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Health Care Costs and Financing

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Inequities continue in reimbursement for mental health care compared with physical health care

The goal of the Mental Health Parity Act (MHPA) of 1996 was to establish equity of health insurance coverage of mental health care and physical health care. For example, the MHPA prohibited the use of different lifetime and annual benefit limits for physical and mental illness. Yet inequity of coverage for mental health care remains, according to the findings of a 4-year study of denials of coverage by payers of inpatient care. The study was supported in part by the Agency for Healthcare Research and Quality (HS10667) and conducted by University of Wisconsin School of Nursing researchers, Mary Ellen Murray, Ph.D., R.N., and Jeffrey B. Henriques, Ph.D.

The researchers compared reimbursement denials for psychiatry at one hospital to denials for the hospital's other clinical services with a similar number of annual admissions and utilization reviews (which determine if planned care is appropriate, medically necessary, and allowable). For each of the 4 years studied (1998-2001), psychiatry had the highest numbers of cases denied (52) and patient days denied (237) compared with oncology, neurology, family practice, and other clinical services. The most frequent reason for a psychiatric denial was that the inpatient benefit level (of allowable dollars or hospital days) had been exceeded, a reason cited only once in 4 years for a patient with a physical illness.

Similarly, the care of a patient admitted to a psychiatric service was four to eight times as likely to be reviewed as the care of a patient admitted to family practice. There was no consistent downward trend in cases reviewed, cases denied, or days denied for psychiatric cases that would indicate progress toward parity with medical cases. Either more stringent utilization review is taking place or treatment of mental illness is less well understood, and standards of care are less clear. On the other hand, payers may comply with the MHPA by providing equal lifetime coverage but implement new measures that restrict coverage of hospital days for mental illness compared with medical illness.

See "A test of mental health parity: Comparisons of outcomes of hospital concurrent utilization review," by Drs. Murray and Henriques, in the July 2004 Journal of Behavioral Health Services & Research 31(3), pp. 266-277.

Editor's Note: Another AHRQ-supported study on a related topic examined mental health reform in New Mexico, which requires all State agencies that finance mental health and substance abuse services to establish an interdepartmental behavioral health purchasing collaborative to coordinate, administer, and oversee these services. For more details, see Willging, C.E., and Semansky, R.M. (2004, September). "Another chance to do it right: Redesigning public behavioral health care in New Mexico." (AHRQ grant HS09703). Psychiatric Services 55(9), pp. 974-976.

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