7

Examining Two Categories of Care in Section 1302

Section 1302 of the Patient Protection and Affordable Care Act (ACA) outlines 10 broad categories of care that, by 2014, must be included as essential health benefits (EHB) in any qualified health plan (QHP). Although time constraints prohibited the committee from hearing testimony related to each of these categories in detail,1 two specific categories, about which many questions had been raised, were investigated: mental health and substance use disorder services, including behavioral health; and rehabilitative and habilitative services and devices. Dr. Kenneth Wells and Dr. Kavita Patel from University of California, Los Angeles (UCLA) and Mr. Paul Samuels from the Legal Action Center (LAC) and the Coalition for Whole Health emphasized the need for:

  • Reasonable access to a range of evidence-based mental health and substance use disorder services, as called for under federal parity provisions;
  • Treatment that recognizes the chronic, not just acute, dimensions of these illnesses; and
  • Collaboration and integration of services across the mental health, substance disorder, and physical health sectors.

Mr. Peter Thomas from the Consortium of Citizens with Disabilities (CCD), Dr. Gary Ulicny from the American Congress for Rehabilitative Medicine (ACRM), and Ms. Marty Ford of The Arc and the United Cerebral Palsy (UCP) Disability Policy Collaboration focused on the need to develop criteria for the EHB package that ensures people with disabilities and chronic conditions can access rehabilitative and habilitative services and devices that help them improve, maintain, and limit deterioration of function. The committee’s work, these latter panelists argued, will determine whether plans in the exchanges meet the needs of people confronted with illness, injury, disability, or other health condition by enabling them to become more healthy, functional, and independent.

PRESENTATION BY DR. KENNETH WELLS, DAVID GEFFEN SCHOOL OF MEDICINE, UCLA

Dr. Wells began by emphasizing that the delivery of behavioral health services in the United States is “extremely problematic.” Stigma, he said, prevents people from seeking needed care. Additionally, the “private

____________________

1 See Chapter 9 for brief presentations related to other categories. Additional written testimony related to each category has been received from other parties through the IOM committee’s online public comment form and other means.



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7 Examining Two Categories of Care in Section 1302 Section 1302 of the Patient Protection and Affordable Care Act (ACA) outlines 10 broad categories of care that, by 2014, must be included as essential health benefits (EHB) in any qualified health plan (QHP). Although time constraints prohibited the committee from hearing testimony related to each of these categories in detail, 1 two specific categories, about which many questions had been raised, were investigated: mental health and substance use disorder services, including behavioral health; and rehabilitative and habilitative services and devices. Dr. Kenneth Wells and Dr. Kavita Patel from University of California, Los Angeles (UCLA) and Mr. Paul Samuels from the Legal Action Center (LAC) and the Coalition for Whole Health emphasized the need for: • Reasonable access to a range of evidence-based mental health and substance use disorder services, as called for under federal parity provisions; • Treatment that recognizes the chronic, not just acute, dimensions of these illnesses; and • Collaboration and integration of services across the mental health, substance disorder, and physical health sectors. Mr. Peter Thomas from the Consortium of Citizens with Disabilities (CCD), Dr. Gary Ulicny from the Ameri - can Congress for Rehabilitative Medicine (ACRM), and Ms. Marty Ford of The Arc and the United Cerebral Palsy (UCP) Disability Policy Collaboration focused on the need to develop criteria for the EHB package that ensures people with disabilities and chronic conditions can access rehabilitative and habilitative services and devices that help them improve, maintain, and limit deterioration of function. The committee’s work, these latter panelists argued, will determine whether plans in the exchanges meet the needs of people confronted with illness, injury, disability, or other health condition by enabling them to become more healthy, functional, and independent. PRESENTATION BY DR. KENNETH WELLS, DAVID GEFFEN SCHOOL OF MEDICINE, UCLA Dr. Wells began by emphasizing that the delivery of behavioral health services in the United States is “extremely problematic.” Stigma, he said, prevents people from seeking needed care. Additionally, the “private 1See Chapter 9 for brief presentations related to other categories. Additional written testimony related to each category has been received from other parties through the IOM committee’s online public comment form and other means. 71

