Witnesses from the American Benefits Council and the ERIC Industry Committee testified here today against a bill that could create new standards for employer-sponsored behavioral health benefits.

The bill, H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act, would add a section to the Employee Retirement Income Security Act requiring employers with more than 50 employees that offer any mental health benefits to cover the same mental health and “substance-related disorder” conditions covered by the Federal Employees Health Benefits Plan.

Rep. Patrick Kennedy, who introduced the bill, H.R. 1424, with Rep. Jim Ramstad, R-N.M., said during a hearing of the House Energy and Commerce Committee health subcommittee that studies have shown that FEHBP mental health parity standards adopted in 2001 have not increased overall FEHBP mental health and addiction treatment costs.

“This finding is consistent with virtually every study of state parity laws as well,” Kennedy said, according to a written version of his testimony. “But frankly, the very fact that we need to debate how much it costs to end insurance discrimination is offensive. Nobody is asked to justify the cost-effectiveness of care for diabetes or heart disease or cancer.”

Edwina Rogers, a vice president at the ERISA Industry Committee, Washington, a group that represents large employers, said at least one study has found that FEHBP mental health parity efforts have increased plan costs.

In addition, basing H.R. 1424 parity standards on FEHBP benefits could give some carriers an unfair advantage, Rogers said.

“More than 56% of FEHB beneficiaries are enrolled in Blue Cross Blue Shield plans,” Rogers said. “This, in essence, means that Blue Cross plans will always be in compliance [with H.R. 1424 requirements], while other plans will be forced to conform to the models adopted by Blue Cross. This has serious implications for plan competition and flexibility, and may lead to increased costs.”

James Klein, president of the American Benefits Council, Washington, testified that his group has significant concerns about H.R. 1424 provisions that would authorize states to set stricter standards than the bill itself sets.

The provision “opens the door for the states to develop separate enforcement and remedy schemes,” Klein said.

The U.S. Supreme Court frequently has found that the federal ERISA “remedy scheme” applies to all employer-sponsored health benefits, Klein said.

Klein also criticized the lack of specific protection for plan medical management practices in H.R. 1424.

Supporters of H.R. 1424 are doing up against supporters of another mental health benefits bill, S. 558, the Mental Health Parity Act, which was introduced by Sen. Pete Domenici, R-N.M.

That bill would prohibit employers from making financial requirements for any mental health benefits offered any more restrictive than the financial requirements for other medical or surgical benefits.

Many insurance industry and employer groups have lined up to support S. 558, in part because it would set national standards, and in part because of a provision that would permit plans to contract with mental health providers and use procedures such as utilization review to manage use of care.

The National Association of Health Underwriters, Arlington, Va., and the Blue Cross and Blue Shield Association, Chicago, recently joined with many other organizations, including the American Psychological Association, Washington, and the American Psychiatric Association, Arlington, to write a letter urging the Senate the reject H.R. 1424 and approve S. 558.

Klein observed during the subcommittee hearing that neither H.R. 1424 nor S. 558 applies to Medicare, Medicaid or other government health insurance programs.

“We believe it is simply indefensible for Congress to impose parity requirements on employer-sponsored health coverage while ignoring the same issues in the programs where it has direct responsibility,” Klein testified.

Links to copies of written versions of the testimony of Klein and other hearing witnesses’ testimony are on the Web