Empire State Clarifies Mental Health Parity Law

The New York State Insurance Department has put out a new round of guidance to help insurers interpret the state’s tough new mental health parity law.

The law, Timothy’s Law, goes far beyond federal mental health parity requirements and requires insurers, health maintenance organizations and group health plans sold by nonprofit insurers to offer comparable benefits for physical and mental health care.

The law was adopted in December 2006, and affected carriers are supposed to get policy form and rate submissions implementing the new requirements to insurance regulators by March 15.

Since the New York department issued a circular letter about the law earlier this month, “the department has received many inquiries about the requirements,” Charles Rapacciuolo, chief of the New York department health bureau, writes in Supplement Number 1 to Circular Letter Number 3 (2007).

“The department will be working with the industry as well as with provider and consumer groups and other interested parties to develop a proposal that clarifies the newly enacted law,” Rapacciuolo writes.

Meanwhile, Rapacciuolo writes, carriers should avoid applying an “active treatment” standard to outpatient mental health treatment benefits.

Requiring patients to seek inpatient care before getting outpatient benefits “would result in a limitation of mental health benefits not typically found in insurance policies issued prior to Timothy’s Law,” Rapacciuolo writes. “Such a result is inconsistent with the legislature’s intent to broaden access to mental health benefits.”

Because of cost concerns, nonprofit health insurers and health service companies do not have build Timothy’s Law benefits into individual policies, Rapacciuolo writes.