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Life Health > Health Insurance > Life Insurance Strategies

Empire State Clarifies Mental Health Parity Law

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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.

Policies that provide coverage only for hospital care need only cover facility-based outpatient mental health services, Rapacciuolo adds.

Rapacciuolo also writes about the contractual definition of “mental, nervous or emotional disorders or ailments” that carriers should use.

Carriers can use the definition included in the state’s Empire Plan, Rapacciuolo writes.

That definition reads as follows:

Mental Health Care means medically necessary care rendered by an eligible practitioner or approved facility and which, in the opinion of [the insurer], is directed predominantly at treatable behavioral manifestations of a condition that [the insurer] determines (a) is a clinically significant behavioral or psychological syndrome, pattern, illness or disorder; and (b) substantially or materially impairs a person’s ability to function in one or more major life activities; and (c) has been classified as a mental disorder in the current American Psychiatric Association Diagnostic and Statistical Manual of Mental Disorders.

If a carrier decides to write its own definition, “it should refrain from using the terms ‘acute,’ ‘short term,’ ‘amenable to short term therapy,’ ‘serious,’ or similar words or phrases in its definition,” Rapacciuolo writes. “While those terms may have been acceptable in the past in defining non-mandated mental health benefits, they are inconsistent with the requirements of Timothy’s Law.”

A copy of the circular letter supplement is on the Web at Document Link


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