House Passes Mental Health Parity Legislation

Main Category: Mental Health
Also Included In: Health Insurance / Medical Insurance
Article Date: 07 Mar 2008 - 10:00 PDT

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The House on Wednesday by a 268-148 vote passed a bill (HR 1424) that would require most health insurers to provide equal levels of coverage for physical and mental illnesses, the AP/Contra Costa Times reports (Miga, AP/Contra Costa Times, 3/6). According to the San Francisco Chronicle, passage of the legislation is "significant because mental health parity laws have been introduced in Congress for many years but routinely stalled in the Republican-dominated House" (Colliver, San Francisco Chronicle, 3/6).

Under the bill, health insurers could not require larger copayments or implement lower reimbursement caps for mental illnesses, if they choose to cover mental illnesses (Pear, New York Times, 3/6). In addition, the bill would require health insurers to cover all mental illnesses and substance abuse disorders listed in the Diagnostic and Statistical Manual of Mental Disorders compiled by the American Psychiatric Association (Leuck, Wall Street Journal, 3/6). The legislation would apply to group health plans and would not affect plans for employers with 50 or fewer employees (New York Times, 3/6).

Offset Provisions
The bill includes provisions to offset the cost of about $4.3 billion over 10 years. The legislation would increase the rebates that pharmaceutical companies must provide state Medicaid programs to raise $2 billion over 10 years.

In addition, the bill would place new restrictions on physician-owned specialty hospitals to raise $2.4 billion over 10 years (Wall Street Journal, 3/6). Under the provision, physicians could not refer patients to hospitals in which they have a financial interest. Critics maintain that "physicians' ownership interest gives them an incentive to refer patients to the facility and to increase volume unnecessarily" and that a "ban on referrals to new specialty hospitals would reduce the number of medical procedures being performed, which would result in savings," CQ Today reports.

The Bush administration opposes both provisions (Armstrong, CQ Today, 3/5).

House, Senate Reconciliation
According to the Wall Street Journal, lawmakers have "more work ahead if the provisions are to become law this year," as the "House bill must be reconciled with a Senate-approved version (S 558)" (Wall Street Journal, 3/6). Senate leaders have "threatened to block a conference on the mental health bills because they are reluctant to let the House provisions creep into their legislation," CQ Today reports (CQ Today, 3/5).

Health insurers and employers support the Senate version of the bill, and many oppose the House version, which they maintain would increase costs (New York Times, 3/6). The Senate version of the legislation gives insurers greater flexibility in determining which mental illnesses and substance abuse disorders to cover (Wall Street Journal, 3/6).

The House version of the legislation also includes language from a bill (HR 493) that would prohibit discrimination against U.S. residents by health insurers and employers based on the results of genetic tests. The Senate version of the bill does not include similar language (CQ Today, 3/5).

According to the Chronicle, the "passage of both bills sets the stage for the two chambers to try to reach some sort of compromise because the stakes are high" (San Francisco Chronicle, 3/6).

Reaction
The Bush administration opposes the House version of the bill (New York Times, 3/6). According to a statement, the "administration has concerns with HR 1424, which would effectively mandate coverage of a broad range of diseases and conditions and would have a negative effect on the accessibility and affordability of employer-provided health benefits." However, President Bush did not threaten to veto the legislation (Johnson, CongressDaily, 3/6).

The U.S. Chamber of Commerce called the House version of the bill "mental health insanity" and the Senate version a "careful compromise." America's Health Insurance Plans officials said the group opposes the House version of the bill and supports the Senate version. In addition, Eli Lilly officials said that the company opposes the House version of the bill because of the Medicaid provision (Wall Street Journal, 3/6). APA supports the bill (New York Times, 3/6).

Additional Comments
Rep. Patrick Kennedy (D-R.I.), who sponsored the House version of the bill, said, "We are spending in our emergency rooms too much money on taking care of all of the acute cases as a result of mental illnesses," adding, "Why not take care of people before they end up getting into the emergency rooms?"

Sen. Edward Kennedy (D-Mass.), who sponsored the Senate version of the legislation, said, "I don't think we'll go to conference" on the bills.

Rep. Nathan Deal (R-Ga.) said, "The House has ... decided to jeopardize the possibility of getting mental health legislation this year by ignoring the consensus in the Senate."

Michael Burgess (R-Texas) said of the House version of the bill, "The offsets are counterproductive," adding, "Specialty hospitals are strong in quality and performance."

Rep. Frank Pallone (D-N.J.) said, "These physician-owned hospitals are a problem because they're over-utilized. We're trying to end this practice of self-referral" (CQ Today, 3/5).

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