GOVERNMENT & MEDICINE

House passes mental health parity bill

Doctors object to a funding provision that would ban physician referrals to hospitals in which they have an ownership stake.

By Doug Trapp, AMNews staff. March 24/31, 2008.

Washington -- The House has set the stage for potentially tough congressional negotiations on mental health parity by adopting broader legislation than the Senate.

The Paul Wellstone Mental Health and Addiction Equity Act of 2007, which the House passed 268-148 on March 5, would strengthen existing law by requiring insurers to provide out-of-network mental health coverage if insurers offer out-of-network physical health benefits. Among other provisions, it also would require companies offering mental health benefits to cover illnesses in the Diagnostic and Statistical Manual of Mental Disorders, rather than letting plans set their own scope of coverage.

Discuss on Sermo

How to pay for parity
See related content
Topic: The uninsured

The bill's passage was both a victory for mental health advocates and cause for concern that it might lead to a stalemate with the Senate, which adopted its own, more limited mental parity bill last year. Business organizations, which have historically opposed mental health parity measures, helped craft the Senate bill during lengthy negotiations with patient advocacy groups. The business community opposes the stronger House bill.

The American Medical Association supports the health provisions in both the House and Senate measures but opposes language in the House bill that would ban physicians from referring patients to hospitals in which they have an ownership interest. It would save an estimated $2.4 billion in federal health spending, in theory, by reducing unnecessary referrals, tests and procedures.

The Pharmaceutical Research and Manufacturers of America likewise supports expanded mental health benefits, but not a provision that would increase from 15.1% to 20.1% the minimum rebate manufacturers must offer under Medicaid for brand-name drugs. This would raise $1.9 billion. "We do not believe that increasing this rebate tax is an appropriate way to pay for other discretionary programs," said PhRMA Senior Vice President Ken Johnson.

Rep. Patrick Kennedy (D, R.I.), the House parity bill's sponsor, said the health system doesn't provide enough preventive care for people with mental illnesses. "Why not take care of people before they end up in the emergency room? Why not take care of the people before they end up in our jails?" he said during House floor debate on the bill.

Sen. Mike Enzi (R, Wyo.), who helped negotiate the Senate bill, drew a line on expanding benefits beyond that measure. "I am disappointed that the Democratic leadership in the House rejected the opportunity to act on the Senate bill, which has broad support, and instead chose to wage an uphill battle for a bill we all know stands no chance of becoming law."

Mental health advocates have been working to broaden protections since the Mental Health Parity Act of 1996 was enacted. That law prohibits insurers from imposing stricter lifetime or annual caps on mental health benefits than they have for physical health benefits.

The House bill and the Senate's Mental Health Parity Act of 2007, adopted unanimously last September, would expand on that statute by including substance abuse treatment and requiring insurers to bring equality to deductibles, co-payments, coinsurance, and the number of visits and days allowed in the hospital. But mental health parity supporters -- such as Kennedy -- point out the Senate measure would allow insurance companies to determine which illnesses they cover.

House passage of the bill could spark an unusual father-son talk. Rep. Kennedy's father, Sen. Edward Kennedy (D, Mass.), who helped negotiate the Senate measure, will be a key figure in crafting a compromise between the House and Senate parity bills. Melissa Wagoner, spokeswoman for the senior Kennedy, said the senator looks forward to negotiating a bill that will be signed into law.

President Bush, in a March 5 statement of administration policy, indicated that he favors the Senate bill because the broader House legislation would make health insurance less affordable. Bush also opposes the House bill's funding provisions. But he did not threaten to veto the measure.

House bill divisive

Although mental health advocates want the strongest bill possible, they worry that the House bill's provisions might lead to contentious negotiations and stall mental parity in a year that so far has seen historic momentum on the issue.

This is the first time either the House or the Senate has passed comprehensive mental parity bills as free-standing legislation, said Nicholas Meyers, director of government relations for the American Psychiatric Assn., which supports both measures.

David Shern, PhD, president and CEO of Mental Health America, said any reservations about the House bill among mental health advocates are rooted in the fear that House-Senate negotiations will bog down legislation and prevent it from reaching the president's desk. "I don't think there's a person in the community that would not take either one of the two bills, given how hard we've been working on it. ... It's really a question of tactics and strategy."

Meyers said he hopes that the impending retirements of two key mental health advocates -- Rep. Jim Ramstad (R, Minn.), and Sen. Pete Domenici (R, N.M.) -- would create sympathy among lawmakers and encourage them to pass mental parity legislation of some kind this year.

Dr. Shern said the Congressional Budget Office, in estimating the House bill's cost, didn't factor in the emergency care and other spending the legislation would prevent by expanding access to early care for mental illnesses. "If this bill increases access to those services -- which it should -- ultimately, in some sense this will be a cost saver," he said.

The CBO estimated that the House bill would cost the government $4.3 billion in lost taxes. The measure would increase health insurance premiums, which would boost the salary amounts deducted for premiums, the CBO said. This would lower the salary amounts subject to payroll taxes.

Karin Hope, Ramstad's legislative director, said it's hard to tell what will happen with parity legislation this year. "The way things work around here, things could happen very quickly or very slowly, depending on the willingness of people and sense of urgency."

Discuss on Sermo Back to top.

ADDITIONAL INFORMATION:

How to pay for parity

The House mental health parity legislation includes two provisions to cover its estimated $4.3 billion cost. It also includes language to prevent genetic discrimination. The measure would:

Save an estimated $2.4 billion in federal health spending by prohibiting physicians from referring patients to hospitals in which the physician has an ownership stake. But it provides a pathway for existing physician-owned hospitals to be grandfathered into law.
Raise $1.9 billion by increasing the minimum manufacturer's rebate for brand-name drugs from 15.1% to 20.1% in Medicaid. The rebate for generic drugs would remain at 11%.
Ban health insurers from using genetic information to set premiums or determine health plan eligibility. The House passed these provisions in April 2007 when it approved the Genetic Information Nondiscrimination Act, but the Senate has not acted on the measure. The House bill also would bar employers from using genetic information in hiring, firing, job placement or promotion decisions.