By John Kamilis of CuraLinc Healthcare
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (commonly referred to as the Mental Health Parity Act), which takes effect during annual plan renewals beginning on or after Oct. 3, 2009, is a source of concern for employers worried about the impending increase in their health care costs. The legislation prohibits group health and self-insured plans covering more than 50 employees from imposing caps or limitations on mental health treatment or substance use benefits that are not also applied to medical and surgical benefits. Because of this, many employers will have to increase the mental health and substance abuse coverage in their benefit plans.
• Estimates of cost increases to employers that are complying with comprehensive state mandates range from 1 percent to more than 3 percent of total health care costs (Mercer, Guidelines for Cost-Effective Implementation of the Mental Health Parity and Addiction Equity Act of 2008).
• Plans without some form of behavioral health management can expect increases in outpatient costs of up to 30 percent (Milliman, An Actuarial Analysis of the Impact of HR 1424).
Health Plan or EAP: The Gatekeeper's Role
For organizations that continue to provide mental health/substance abuse coverage, their employee assistance program (EAP) might have plan design options that can mitigate the financial impact of the Mental Health Parity Act. One of those options, a mental health/substance abuse "gatekeeper," benefits employers and plan participants by redirecting EAP-appropriate cases into the EAP while guiding members with acute mental health or substance abuse needs to an appropriate in-network provider within the health benefit plan.
Even after the Mental Health Parity Act goes into effect, companies that use their EAP to act as a first stop for employees accessing mental health/substance abuse services might see their health care costs go down. An EAP with a mental health/substance abuse gatekeeper should have a direct financial offset of 1 to 1 or better. However, the key to success with this model is ensuring that the EAP provider is committed to addressing short-term counseling cases within the program.
The gatekeeper service takes direct aim at mental health/substance abuse costs in two ways:
• Redirection. The majority of mental health/substance abuse claims are for outpatient (short-term) counseling. From the onset of the case, members with short-term counseling needs are guided into the most appropriate avenue of care, which is usually the EAP. In a five-session EAP model, 70 percent of outpatient counseling cases can be addressed within the framework of the program. By providing the right mode of care from the point of entry, employers benefit by mitigating the financial impact of a case that would have otherwise generated a claim.
• Advocacy. Members with acute mental health/substance abuse needs that require inpatient care, partial hospitalization, medication management or long-term outpatient services are guided to the most appropriate in-network care choices within their benefit plan. An effective mental health/substance abuse gatekeeper can reduce out-of-network utilization by over 50 percent.
"Our clients with an integrated EAP/gatekeeper model are experiencing EAP case utilization that is two to three times higher than we have seen from programs without the gatekeeper component," says Mindee Zis, senior account executive at Allied Benefit Systems Inc., a Chicago-based third-party administrator. "If this model weren’t in place, many of these additional cases would have gone into the health plan for treatment, with an average cost ranging from $126 to over $900 per case."
John Kamilis is director of clinical services with CuraLinc Healthcare, a Chicago-based provider of behavioral health and wellness programs.
Survey: Employers Plan to Continue Mental Health Coverage, SHRM Online Benefits Discipline, June 2009
SHRM Provides Input on Shaping Mental Health Parity Regulations, SHRM Government Affairs, June 2009
Mental Health Parity: Benefit Design Challenges, SHRM Online Benefits Discipline, May 2009
New Mental Health Parity Law Raises Cost Concerns, SHRM Online Legal Issues, October 2008
Mental Health: Countering the High Cost of Stress and Depression, SHRM Online Benefits Discipline, June 2007
Employer Survey: Mental Health Parity Law (Benefit Changes), Partnership for Workplace Mental Health, May 2009
Preparing for Parity: Investing in Mental Health, Milliman White Paper, May 2009
SHRM Online Benefits Discipline