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72 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS sector does not have the infrastructure to care for more severe mental disorders” because “most people with severe and persistent illness are primarily in the public sector.” These problems are compounded by poor information systems, a lack of clinical decision support and data analysis, and a lack of availability in the market of many established, evidence-based treatments. Individuals with schizophrenia, for example, benefit from evidence-based family psycho-education in addition to medication (UNC School of Medicine, 2011). Yet, Dr. Wells said, many people with schizophrenia in outpatient specialty mental health settings do not get adequate family psychosocial management in practice; most of this family management is informal rather than following evidence-based prac - tices (Dixon et al., 2001; Young et al., 1998), and few families are referred to evidence-based family psychosocial treatment even when it is available (Cohen et al., 2010). Science should inform the provision of services and help define future research questions, he said. However, there is a lack of adoption of evidence-based psychosocial treatments for many behavioral health disorders, espe - cially in primary care, which tends to focus on medication management strategies. Furthermore, demonstrated competence in delivering a wide range of evidence-based psychosocial treatments is not necessarily a requirement of professional training programs. With more limited insurance reimbursement for behavioral health services, incentives have been poor for improving the market for delivering such services. With the passage of parity legisla - tion and requirements to cover behavioral health services in the EHB package under insurance exchanges, Dr. Wells suggested that it was “time for a wide range of evidence-based treatments and system-based quality improvement interventions, to be viewed as essential benefits.” In addition, he suggested that in areas where evidence is limited but the need for services is great due to the severity of illness, benefits should include services that meet reason - able community practice standards. Many persons with behavioral health needs can have difficulty obtaining care and finding providers in a timely manner even when they have private insurance (Wang et al., 2005). Furthermore, behavioral health conditions have their roots in both biological and social factors, and this requires a range of biological and psychosocial treatments. Current mental health and substance abuse providers for safety-net populations will likely be the only available, initial source of care even as low-income populations transition to the private insurance market or into the expanded Medicaid program. These providers have expertise in managing this population. In addition to covering such providers to have adequate capacity for expanded services, the covered services should include the necessary range of services (including psychosocial services outside of the traditional medical model) to improve outcomes, especially for severely ill populations. Otherwise, Dr. Wells argued, “we will continue to have people who are vulnerable, do not necessarily understand the conditions they have, and will not receive the best evidence- based care.” It is key, he said, that the full set of providers and service settings be eligible for reimbursement, thus requiring a broadening of insurer views of eligible providers and services, which in turn should lead to an improved market environment for the availability of evidence-based services. Additionally, Dr. Wells suggested that individuals should be able to access care “for all of their illnesses.” This is especially important, he said, for people with behavioral health conditions because they have a higher prevalence of physical health conditions (De Hert, 2011; Goodell et al., 2011). Largely because of co-morbid medi- cal conditions, people with schizophrenia have a life expectancy 20 years less than those without schizophrenia (Goodell et al., 2011; Wildgust et al., 2010), while people with bipolar illness have a 15-year shorter life expectancy (Roshanaei-Moghaddam and Katon, 2009), and people with depression also have reduced life expectancy (Schulz et al., 2000). Cost effectiveness for mental health and substance use services “has to be thought of differently,” Dr. Wells explained, to include the effects of treatments on reducing societal costs of illness, including premature mortality and morbidity (Schoenbaum et al., 2001; Wells et al., 2000). Behavioral health conditions are prevalent across the lifespan, have a relatively early age of onset, and tend to have long-term health and social consequences, including across generations in the same family (IOM, 2009). These factors increase the importance of assuring that affected individuals and families have access to the range of services needed to improve outcomes early in the course of illness and over time.

