Latest / The Mental Health Evolution / Ep 36: The Reality of Parity Enforcement

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Ep 36: The Reality of Parity Enforcement · The Mental Health Evolution

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Welcome to Mental Health Evolution, a podcast about
1:17
what's changing in mental health and why it
1:20
matters.
1:20
I'm your host, Rachel Harrison, inviting you into
1:23
honest conversations with people from all perspectives in
1:27
the field.
1:28
Clinicians, tech founders, investors, insurance companies, and all
1:32
the folks in between.
1:33
Let's explore what's working, what's not, and what's
1:36
next.
1:44
Hello, hello, everyone.
1:47
Welcome back to the Mental Health Evolution podcast.
1:51
Today, we are going to do a solo
1:55
episode.
1:56
I'm Rachel Harrison, and we're going to talk
1:58
a little bit about mental health parity and
2:01
its enforcement and what it is and how
2:05
why it matters to everyone in this industry
2:08
and people who access mental health care.
2:11
If you spent any time with insurance, you
2:14
already know that health care coverage, mental health
2:17
coverage specifically, often works differently in practice than
2:21
it does on paper.
2:22
And today, I want to talk about a
2:24
case that makes that gap very concrete.
2:27
Aetna was just fined $550,000 by the
2:32
state of Pennsylvania for mental health parity violations,
2:36
and the details of what they found are
2:39
definitely worth understanding.
2:41
Parity is not a new topic here.
2:44
We covered this from a policy and advocacy
2:47
perspective on our episode with Deborah Steinberg of
2:50
the Legal Action Center.
2:52
And we'll put that link in the show
2:53
notes in case you want to go back
2:55
and reference that as well.
2:56
But that conversation gave a strong foundation for
3:00
understanding what parity is supposed to mean and
3:03
why it's been so difficult to achieve that
3:06
in practice.
3:07
What we have not talked about yet is
3:09
enforcement.
3:10
What it actually looks like when a state
3:13
holds an insurer accountable, what the violations were,
3:17
and what this case tells us about the
3:19
broader landscape right now.
3:21
We are not just trying to highlight Aetna
3:23
because they are certainly not alone, but the
3:25
example of what's happening gives us a great
3:28
talking point.
3:29
And so that's what today's episode is all
3:32
about.
3:33
As always, we like to provide a little
3:36
bit of context around parity.
3:38
And parity, if you're like, gosh, I've heard
3:41
that word, it's familiar, I should know what
3:43
it means, but I'm not referencing that right
3:45
now.
3:45
Essentially, it's that mental health care and substance
3:48
abuse will be treated just like any other
3:51
medical condition, and insurers need to show that
3:55
they are reimbursing in the same way that
3:58
they are providing authorizations and access to care
4:01
in the same way as they would other
4:04
medical conditions.
4:05
But let's start with some of these articles,
4:08
because I think this will give you some
4:09
background, too.
4:11
The first one is about the case we're
4:14
going to talk about here today.
4:15
And it's titled, The Shapiro Administration Protects Consumers,
4:20
Fines Aetna $550,000 for Violations of Mental
4:25
Health Parity Laws, published by the Pennsylvania Insurance
4:29
Department.
4:29
And this is the official state announcement detailing
4:33
exactly what Aetna did.
4:35
So we're going to talk a little bit
4:36
about it.
4:37
But if you want to do a little
4:39
bit more of a deep dive and figure
4:41
out what that's all about, we have that
4:43
article reference for you.
4:45
The second article here is called Pennsylvania Insurance
4:50
Regulators Find Aetna $550,000 for Violations of
4:54
Mental Health Parity Regulations.
4:56
This one, similar title, I know, published by
4:59
the Philadelphia Inquirer.
5:02
And this piece adds some important historical context,
5:05
including that Aetna was fined by Pennsylvania for
5:08
similar violations back in 2019.
5:11
And it covers how the company applied more
5:14
stringent standards to autism therapy in particular and
5:18
opioid addiction treatment than to medical and surgical
5:22
care.
5:23
So that link there for you.
5:25
The next article is called Health Insurers Pay
5:29
Penalty for Mental Health Parity Compliance Failures.
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This one published by the HIPAA Journal.
