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    Partnership Research

    Spotlight on Mental Health and Substance Use Disorder Parity Compliance Standards

    Published: December 2020

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    Spotlight on Medical Necessity Criteria for Substance Use Disorders

    Medical necessity criteria should reflect generally accepted standards of care for the patient’s condition. Yet, for substance use disorders (SUDs), some health plans have used medical necessity criteria to restrict care and control costs.
    Spotlight on Legislation Limiting the Use of Prior Authorization for Substance Use Disorder Services and Medications

    Prior authorization requirements impose a unique barrier for individuals seeking substance use disorder (SUD) treatment, delaying care at a critical moment.
    Insurance Resource Center

    In this resource center, we will explain some of the details of insurance. We will help you understand your rights to receiving coverage for proper substance use disorder care. There are many tools and resources you can use when trying to use your insurance to pay for care or when navigating a denial. The bottom line: you should never accept a “no” from your insurance company.

    Data and reporting are essential to ensure parity compliance. Produced in collaboration with the Legal Action Center, this report examines requirements for state-regulated private health plans to submit necessary data, and requirements for State Insurance Departments to report on their enforcement activities.

    Background

    In order to enforce the Mental Health Parity and Addiction Equity Act, regulators must have information that explains health plan features that may limit care.

    This information is typically not available to regulators because it is in the sole possession of health plans opposed to disclosure. Traditional regulatory enforcement activities — such as form review, post-market investigations and market conduct examinations, and consumer complaints — have proven inadequate to capture this information or prevent the sale of sub-standard plans.

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    Key findings

    • As of July 2020, 15 states and the District of Columbia have enacted laws requiring health plans to submit compliance reports and/or quantitative data on the development and application of non-quantitative treatment limitations (NQTLs) and quantitative data that identifies disparities in plans’ operations.
    • As of July 2020, 16 states and the District of Columbia have enacted legislation requiring State Insurance Departments to report on their enforcement activities to their state legislatures.
    • At least 30 states include some level of Parity Act compliance review as part of the insurers’ form submissions.

    Recommendations

    States should adopt laws requiring health plans to submit compliance reports and quantitative data on an annual basis and ensure that parity violations are resolved prior to sale of the plans. In addition, states should require their Insurance Departments to report annually on parity enforcement activities.

    The Partnership

    Last Updated

    October 2024