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73 EXAMINING TWO CATEGORIES OF CARE IN SECTION 1302 The Mental Health Parity Act and the Affordable Care Act The Wellstone Domenici Mental Health Parity and Addiction Equity Act2 “fundamentally changed the land- scape” of many health insurance markets by requiring mental health and addiction services, when offered, to be under equivalent terms of coverage to those services covered for medical conditions. The focus on coverage parity was further extended by the ACA. Because of the Parity Act, typical private insurance is currently in a state of flux regarding the coverage of mental health and substance use care to conform with that law, as well as interim regulations issued by the U.S. Department of Health and Human Services (HHS), which require parity of coverage in terms of both quantitative limits such as co-payments or co-insurance rates, and non-quantitative limits such as preauthorization and benefit management strategies. The current market, Dr. Wells said, “is already changing and will be changing rapidly over the next three years,” so HHS will need to look beyond the historical data on benefit policies in typical employer plans to find a benchmark benefit plan. Dr. Wells pointed out that outpatient medical expenditures for mental health as a percentage of gross domestic product (GDP) have not increased over the last 10 years (Frank and Glied, 2006; Glied and Frank, 2009) because mental health care has been so extensively managed. “People are not rushing in to get this kind of care,” he said, “because if you have to get pre-authorized every four visits, how many of those pre-authorizations will be approved for evidence-based psychotherapy for depression?” Instead, the market has “tilted away from psychosocial treat- ments to medication-based treatments.” Dr. Wells concluded by expressing that the design of the EHB package “is an opportunity to truly shift the paradigm of mental health care.” “We have an opportunity,” he said, to define services as essential, rather than only providing a “minimum” set of services, which has been the case in mental health care. Additionally, Dr. Wells urged the committee to think of the long-term and social costs of untreated mental health problems, which society tends not to think about until there is a tragedy. PRESENTATION BY DR. KAVITA PATEL, UCLA SEMEL INSTITUTE Dr. Patel used her experience working on health insurance policy for Senator Ted Kennedy and the Obama administration, as well as her knowledge of the Massachusetts reform efforts as an avenue for explaining the unique nature of mental health and substance use benefits. Her view of Congress’ intent in crafting Section 1302 of the ACA was that there was no desire to incorporate the expansiveness of benefits provided in the Medicaid program into the EHB, especially given the heterogeneity across Medicaid programs with respect to behavioral health services. But, she advised the committee to look to Massachusetts’ experience with implementation to determine who is likely to enroll (see related general comments on legislative intent and the Massachusetts experience in Chapters 2 and 4). Lessons from Massachusetts Most insurers, particularly commercial insurers, will need to consider the unique needs of the populations who will purchase insurance through the exchanges. Massachusetts’ experience in covering mental health is that these newly insured people tend to be low-income and racially and ethnically diverse (MA Health Connector, 2009). This population necessitates an infrastructure of community-based behavioral health services. Committee member Mr. Koller supported the importance of examining the Massachusetts experience to “see who the bulk of new enrollees will be in the exchange come 2014,” as these will be the first groups subject to the EHB package and many will likely have characteristics similar to the Medicaid population. Dr. Patel concurred, saying that a recent study showed that for outpatient utilization, the newly covered “behaved a lot more like Medicaid TANF [Temporary Assistance for Needy Families] adults” than like the commercially insured, with a resulting increase in emergency room use specifically because of mental health disorders. 2Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. Public Law 110-343, 110th Cong., 2d sess. (October 3, 2008).