5:36
And this article broadens the picture, covering a
5:39
similar fine against Regence Blue Shield in Washington
5:43
state and an Anthem class action settlement.
5:46
And just showing, like I said earlier in
5:49
the intro, that Aetna is just part of
5:52
the problem there.
5:53
They're the most recent example that we're talking
5:55
about, but certainly they are not alone.
5:58
And lastly, the last article is titled Departments
6:01
Announce Non-Enforcement of 2024 Mental Health Parity
6:05
Rule Published by APA Services.
6:08
And this piece explains the federal enforcement pause
6:12
on the 2024 MHPAEA final rule.
6:17
I'm going to get into details about what
6:19
that means.
6:19
It's essentially the Mental Health Parity and Addiction
6:23
Equity.
6:24
So you'll hear me reference that, and I'll
6:25
try to spell that out as we're talking
6:27
today.
6:28
And what that means for existing protections and
6:30
why state-level enforcements like Aetna, the Aetna
6:34
fine, are carrying more weight right now.
6:36
So let's dive into discussing this a little
6:41
bit more.
6:42
Before we get into the specifics of the
6:44
Aetna case, I do want to make sure
6:46
that we are talking about parity.
6:48
And getting a clear definition, getting a little
6:51
bit of the history, and what it looks
6:54
like when it impacts people's lives.
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So, as I mentioned before, the MHPAEA, called
7:02
the Mental Health Parity Addiction and Equity Act,
7:06
was passed in 2008.
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So, a good while back.
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The core principle is straightforward.
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Like I mentioned before, the insurance plans cover
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mental health and substance abuse disorder services.
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They cannot impose more restrictive limits on those
7:22
services than they impose on medical or surgical
7:25
care.
7:26
So, it means things like comparable co-pays,
7:29
comparable prior authorization requirements, comparable visit limits,
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comparable criteria for what counts as medically necessary,
7:37
and comparable reimbursement rates.
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The law has been on the books for
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nearly 20 years, and yet enforcement has been
7:45
inconsistent.
7:46
Loopholes have definitely been exploited, and the gap
7:50
between what the law says and what people
7:52
might actually experience has remained pretty wide.
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So, let's talk about what happened in Pennsylvania,
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the most recent piece of parity.
8:03
The Pennsylvania Insurance Department conducted what is called
8:06
a market conduct exam, which essentially is their
8:11
deep dive audit of how an insurer is
8:14
actually operating.
8:15
The exam covered Aetna's practices from October 2021
8:19
through December 2022.
8:23
What they found was a pattern of failures
8:25
that had real consequences for policyholders.
8:28
Aetna had incomplete claim files for autism spectrum
8:33
disorder services, including applied behavior analysis therapy.
8:37
There were unexplained delays in approving or denying
8:41
claims, and this is kind of a known
8:43
thing that can happen where claims end up
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in some la-la land.
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They're not approved, they're not denied, and they're
8:49
just sitting there.
8:50
There were improper claim denials tied to poor
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internal communication about prior approvals.
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And critically, the department found that Aetna was
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using flawed methods for reviewing its own parity
9:03
compliance, meaning the internal processes designed to catch
9:08
these problems were basically not working.
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There was also a very specific issue around
9:13
transparency.
9:15
Aetna was not clearly communicating to members what
9:18
their cost-sharing responsibilities were for autism-related
9:21
services, and they were not sending required claim
9:24
delay letters during this period.
9:27
These are not minor paperwork issues because they
9:30
translate to families not understanding what they owe,
9:33
providers not getting paid, and children not getting
9:37
the therapy that they are entitled to under
9:39
their plan.
9:40
So the result is this $550,000 fine,
9:44
a consent order signed in January 2026, and
9:48
a requirement to reprocess affected claims and repay
9:52
members with interest within 12 months.
9:55
Here is what I want to highlight about
9:56
this case in particular.
9:58
It's not the first time.
9:59
As I mentioned in those articles, Aetna has
10:02
been here.
10:03
Pennsylvania specifically fined Aetna for similar parity violations
10:07
back in 2019 and many of the same
10:09
category violations that appeared again more than two
10:12
years later.
10:13
And that raises questions about whether fines at
10:17
this level are functioning as a meaningful deterrent
10:20
or whether they are just a cost of
10:23
doing business for a company of Aetna's size.
