported bill.'' The report then goes
on to refer to the FEHBP, noting that the parity carrier letter of 2000
states that ``(w)e also expect you to develop benefit packages that
will make effective use of available treatment methods. Since much
successful treatment for mental health . . . is now being delivered
through alternative modalities . . . we encourage a flexible approach
to covering a continuum of care from a comprehensive group of
facilities and providers.'' The report then notes that ``As with
medical and surgical benefits, the committee expects that the selection
of services will vary over time in response to clinical trials of
effectiveness and improved standards of care.'' This seems
straightforward.
questions concerning medical management provisions
Question 20: The scope of the general parity rule in proposed
712(a) and related provisions are quite confusing. In the section
entitled medical management of mental health, what is meant by the lead
phrase ``consistent with subsection (a)?'' Do you believe a parity rule
should apply to how medical management techniques such as concurrent
and retrospective utilization review or application of medical
necessity and appropriateness criteria must have parity rules applied
when evaluating mental health services? If so, would this mean that
arguments could be made that the failure to find a mental health
benefit necessary or appropriate is legally bound by a comparison to
such a decision for non-mental health benefits? If not, what is the
purpose of the phrase ``consistent with subsection (a)?''
Answer: The parity requirement in section 712(a) applies to
arbitrary treatment limitations and financial requirements, terms
defined in the legislation. I do not read that requirement in H.R. 4066
(or S. 543) to dictate or apply to the manner in which medical
management techniques or medical necessity and appropriateness criteria
are used in evaluating mental health services. I express no view as to
how best to interpret the phrase ``consistent with subsection (a)'',
but would note that the Senate Report on S. 543 (Senate Report 107-61),
discusses the ``importance of recognizing [the] impact of managed
care'' and does not suggest that a parity rule is intended to apply to
``the explicit language recognizing the ability of group health plans
to utilize preauthorization, networks of behavioral health providers,
and other means of managing the mental health benefits required by the
legislation.''
Question 21: Under H.R. 4066, treatment limitations include
``limits on the duration or scope of treatment under the plan or
coverage.'' Do you believe this means that decisions to limit the
duration or scope of treatment for therapeutic reasons must be held up
to a parity test? If so, how would this work? If not, why are these
included in the definition of treatment limitations subject to the
parity requirements?
Answer: I believe H.R. 4066 makes a very clear distinction between
impermissible arbitrary limitations (on duration or scope of treatment)
in a health plan and the clearly permissible exercise of clinical
judgment regarding the duration or scope of treatment needed by an
individual patient. I do not believe the bill is ambiguous on this
point.
With respect to specific phrasing, as the General Accounting Office
found in its review of the implementation of the 1996 parity law,
employers and insurers evaded the spirit of that law and, by exploiting
gaps in its provisions, erected new barriers to mental health
treatment. It is my understanding that in light of the disappointing
experience with implementation of parity under the 1996 Act, the
authors of the Mental Health Equitable Treatment Act defined the term
``treatment limitations'' to include the phrase ``or other similar
limits on the duration or scope of treatment under the plan or
coverage'' to ensure that this legislation did not create new loopholes
or avenues (as the 1996 act did) to erect new arbitrary mechanisms to
limit access to needed mental health treatment.
Question 22: Proponents of parity legislation state that plans will
be able to minimize abuse through use of the standard ``medically
necessary and appropriate.'' During the patients' bill of rights debate
it seemed like the emphasis was on getting away from the use of this
standard by plans. In fact, patients' rights legislation all make clear
that plans decide which categories to cover, what exclusions to have,
and what cost-sharing to have. Would this new legislation drive more
``medical necessity'' determinations by plans? Also, patients' rights
legislation, if enacted, would subject such decisions to lawsuits for
damages. Do you favor such lawsuits and what would be the cost of such
suits? In the 40 states that permit external review of denials such
reviews can average more than $600 a case. Wouldn't more qualitative
decisions concerning medical necessity increase these expenditures?
Answer: No. The Congressional Budget office estimates that the
Mental Health Equitable Treatment Act (S. 543) will result in an
increase in premiums of just 0.9 percent. In a CBO memorandum dated
March 26, 2002, CBO analysts Jennifer Bowman, Stuart Hagen, and Alexis
Ahlstrom addressed the potential cost implications of the Bipartisan
Patient Protection Act (S. 1052) on their cost estimates for S. 543.
