It may be difficult to identify Parity Act
violations because providers and consumers of MH/SUD services often
have no way of knowing the kinds of restrictions that a health plan
imposes on M/S services and do not have plan data needed to
determine whether a financial requirement or a treatment
limitation is permitted. The following “red flags” are specific
examples of common restrictions that raise a possible parity violation
and warrant further investigation.
Separate deductibles for MH/SUD and M/S services.
The parity regulations prohibit plans from using a deductible for
MH/SUD services that accumulates separately from any deductible
for M/S services. Even if the level of the two deductibles is
identical, they do not comply with the Parity Act if they accumulate
separately. In other words, expenses for MH/SUD and M/S services must
accumulate together to satisfy a single “combined deductible.” 26 CFR
54.9812-1(c)(3)(v)9A); 29 CFR 2590.712(c)(3)(v)(A); 45 CFR
Limits on the number of visits or days of MH/SUD treatment.
Some plans apply visit or day limits to MH/SUD services, and those
limits are often not applied to M/S services generally. Even if some
specific M/S services, like physical or occupational therapy, are
subject to these visit limitations, that is not enough to justify
limitations on MH/SUD care. 26 CFR s 54.9812-1(c)(2)(i) and (3); 29 CFR
2590.712(c)(2)(i) and (3); 45 CFR 146.136(c)(2)(i) and (3).
High copayments or coinsurance requirements for MH/SUD treatment.
If a copayment (what you must pay at the time of service) or
coinsurance requirement (the percentage that you must pay after the
deductible is met) seems unusually high, it may be more restrictive than
the requirements applied to M/S services. If the copayment for MH/SUD
outpatient visits is the same as the copayment for a M/S “specialist”
and higher than the copayment for a primary care physician, the plan
must demonstrate that the “specialist” copayment is the predominant
value for outpatient visits. 26 CFR 54.9812-1(c)(3)(i)(B).; 29 CFR
2590.712(c)(3)(i)(B); 45 CFR 146.136(c)(3)(i)(B).
Financial requirements for MH/SUD prescription drugs that seem more restrictive than those for M/S prescription drugs.
Plans are permitted to impose different financial requirements on
different tiers of prescription drug benefits and still be
parity-compliant. But any differences in tier coverage must be
based on “reasonable factors” (such as cost, efficiency, and
generic versus brand name), not on whether the drugs are generally
prescribed for MH/SUD or M/S conditions. 26 CFR 54.9812-1(c)(3)(iii).;
29 CFR 2590.712(c)(3)(iii); 45 CFR 146.136(c)(3)(iii).
Exclusions that seem to apply only to MH/SUD services.
For example, some plans exclude coverage for court-ordered treatment,
treatment related to illegal activity or legal charges, or addiction
services that are not “voluntary.” Because the kinds of treatment
affected are almost exclusively MH/SUD services, plans applying these
exclusions are very likely in violation of the Parity Act. 78 FR 68240,
68246 Sec. II C.3.-Preamble.
“Fail-first” or “step therapy” requirements for MH/SUD treatment.
Sometimes, before agreeing to cover a certain level of care or
medication, plans will require patients to fail first at less intensive
levels of care or less expensive medications. If plans apply these
requirements, they must be comparable to and applied no more stringently
than those applied to M/S benefits in order to comply with the Parity
Act. 26 CFR 54.9812-1(c)(4)(i) and (ii); 29 CFR 2590.712(c)(4)(i) and
(ii); 45 CFR 146.136(c)(4)(i) and (ii).
standards for MH/SUD services (e.g., precertification,
concurrent review, treatment plan requirements) that seem
. Plans often apply some authorization
standards for all kinds of services. But if they require providers to
obtain authorization for MH/SUD services at earlier stages of treatment
or with greater frequency (for example, every 5 outpatient visits), or
they apply their authorization standards more restrictively to such
services, then they are likely in violation. 26 CFR 54.9812-1(c)(4)(i)
and (iii) Example 1-3; 29 CFR 2590.712(c)(4)(i) and (iii) Example 1-3;
45 CFR 146.136(c)(4)(i) and (iii) Example 1-3 and 11.
Limitations or exclusions of intermediate levels of care for MH/SUD Benefits (e.g. residential treatment). The
scope of services for MH/SUD benefits must be comparable to the scope
of services for M/S. If a plan covers intermediate levels of
care for M/S, such as skilled nursing facilities or
rehabilitation hospitals, it may not exclude comparable services for
MH/SUD care, such as residential treatment. The plan must also cover the
intermediate levels of care for MH/SUD in compliance with the QTL and
NQTL requirements of the Parity Act (e.g., no more restrictive
limitations on the length of stay for MH/SUD benefits than M/S benefits
or more stringent authorization standards). 78 Fed. Reg. 68240, 68246
Sec. II. D- Preamble; 26 CFR 54.9812-1(c)(4)(ii)(H) and (iii) Example 9;
29 CFR 2590.712(c)(4)(ii)(H) and (iii) Example 9; 45 CFR
146.136(c)(4)(ii)(H) and (iii) Example 9.
Limitations on location for accessing MH/SUD Benefits.
If a plan limits the geographic location (e.g. must access the
benefit from an in-state provider), or the type of facility in which
a MH/SUD benefit can be accessed, but does not impose similar
restrictions on M/S benefits, a Parity Act violation may exist. For
example, a plan cannot deny an enrollee coverage for MH/SUD treatment
received out-of-state if it covers M/S benefits in the same
classification out-of-state. 26 CFR 54.9812-1(c)(4)(i) and (ii)(H); 29
CFR 2590.712(c)(4)(i) and (ii)(H); 45 CFR 146.136(c)(4)(i) and (ii)(H).
The reason for denial and the medical necessity criteria:
time that a plan denies a claim for payment or reimbursement for MH/SUD
service, or the insurer substitutes a lower level of care than the one
requested, you should contact the patient’s health plan and request this
information (if it has not already been provided).
The Parity Act
requires insurers to make these disclosures to any plan participant,
“contract provider” or beneficiary upon request
. You should
request not only the medical necessity criteria for MH/SUD benefits, but
also the criteria for comparable M/S benefits, so that the standards
can be compared.
Obtain Description of the Patient’s Benefits:
determine if the parity law has been violated, you must compare the
standards for MH/SUD with those for M/S benefits within the same
classification. You will need a description of both the MH/SUD
and M/S benefits under the plan. Persons enrolled in a plan
should receive the benefit description and may request this from the
plan administrator. 28 26 CFR 54.9812-1(d)(1); 29 CFR 2590.712(d)(1); 45 CFR 146.136(d)(1)
a Comparison. Compare the M/S benefits that are in the same
classification as the MH/SUD benefit you are examining. For example,
if you are concerned that the plan imposes a higher co-payment for
MH/SUD in-network, outpatient benefits than it imposes on M/S benefits,
compare the MH/SUD outpatient financial requirements with those
placed on M/S in-network, outpatient benefits.
you think that there may be a potential violation of the Parity Act,
you should initiate the insurer’s internal grievance process. If your
requests for the reason for denial or medical necessity criteria are not
promptly satisfied, or if you have questions about your rights and
protections under the Parity Act, you can contact the Colorado Division
of Insurance or file a complaint through their website at