10:26
And again, Aetna's not alone.
10:28
Washington state fined Regents Blue Shield $550,000
10:32
for a lack of transparency around its parity
10:35
compliance, finding that the insurer could not provide
10:39
documentation demonstrating that its mental health and substance
10:42
abuse disorder benefits were comparable to its medical
10:46
and surgical benefits.
10:48
Anthem, now known as Elephants Health, agreed to
10:51
a nearly $13 million class action settlement over
10:55
allegations that it denied claims for residential mental
10:58
health and substance abuse disorder treatment using medical
11:02
necessity criteria that were more restrictive than those
11:05
that applied to comparable medical care.
11:08
These cases are landing across different states, different
11:11
insurers, different types of violations.
11:14
Although the through line is the same, that
11:16
mental health services are being treated as a
11:18
category that requires more justification, more documentation, more
11:23
prior authorization, and more hurdles than medical care
11:27
in violation of a law that has been
11:29
in place for almost two decades.
11:31
So that's what's happening at the state level.
11:34
Let's talk about the federal level because this
11:37
is where things get a little more complicated.
11:40
In 2024, the Biden administration, remember the original
11:44
law was passed in 2008.
11:47
It's been around a while.
11:49
In 2024, Biden issued what was called the
11:52
2024 Final Rule, a major update to the
11:56
MHPAEA, regulations designed to close longstanding loopholes, particularly
12:03
around what are known as non-quantitative treatment
12:07
limitations.
12:08
So these are the harder to see restrictions
12:12
like prior authorization requirements, step therapy protocols, network
12:18
adequacy standards, and reimbursement rate structures that can
12:23
effectively make mental health care less accessible even
12:26
when the plan technically covers it on paper.
12:30
These are some of the loopholes that were
12:31
being closed.
12:33
And in May 2025, the Departments of Labor,
12:37
Health and Human Services, and Treasury announced that
12:40
they would not enforce the 2024 Final Rule
12:43
following a legal challenge from an employer-industry
12:47
coalition.
12:48
The administration has indicated it may revise or
12:51
rescind that rule through a formal rulemaking process.
12:56
This does not mean that the parity law
12:58
disappeared.
12:59
The core statutory requirements of MHPAEA are still
13:04
in effect, and the 2013 regulations and the
13:08
2021 Consolidated Appropriations Act requirements still apply.
13:13
But it does mean that the strongest and
13:16
most specific new enforcement tools are on hold.
13:20
And it creates uncertainty about how vigorously the
13:23
federal government will pursue parity compliance in the
13:26
current environment.
13:27
I will mention that we talked a good
13:30
length about that in the previous podcast episode
13:33
with Deborah Steinberg that I mentioned earlier.
13:36
So that is the landscape in which state
13:38
insurance departments like Pennsylvania's become more important.
13:42
When federal enforcement slows, states that have built
13:45
robust market conduct exam programs and are willing
13:48
to use them are a last line of
13:51
accountability.
13:52
I want to pause this kind of broader
13:55
official conversation and talk about some of the
13:59
experiences that I have had locally around parity,
14:03
because in some of the states where we
14:05
operate, this is something that has been a
14:08
big topic.
14:09
So it has been interesting to me because
14:12
here in Maryland, there was a bill this
14:14
past session called the Maryland Senate Bill 774,
14:17
which focused on increasing transparency around how insurers
14:21
are covering and reimbursing behavioral health care compared
14:25
to medical care.
14:26
And it's a good example of how states
14:28
are stepping in to strengthen and clarify existing
14:31
federal parity requirements, especially where enforcement is limited.
14:36
This bill would have helped make it clear
14:38
where disparities exist in things like reimbursement and
14:42
access, but it did not move forward in
14:44
the House before the end of the session.
14:46
It hasn't become law, but it did progress,
14:49
and it's expected that something in this space
14:51
may be reintroduced in a future session.
14:54
These are definitely things that if they're happening
14:57
in your state and you're interested in supporting
14:59
it, you can definitely sign petitions and get
15:02
involved to try to help some of these
15:04
bills get passed.
15:06
So what this means for our field.
15:09
I want to spend a moment talking to
15:12
people who are maybe clinicians, maybe practice owners,
15:17
business owners, because the story affects you whether
15:21
or not you ever file a parity complaint
15:24
yourself.