Rather than a ``skyrocketing'' of mental health costs, they concluded
that if S. 1052 preceded consideration of S. 543, the increase in
premiums for group health insurance would be an average of just 0.2
percentage points more than the current 0.9 percent increase estimate
of S. 543 alone, for an aggregate combined premium impact of 1.1
percent.
The assumption of the employers and insurers mentioned is that a
Patient Bill of Rights (PBR) would expose them to additional scrutiny
and challenges to their management decisions. However, their
vulnerability to additional costs would be directly related to a
company's current conformity to professional standards of care in
making decisions about ``medical necessity.'' Since most companies have
provisions for an independent review of contested claims and perform in
a responsible manner, there should be a minimal impact of PBR on costs.
On the other hand, if the company performs its management role in a
clearly discriminatory manner, as the Minnesota BlueCross/BlueShield
did prior to the suit against them by the Minnesota Attorney General,
inappropriate profits for the insurance company will be decreased. (see
Josephine Marcotty, ``Hatch, Blue Cross settle mental-health lawsuit,''
Minnesota Star Tribune, 19 June 2001). In summary, those insurers most
likely to be impacted are ``bad actors'' who should rightly be viewed
as outliers.
questions concerning costs increases and potential decreases in
insurance coverage
Question 23: Dr. Cutler's testimony notes that the California
Public Employees Retirement System has reported that mental health
parity legislation would cause premiums for its two PPO options to
increase by 3.3 and 2.7 percent, respectively, in 2003. Dr. Cutler also
notes that a 1998 study commissioned by the Substance Abuse and Mental
Health Services Administration estimated that a mental health parity
law would increase premiums by and average of 3.4 percent. Has your
organization reviewed these studies? Does your organization disagree
with them, and if so, on what points?
Answer: The cited CalPERS premium increases are for self-funded PPO
plans only, and are thus misleading in the context in which the data is
presented. CalPERS states that members pay a higher premium for these
plans. In fact, only 26 percent of CalPERS enrollees are in PPOs.
CalPERS also states that the PPO parity rate increase will allow
enrollees and employers to continue to have sound coverage and good
value. CalPERS has not released a cost increase attributable to mental
health parity for the 74 percent of CalPERS members that are in HMOs.
While I am not yet prepared to dispute the cited CalPERS premium
increases, I do not believe that the CalPERS self-funded PPO experience
of approximately 300,000 covered lives can be is generalized to the
entire country. It must also be noted that the limited information that
is available from Mathematica Policy Research, Inc. on implementation
of the California mental health parity law states that ``the law does
not appear to have had any adverse consequences on the health insurance
market to date, such as large increases in premiums or decreases in
health insurance offerings by employers.''
The 1998 SAMHSA report is four years old and does not reflect the
fact that enrollment in managed behavioral healthcare has grown by over
30 percent in that time period. The report recognized that health
maintenance organizations would have only a 0.6 percent premium
increase. Therefore, the increase in managed care enrollment over the
last several years will lower the cost estimate. The HayGroup Mental
Health Benefit Value Comparison (MHBVC) actuarial model used to
generate the 3.4 percent estimate is described on page 29 of the SAMHSA
report (DHHS Publication No. (SMA) 98-3205), and was developed in 1997
under contract with NIMH. An earlier model had been used by the
Congressional Budget Office and Congressional Research Service to
estimate the predicted costs of the Mental Health Parity Act of 1996.
In June 2000, the HayGroup updated their model with more recent
data from the Medical Expenditure Panel Survey (MEPS) data of the
Federal Agency for Healthcare Research and Quality (AHRQ), the FEHB,
and multiple private insurance company claims data. The result of this
update was released by the National Advisory Mental Health Council
Report to the Senate Appropriations Committee, which estimated that the
national cost of implementing mental health parity nationwide would be
an average premium increase of 1.4 percent, including the cost of
coverage for substance abuse services. More recent and accurate cost
estimates have been made by the Congressional Budget Office (.9%) and
PricewaterhouseCoopers (1%). It should also be noted that CBO estimated
that the actual increase in costs to employers would be closer to a
0.4% increase because of changes in management that were likely to
occur.
Question 24: CBO estimates that H.R.4066, if enacted, would
increase premiums for group health insurance by an average of 0.9
percent, before accounting for the responses of health plans,
employers, and workers to the higher premiums under the bill. On July
12, 2002, CBO issued some clarifications of this estimate. CBO notes
that the 0.9% premium increase is a weighted average of both affected
and unaffected plans. According to CBO, affected plans would experience
and increase of between 30 and 70 percent of their mental health costs.
