What’s New In The Insurance World
By Paul J. Spergel MA,LPC
NJCA Insurance Liaison

As you probably have heard, the parity law has passed the congress and we are now embarking on a new thinking when it comes to the topic of mental illness. This law changes the way we provide mental health treatment for our clients. The big question is “what does parity mean.” I am going to talk to you today about what this means for us and how it impacts our treatment of mental health services to our clients.

In layman’s terms, the parity law indicates that insurance companies are required to provide the same coverage for mental health as they do with any other medical diagnosis. The insurance companies have to provide unlimited coverage (that is number of sessions) to clients who have the following biologically based mental illnesses. What is a biologically based mental illness? The Act defines "biologically-based mental illness" as a mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with certain illness. These disorders include but not limited to, schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, paranoia and other psychotic disorders, obsessive-compulsive disorder, panic disorder and pervasive developmental disorder or autism. Under the Act, copayments, deductibles or benefit limits applied to biologically-based mental health benefits cannot be different than those applied to other medical or surgical benefits.

The new law states that the illness must me biologically based and must meet “Medical Necessity”. Medical necessity means that a client must meet certain criteria concerning severity of mental distress (set forth by the insurance company) to continue treatment. Each insurance company defines medical necessity as something different. You can call the insurance company or go online to each insurance company and receive a free copy of the medical necessity criteria.

 Although we have been lobbying for this law to pass for some time there are some downsides to this new law. This new law states that if there are less than 50 people on a group plan parity does not apply. So if your company employs less than 50 people your company can choose not to follow this law. If you have an individual plan, this law may not apply. Also if your diagnosis is not biologically based or doesn’t meet medical necessity this law doesn’t apply. So where does that leave us as providers?

 It is my recommendation that you call the insurance company to find out if parity applies. Always call to confirm benefits, copay’s and deductibles as well as claims addresses.  THIS LAW DOES NOT GAURANTEE THAT THE CLIENT HAS UNLIMITIED BENEFITS AND DOES NOT GUARANTEE THAT YOU WILL RECEIVE PAYMENT FOR YOUR SERVICES.

If you would like more information as to the parity law please visit http://www.cms.hhs.gov/healthinsreformforconsume/04_thementalhealthparityact.asp for more information. You can also contact me at 973-527-7072 for more information.