Health Plan Utilization Review Challenges to Achieve and Maintain Parity Compliance

The Mental Health Parity and Addiction Equity Act (MHPAEA), together with its broader application through the Affordable Care Act, mandates that the “financial requirements and treatment limitations that apply to MH/SUD benefits cannot be more restrictive than the predominant requirements and limitations that apply substantially to all of the medical/surgical benefits”. Utilization review (UR) / utilization management policies, processes, and practices are among the most critical areas of health plan operations that must be addressed to achieve Parity compliance. A comprehensive review should be conducted which includes both quantitative and non-quantitative treatment limitations, across the full range of covered benefits as well as all levels of the UR process (pre-authorization, denials, and appeals).

Quantitative treatment limitations: These include limitations described in policy on behavioral health (BH) benefits and how to apply them as compared with medical/surgical benefits (based on written documents such as benefit plan design, UR plan, or descriptions of covered and noncovered services). Key UR components for which BH limits cannot be more restrictive than those for medical / surgical services include:
  • Medical necessity criteria: The use of internally developed, proprietary criteria by health plans and /or the behavioral health organizations they often engage as vendors has been common for MH /SUD, while national or industry standard criteria are typical for medical / surgical services. Internally developed criteria (if used) may lack the level of research support or normative basis that has been used to develop and refine standard national criteria sets (such as Milliman and InterQual) that are used on the medical side. Health plans are, therefore, well advised to consider adopting established national criteria sets that apply to BH unless they can assure that an equivalent comprehensive process was used in researching and standardizing their criteria.
  • Prior authorization (PA) policies and procedures: PA requirements placed on BH services cannot exceed those placed on medical services. Common problems observed include requiring PA for most or all outpatient BH services while not requiring PA for analogous medical services; limiting the number of visits that may be approved per review to fewer than are allowed for a similar level of medical services; placing greater restrictions on the number of inpatient days that can be approved per review for BH; and imposing Pharmacy PA requirements that apply to psychotropic but not medical drugs.
  • Step therapy or “fail first” requirements: Non-coverage of services until other services are attempted (“fail first”) is a red flag, especially for substance abuse. An example would be denying inpatient detox admission until ambulatory detox is first attempted. This outpatient alternative may not be readily available in the member’s geographic area or the member may lack sufficient family / community support to succeed. Such policies or practices should be avoided, as similar practices are not typical for medical services and will also violate specific regulations in some states (e.g., New York).
Non-quantitative treatment limitations: These include limitations on how BH benefits are actually applied by the health plan in comparison to medical/surgical benefits, regardless of what may be stated in policy. Common UR problems observed include the following:
  • Differences in how UR process is conducted: Review, denial, and appeal metrics will help determine if inequities exist in how UR is conducted for BH vs. medical services. Examples include rate of referring cases to physician advisors as a percentage of total reviews, denial rate as a percentage of total reviews (for different levels and types of review), appeal rate (as a percentage of total denials), rate of denials overturned on appeal (as a percentage of total appealed cases), and rate of denials upheld on appeal. Average turnaround time to complete the review process at different levels (e.g., initial review, denial, and appeal) can help to uncover differences in the timeliness of completing and communicating results of reviews. Slower or more tedious processing of BH reviews can occur due to a variety of factors, such demands for more extensive information by reviewers to complete authorizations; more frequent physician advisor or peer review referrals; communication issues between the health plan and BH outsource vendor (if used), between the plan and pharmacy vendor, or between pharmacy vendors if a specialist vendor is used for BH. Average number of outpatient visits or inpatient days approved per review can also help reveal differences in how stringently the review process is being applied for BH vs. medical services.
  • Rationale, communication, and follow up of denials: In addition to “fail first” requirements, another common problem is lack of adequate communication of alternative services when denials are issued. Denial decisions (e.g., inpatient admission) must specify what safe alternatives are available to the member (e.g., residential treatment, partial hospitalization, or outpatient) that would meet medical necessity criteria, with referral assistance readily available for those services. Additionally,communication of decisions and rationale must be clear and transparent to the member and provider. This is more challenging for BH services than medical, which tend to have clearer and more specific clinical decision-making algorithms.
  • Inconsistent application of medical necessity criteria: It is often more difficult to attain consistency across reviewers in how BH criteria are applied than medical, since medical UR decision-making tends to be based on more specific, clear cut algorithms. Lack of coordination between in-house plan staff and BH vendor staff can also contribute to inconsistency. Thorough staff training and monitoring of inter-rater reliability can help to address these issues, as well as provide a metric to compare consistency of application of criteria by BH staff to that of medical. Regular problem-solving sessions with vendors (including discussion of specific cases) can also address coordination issues.
Utilization review is a key component of parity compliance. Policies, as well as actual practices, that are more restrictive for BH than medical services must be identified and corrected. Tracking of key UR metrics, staff training and monitoring of consistency, coordination and problem-solving with outsource vendors, and attention to communication issues are critical to this effort.