Do you consider these costs to be substantial and do you believe some
employers may choose to not offer mental health benefits?
Answer: Parity opponents who testified before your subcommittee
promoted the statistic that H.R. 4066 and S. 543 would result in an
increase of 30 percent to 70 percent in mental health benefits,
apparently without realizing the base-rate for these projected
increases. This is one half of the equation, and the statistic is
meaningless in a vacuum. The increase of 30 percent to 70 percent
occurs on a base that mental health costs currently represent only 2
percent to 3 percent of total health premium cost. If one does the
math, the projected 30 percent to 70 percent increase on this base
yields a weighted premium increase of 0.9 percent. This, of course, is
the essential finding of the Congressional Budget Office and
parenthetically speaks directly to the minimal attention paid to mental
health care under most insurance plans. There is no controversy here.
Question 25: CBO also assumes that responses to cost increases from
affected firms might include reductions in the number of employers
offering insurance to their employees and in the number of employees
enrolling in employers-sponsored insurance, changes in the types of
health plans that are offered, and reductions in the scope or
generosity of health insurance benefits, such as increased deductibles
or higher co-payments. Do you agree with these assumptions?
Answer: We are aware that CBO modeling expects various possible
responses to cost increases on the employer and employee sides. In its
analysis of S. 543, CBO explains that it is the combination of
behavioral responses to a cost increase due to parity that results in
only a 0.4% premium increase, which employers will pass through to
employees. There are studies that suggest that employers and employees
are more willing to pay higher premiums when they receive a new benefit
rather than pay more for the same.
Question 26: CBO estimates two categories that would need to be
offset by the budget resolution. First, CBO estimates that the
resulting reduction in taxable income would grow from $1.0 billion in
calendar year 2002 to $2.3 billion in 2011. Those reductions in
workers' taxable compensation would lead to lower federal tax revenues.
CBO estimates that federal tax revenues would fall by $230 million in
2002 and by $5.4 billion over the 2002-2011 period, if H.R. 4066 were
enacted. Second, CBO also stated the cost of federal spending on
Medicaid and S-CHIP to the cost of the bill. CBO estimates this bill
will cost those programs about $30 million in 2002 and $600 million
over the 2002-2011 period.
Have supporters of H.R. 4066 provided specific means of offsetting
these figures--whether through increased taxes or reductions in other
spending?
Answer: The CBO estimate of the reduction in taxable income and the
corresponding reduction in national federal tax revenues of $230
million in 2002, is a testament to the minimal cost of less than $1 /
person/year for over 260 million citizens, that is actually involved in
removing this longstanding policy of discrimination against persons
with mental disorders. Although CBO is required by law to make such
estimates before any market response is accounted for, this small
amount in a trillion dollar health care budget and in a multi-trillion
dollar economy could be considered a rounding error. As the CBO stated,
it is likely that even this amount would be cut in half or there could
be no increase depending on the effect of management on the actual
costs of the mental health benefit.
Question 27: A study conducted by the UCLA/RAND Research Center on
Managed Care found that techniques to intensively manage care,
including the use of provider networks and case management, is critical
to appropriate utilization and maintaining costs. Various estimates
have found a different cost increase depending on the amount of managed
care involved. Costs are higher when a group health plan offers a non-
managed health care plan to its employees. Is it not more likely that
where a health plan is not a managed care plan that its mental health
care costs are likely to be higher if this legislation is enacted? What
are the potential dangers to the quality of care if health plans are
unable to manage mental health benefits successfully as they are
currently able to do? Is it possible to contract with all potential
providers of mental health care?
Answer: At the present time, it is probable that less than 5
percent of health plans have no supply-side management of mental health
costs and rely completely on demand-side controls of higher co-
payments, visit-limits, and bed-day limits for controlling costs.
Patients covered under these plans have no protection against
catastrophic costs of medically necessary treatment for severe mental
disorders. Despite the enactment of the 1996 Mental Health Parity Act,
the lifting of annual and life-time dollar caps for mental disorder
treatment was undercut by the imposition of other treatment
restrictions or higher cost sharing. It is likely that in order to meet
the requirements of a ``full parity'' law, those few insurance
companies that do not manage their mental health benefits themselves
(carve-ins) or contract out with a managed behavioral healthcare
organization (MBHO) to manage the benefit, will probably make such
arrangements. At the present time, there appears to be adequate
capacity in the MBHO industry or in the insurance and HMO plans to
provide such management services for both public Medicaid services and
for private health plans. The committee is referred to the American
Managed Behavioral Health Association (AMBHA) and to the independent
consultant group Open Minds for additional information on the capacity
of this industry.
