OIG: States fall short on Medicaid mental health parity

Eight states reviewed by HHS' Office of Inspector General fell short on mental health parity in Medicaid. 

An audit published March 28 examined eight states' compliance with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which prohibits states from implementing more restrictive coverage standards for mental health or substance use care in Medicaid than for medical and surgical services. 

All states reviewed by CMS — Arizona, New Jersey, New York, Texas, Illinois, Kansas, Mississippi and South Carolina — did not add parity requirements to their contracts with Medicaid managed care organizations by 2017, the date required by the law. All states now include these provisions in their contracts, according to the OIG's report. 

Five states did not conduct mental health parity analyses of their Medicaid programs by the date required by law, and all eight states failed to make the results of these analyses publically available by the date required by the law. 

Mississippi and South Carolina had more restrictive cost sharing policies for mental health and substance use services than medical services, the review found. Six states — Arizona, Mississippi, Kansas, New York, South Carolina and Texas — imposed stricter qualitative limits on mental health services. These limits included capping the number of counseling sessions for smoking cessation services or limiting hours for inpatient hospitalizations for mental health. By April 2020, Kansas, New York, Mississippi and Texas had corrected these issues. 

All eight states reviewed had more stringent non-qualitative limits, such as prior authorization requirements, for mental health services than medical services, the report found. 

The OIG recommended CMS improve its oversight of state compliance with mental health parity rules. The agency agreed with the OIG's recommendations, according to the report. CMS said it will verify states have conducted mental health parity analyses in Medicaid, and follow-up with states that have reported noncompliance with parity standards. 

Read the full report here. 

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