15:25
Every time a client is denied coverage for
15:28
a service that their plan should cover, that
15:31
denial lands somewhere.
15:33
Sometimes it lands with the client, and maybe
15:37
they can or maybe they can't afford to
15:39
pay out of pocket, and they either go
15:42
without care or maybe they drop out of
15:44
treatment.
15:45
Sometimes it lands with the practice or the
15:47
provider, which absorbs the loss or spends hours
15:51
on the phone trying to appeal the decision.
15:54
As many people know, you might spend easily
15:57
two hours on a phone call trying to
16:00
get a hold of someone to address an
16:03
issue with an insurance claim.
16:05
Sometimes it means a provider stops accepting that
16:08
insurance entirely, which then shrinks the network and
16:11
further makes access harder for everyone.
16:15
The Aetna case is specifically focused on autism
16:18
spectrum disorder services and applied behavior analysis therapy.
16:21
But the mechanisms at work, the flawed compliance
16:25
methods, the opaque cost-sharing disclosures, unexplained claim
16:29
delays, improper denials, those show up in the
16:33
full range of mental health and substance abuse
16:35
disorder services.
16:37
If you have seen clients lose coverage mid
16:39
-treatment, receive denials that felt inconsistent with the
16:43
clinical picture, or spent significant time on prior
16:46
authorization processes that your medical colleagues do not
16:50
deal with for comparable levels of care, then
16:53
you have seen parity failure in action.
16:56
Knowing that enforcement exists and that it sometimes
17:00
works matters.
17:02
State insurance departments have compliant mechanisms, and documented
17:06
pattern of complaints can contribute to the kind
17:10
of market conduct exams that led to the
17:12
Aetna finding.
17:13
That does not mean that the system is
17:16
easy to navigate, but it does mean that
17:20
it is not entirely without teeth.
17:22
And for those of you who might be
17:24
thinking of which insurers to credential with or
17:27
how to counsel clients about their coverage, cases
17:30
like this are worth paying attention to.
17:33
They tell you something about how an insurer
17:35
operates internally and whether they take their parity
17:39
obligations seriously.
17:40
Looking ahead, I think it's important to think
17:44
about that parity enforcement is not a solved
17:47
problem.
17:48
It's an ongoing one, and right now it
17:50
is happening primarily at the state level, while
17:53
the federal picture remains uncertain.
17:56
Some states are investing seriously in this work,
17:59
others are not.
18:00
The variation matters enormously depending on where your
18:03
clients live and which insurance products they hold.
18:06
If you want to go deeper on the
18:08
policy and advocacy side of parity, our episode
18:12
that I've mentioned, I think now two other
18:14
times, with Deborah Steinberg of the Legal Action
18:17
Center is a strong companion to this one.
18:20
The conversation that gets into what parity is
18:22
supposed to mean and the advocacy work being
18:25
done makes it real.
18:26
This episode is about what happens when it
18:29
falls short and what enforcement can look like.
18:33
When states step up, and a lot of
18:35
states have insurance commissions that are really listening,
18:38
paying attention, and doing just that.
18:41
So, thank you for listening to today's episode.
18:45
And though we talked about the Aetna case
18:47
in specific, remember this is happening all over,
18:51
and your voice matters.
18:53
If you want to get involved, you can
18:55
certainly sign petitions for legislation in your state.
18:59
You can also send a complaint to your
19:02
state's insurance commission if you believe as a
19:05
client or as a clinician that there have
19:07
been issues with the way that you've been
19:09
able to access mental health care or substance
19:12
abuse care.
19:13
It's worth raising your voice.
19:15
So, we all work together to do the
19:17
best we can to get the best care
19:19
for anyone that needs to access mental health
19:22
and substance abuse services.
19:24
So, we will be back next week talking
19:28
about other issues shaping mental health care today.
19:31
Thank you for listening to this one, and
19:34
bye for now.
19:35
Thanks for listening to the Mental Health Evolution
19:38
podcast.
19:39
Join the conversation.
19:40
Find us on social, send us your thoughts,
19:43
and tell us what you're seeing in your
19:45
corner of the mental health world.
19:46
Until next time, stay curious and keep evolving.
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