Question 28: I understand that an independent analysis was done a
couple years ago by the Lewin Group that concluded that for every one
percent increase in health care costs (beyond the normal rate of health
inflation) an additional 300,000 Americans lose their health care
coverage. I assume some of those lose their coverage because their
employers simply stop offering health insurance at some point. Is it
not also correct that many more lose their coverage, though, because
they cannot afford it themselves as the price goes up and up? Is it
possible that some employers may simply decide to drop mental health
coverage entirely if this legislation is enacted? If so, what sorts of
companies might be forced to make such a drastic decision in your
opinion?
Answer: I am not an expert on employee price sensitivity to the
cost of health insurance but I am aware of disagreement in the health
economics field over a formula predicting how many individuals lose
health insurance for every one percent of premium increase. It must be
noted clearly that there appears to be little or no evidence of any
significant dislocations attributable to mental health parity in the
many states that have implemented some form of parity law. Real-world
analyses of the actual impact of the 1996 Act (i.e., GAO and Hay Group)
show no significant dislocations occurring as a result of the 1996 law.
The General Accounting Office has criticized Lewin Group estimates
suggesting ratios of 1% = 400,000 loss and of 1% = 300,000 loss,
calling these questionable in a July 7, 1998 letter to Senator Jeffords
signed by William J. Scanlon, noting that ``Insufficient information is
currently available to predict accurately the coverage loss that may
result from health insurance premium increases associated with new
federal mandates.'' GAO also noted that rising premiums do not always
translate into coverage loss, commenting that ``Between 1988 and 1996,
health insurance premiums increased, on average, by approximately 8
percent per year. During roughly the same period, 1987 to 1996, the
proportion of workers who were offered insurance by their employers
rose from 72.4 percent to 75.4 percent, according to one study.''
Further, the Congressional Budget Office disavowed use of a formula
of 1% = 200,000 coverage loss for any purpose other than the original
legislation to which that CBO analysis applied, the Domenici amendment
to S. 1028, the Health Insurance Reform Act in April 1996. As CBO
Director June O'Neill said in a November 20, 1997 letter to
Representative Charles Norwood, ``Consequently, the mental health
parity estimate cannot be used as a general rule of thumb for the
impact of health insurance mandates on health insurance coverage.''
You asked if it is possible that some employers may simply drop
mental health coverage. MHETA does not require employers to offer
mental health benefits. However, I am unaware of any state where
passage of a mental health parity law led to a noticeable loss of
coverage, nor was there such an adverse effect after 2001
implementation of a more expansive parity benefit in the Federal
Employee Health Benefit Program. The CBO's estimate is that the
employer's share of the cost increase would be only 0.4%--less than
half of the average 0.9% cost increase. This suggests that MHETA
compliance will not be a large cost item necessitating dropping of
mental health benefits that are valuable to protecting the productivity
of one's workforce.
Question 29: (a) On page six of Dr. Regier's testimony, he quotes
someone who states ``insurers tend to provide poor mental health
benefits in order to avoid [enrollees with mental disorders].'' It is
difficult to understand this claim in the current context or in
general. In the group market, insurers are not selling to individuals
at all, but to groups. Under ERISA there is no ability to look at or
discriminate based on the conditions of individuals. Is there any
further basis for the above claim?
(b) Dr. Regier further notes that insurers shift costs from
insurers to employers who are not able to take advantage of the market.
This too is hard to comprehend. Employers purchase insurance, so, of
course, the costs are shifted to the purchaser. Employers, however, can
choose from among insurance products in a free market. Dr. Regier then
states: ``In effect, insurers are subverting responsible employers by
segmenting risk and costs and shifting the obligation of mental health
coverage onto an already overburdened public sector.'' Most employer
groups that I am aware of oppose this parity legislation. Some
employers provide broader insurance coverage, some provide less, and
others not at all. Some employers who provide coverage now may be
forced to drop this benefit if costs go up too much. Is there any
further basis for the statement that employers are not able to take
advantage of the market or that insurers are subverting responsible
employers?
Answer: The referenced quote on page 6 of my written statement is
by Richard G. Frank, Ph.D., Margaret T. Morris Professor of Health
Economics at Harvard Medical School. The quotation is from an article
by Dr. Frank (``Will Parity in Coverage Result in Better Mental Health
Care?'') published in the December 6, 2001 issue of the New England
Journal of Medicine.
Dr. Frank and his co-authors were fully cognizant of the fact that
insurers sell to groups and not to individuals, and that ERISA
prohibits explicit discrimination against employees with specific
disorders. However, the insurance industry understands that individual
insurance companies make the most money by seeking to minimize costs by
insuring the healthiest populations who have the least risk of
needing--potentially expensive health services. If, for example, a
large corporation or the Federal Government offer multiple insurance
plans to employees, a plan that promised very good mental health
benefits, cardiac care, or AIDS treatment would attract enrollees who
considered it likely that they would use such benefits. This would most
likely result in a self-selected group of enrollees who use more
services and decrease profits for the insurance company, a phenomenon
know as adverse selection.
Hence, if there is not a level playing field where coverage of
treatment for illnesses (such as mental illness) are equivalent, plans
that offer better mental health benefits will tend to attract and
accumulate higher cost enrollees while those that offer poor benefits
will attract low-cost and more profitable patients. For example, when
Aetna offered a superior mental health benefit in the early 1980's, its
costs increased in comparison to other insurers offering less
comprehensive coverage in a fee-for-service market. In the current
managed care market, costs have dropped, but there is still significant
variation in the scope of mental health benefits that are offered by
private insurers.
The need for comprehensive coverage of treatment for mental illness
tends to be underestimated because of stigma and ignorance of risk.
Insurance companies have thus been able to offer poor coverage as one
means of improving their competitive position in the insurance market.
Poor insurance coverage in turn shifts the cost of treatment onto
employees, via higher out-of-pocket expenses coupled with their
underlying premium payments for inadequate coverage. Under our current
discriminatory system, an employer offering very good mental health
coverage may attract employees with higher personal or family need--
for--such coverage. In effect, insurance coverage rather than job
opportunities may become the driving employment decision for these
employees. The failure to provide parity coverage of treatment for
mental illness remains an unaddressed objective of the Health Insurance
Portability and Accountability Act (HIPAA) of 1996. As you know, HIPAA
was intended in--large part to prevent insurance driven ``job lock''
for workers who otherwise would have taken advantage of the economy and
moved to new jobs but could not do so because insurers refused to cover
those new employees who had pre-existing health conditions.
With respect to mental health benefits, state insurance
commissioners have long recognized that insurance companies can
increase profits by refusing to cover certain mental health benefits,
resulting in ``safety-net'' cost-shifting from insurers to state mental
hospitals and publicly-funded community mental health centers. To limit
this cost shifting to state budgets, most states have long required the
provision of minimal mental health benefits before insurance plans are
licensed to do business in the state. More recently, 35 states have
required all insurance companies to provide some defined form of parity
mental health benefits to prevent such cost shifting. As you know,
however, ERISA exempts self-insured plans from such state regulation.
As a result, as few as 20-30 percent of the residents of individual
states may currently benefit from state parity laws.
Since HIPAA has made it impossible for insurance companies to use
strict limits on pre-existing conditions for competitive advantage,
insurers may seek advantages by offering poor mental health coverage.
Just as Congress acted to remove the incentives for offering strict
limits on pre-existing conditions, Congress clearly should act to
correct the failure of the market itself to eliminate discriminatory
coverage of treatment of mental illness. Leveling the playing field by
enacting broad mental health parity legislation is an appropriate
remedy that will ultimately prevent the shifting of costs to the public
sector and to responsible employers who, like Mr. Hackett, have
recognized the need for parity in mental health coverage.
With respect to the question about efforts by insurers or others to
subvert the market, Health Maintenance Organizations (HMOs) in
particular have sought to limit their responsibility for providing
broad mental health coverage. For example, the Public Health Service
Act lays out general requirements at Title XIII for Health Maintenance
Organizations (initially enacted in 1972), whereby the only ``basic
mental health service'' listed in Section1302[300e-1](D) were ``short-
term (not to exceed twenty visits), outpatient evaluative and crisis
intervention mental health services.'' This is hardly--broad based non-
discriminatory coverage of treatment, and underscores the ability of
many HMOs and private plans to shift costs by forcing individuals with
more severe and/or chronic mental disorders into the public sector.
As late as 1998, the Federal Employee Health Benefits (FEHB) plan
benefits descriptions for Aetna/US HealthCare, Cigna, and Kaiser Health
Plans excluded ``Care for psychiatric conditions which in the
professional judgment of Plan doctors are not subject to significant
improvement through relatively short-term treatment.'' Notably,--per
Executive Order, FEHB plans have effectively rescinded that provision
and are now offering parity coverage of treatment for mental and
substance abuse disorders to 9 million federal employees and their
families. The FEHB requirements provide the framework for H.R. 4066 and
S. 543. Surely employees in the rest of the country deserve what
federal employees and their families now have? Enactment of a national
mental illness treatment parity insurance coverage requirement is the
appropriate remedy for continued discriminatory and cost-shifting
strategy.
Question 30: Dr. Regier states there is no objective evidence that
businesses are paying for peripheral conditions to any statistically
significant degree. That is, of course, because there is no law
compelling that they cover such conditions. On page ten of Dr. Regier's
written testimony he states that ``malingering' is no more likely to be
covered in a post parity world than it is today.'' Can you provide an
example of clinically significant malingering, and reasons as to why
employers should be forced to cover this condition? Dr. Regier also
states ``it is remarkable that an insurance industry that has
historically sought to avoid responsibility for treating severe mental
disorders is today expressing concern that only severely mentally ill
patients should be covered by parity legislation.'' Please comment on
the basis for this statement.
Answer: Much has been made of peripheral conditions included in the
DSM-IV, such as the ``V-codes.'' It is important to understand that
because the DSM-IV is used by clinicians to apply ICD-9-CM codes to
insurance claims, the DSM-IV also contains many ``Conditions That May
Be a Focus of Clinical Attention'' that include the V-codes. These
conditions, as distinct from disorders, include malingering (V65.2),
Academic (V62.3), Occupational (V62.2) and Religious (V62.89) Problems
that may be an additional focus of clinical attention in any primary
care or specialty care medical practice. The multi-disciplinary and
international American Psychiatric Association DSM-IV workgroups never
developed any diagnostic criteria for these conditions. Thus, these
codes are included as a courtesy to the ICD-9-CM committee in order to
have comparable reporting of these reasons for seeking care with other
areas of medicine. Generally, these codes are not used as a primary
diagnosis to request payment for any mental health service--with the
exception of an evaluation to determine if a client's poor functioning
is the result of a true mental disorder or the result of malingering.
Insurance companies rarely if ever reimburse for V codes and this will
not change with parity. They are not mental disorders, have no
treatment guidelines, and cannot meet even the most lax medical
necessity criteria. The arguments about V-codes ignore these facts and
are intended to mislead Congress and the public.
If the Congress wishes to make it explicit that only mental
disorders and not these reasons for seeking care are to be covered in
the legislation, they can certainly do so. However, it must be stated
clearly that neither these ``Conditions'' nor any ``Diagnosis'' in the
DSM or the ICD-9-CM constitutes entitlement to treatment. In comparison
with the approximately 250 diagnoses in DSM-IV, ICD-9-CM has over
12,000 diagnoses and conditions that include diaper rash and premature
baldness that insurance companies do not have an obligation to treat.
Although having a diagnosis in the DSM-IV means that an important
threshold of severity has been passed (beyond what would be required by
the official ICD-9-CM), the level of severity and the availability of
effective treatments are other requirements of ``medical necessity''
that are used in determining an entitlement to treatment.
There is no shred of credible evidence that states or plans are
paying for treatment of the above-mentioned conditions or that they are
receiving requests for such payment in more than a miniscule percentage
of claims. The American Managed Behavioral Health Association (AMBHA)
just completed an analysis of claims data for 2001. The data represents
45 million covered lives and 11.5 million mental health claims totaling
$3 billion. The data shows that, for ``jet lag, a total of 12 claims
per million claims were actually filed, totaling $8 billed per $1
million billed, or 0.001 percent of total claims filed, and 0.0008
percent of total mental health dollars billed.
questions concerning compliance times
Question 31: H.R. 4066 has an effective date of January 1, 2003.
Does this date give employers enough time to make the needed, far-
reaching changes in their health plans, especially if the Department of
Health and Human Services does not have final regulations for at least
several months? Should the effective date be tied to some period after
the issuance of final regulations?
Answer: The effective date of legislation is inevitably the domain
of legislators. I note that health insurers routinely alter their plans
on a calendar year, and I believe that the effective date embodied in
the proposed legislation offers incentives to Congress to conclude
deliberations, and our regulatory agencies to promulgate implementing
regulations, in a timely fashion.
Thank you for the opportunity to respond to these important
questions. I will be happy to further address your concerns at any time
as Congress continues to correct this discriminatory practice towards
the mentally ill insured.
Sincerely,
Darrel A. Regier, M.D., M.P.H.
Director, Division of Research and Executive Director,
American Psychiatric Institute for Research and Education
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