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74 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS The Need for Comprehensive Benefits The full scope of services necessary to achieve and sustain recovery and prevent behavioral health conditions should be considered essential, Dr. Patel argued. In particular, she said, the committee should ensure that the EHB package devote its attention to case or care management, patient education and activation, and coordination of services for patients who are vulnerable due to illness or social factors. Community-based services, which take place in churches, barber shops, or in lay worker settings, she said, have been shown to be effective in treating mental health, behavioral health, and substance use disorders. Traditionally, she said, these services would not be covered because they would be considered outside the scope and setting of benefits. Scope, setting, and the range of providers are “critically important” principles that HHS should consider. Dr. Patel used an example of lay community and social case workers to support screening, education, and coping skills for individuals with behavioral health problems in Los Angeles as part of the National Institute of Mental Health’s Community Partners in Care study (Chung et al., 2010) and in post-Katrina New Orleans as part of the Mental Health Infrastructure and Training Project (Wennerstrom et al., in press). While lay community workers and case managers have a “long history” of working with patients with various chronic conditions, under the Parity Act, it is possible that they “may be eliminated from being part of the team that provides care.” Lay community workers and case managers may be excluded for two reasons: 1. Under the Interim Final Rule and the Parity Act itself, six classifications of benefits are specified: inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs (U.S. Department of the Treasury et al., 2010). These categories do not necessarily lend themselves to community-based care. 2. Medical necessity determination: parity regulations allow for coverage based on “medical necessity” if care is provided by a licensed health care professional within his/her scope of practice. She urged the committee to include communities, clients, providers, and patients in the process of determining adequacy and effectiveness of mental health services in a QHP, consistent with the patient-centered spirit of the ACA. Dr. Patel urged the committee to use benchmarks from the private sector and commercial plans, as feasible, to understand the challenges in designing behavioral health benefits. However, such benchmark programs need to be compatible with the principles and regulations that apply under parity and reform legislation, such as parity of coverage and, for the exchanges, mandated inclusion of substance abuse and mental health services. Further, the benefit designs in such plans may need to be rethought to determine how to provide reimbursement support for a broader range of disorders and services together with incentives to promote quality and efficiency. Plans operat - ing under the parity mandate, such as the Federal Employees Health Benefits Program (FEHBP), may provide examples of covered services and quantitative benefits. Based on plans currently available, though, it will be harder to identify examples of benchmarks under parity for nonquantitative benefits. Committee member Dr. Linda Randolph indicated that most of the discussion by Drs. Wells and Patel had focused on treatment, and asked for comment on whether plans could or should cover preventive interventions since such interventions are not traditionally provided in medical settings. Dr. Patel acknowledged that “this is where it gets more complicated, because the evidence base is not there,” and asked the committee to build flexibility into the process for updating the EHB package so that preventive care can be addressed as evidence develops. Dr. Wells noted that screenings for depression in primary care settings and in school-based clinics provide one potential avenue for consideration. “No one would argue,” he said, “with the fact that there is strong evidence for teen suicide prevention strategies through schools” (Eggert et al., 2002). In addition, he said, there are a range of early intervention programs for reducing depressive disorder in high-risk teens (Clarke et al., 2005) and a range of evidence-based substance use prevention interventions, including school programs such as Project ALERT 3 (Ellickson and Bell, 1990). 3 Project ALERT is a school-based program which focuses on resisting substance abuse in 7th and 8th graders, most specifically tobacco, alcohol, marijuana, and inhalants (Project ALERT, 2011).

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75 EXAMINING TWO CATEGORIES OF CARE IN SECTION 1302 PRESENTATION BY MR. PAUL SAMUELS, LEGAL ACTION CENTER (LAC) AND THE COALITION FOR WHOLE HEALTH Mr. Samuels, the Director of the LAC and co-chair of the Coalition for Whole Health, echoed the previous panelists in saying that the history of stigma and discrimination in mental health and substance use disorders, and the history of inadequate coverage of mental health and substance use benefits, could be partially mitigated by ensuring these services are comprehensively covered in the EHB package. He urged HHS to ensure equality in coverage for mental health and substance use disorder benefits, and to consider a change in how illnesses are characterized. “One of those problems through the years,” he said, “has been a focus on these illnesses as acute, rather than chronic, and addressing them only at the beginning and not as they move forward.” Large treatment gaps exist for mental health and substance use disorders, a problem Mr. Samuels credited to “an over-reliance on public funding for care” (Scanlon, 2002). Less than half of the 15 million adults with serious mental illness receive any care, and less than 20 percent of the more than 22 million Americans with substance use disorders receive any care (SAMHSA, 2010b). These untreated illnesses and disorders create co-morbidity prob - lems: 25 percent of hospital admissions are directly related to untreated mental illness and substance use disorders (AHRQ, 2007). Addressing these unmet needs, Mr. Samuels said, “will save lives and huge amounts of money.” In response to a question from committee member Dr. Sabin, Mr. Samuels pointed out that the failure of insurers to adequately cover these services has “cost a lot of money” because when people do not get treatment, they develop “other kinds of problems” (e.g., heart disease or liver failure) when the underlying condition is not addressed. Furthermore, when these services are not covered by private insurance, “the public dollar is being disproportionately tapped into.” Fifty-eight percent of all funding for mental health treatment and 77 percent of all funding for substance use disorder treatment is from the public sector (Levit et al., 2008; Mark et al., 2007). Mental Health and Substance Use Disorder Parity The ACA requires mental health and substance use disorder benefits to be included as EHB, thus extending the Parity Act2 to QHPs and new Medicaid eligibles under benchmark and benchmark-equivalent plans. Parity prohibits quantitative limitations that are “more limited than for other types of medical/surgical benefits” (e.g., mental health and substance use disorder services cannot have higher deductibles and co-payments than medical benefits), and it prohibits non-quantitative limitations that are “more severe and more strictly limiting than for medical/surgical” (e.g., medical management techniques cannot be more restrictive for mental health and substance use disorders than they are for medical benefits).4 Mr. Koller noted that if the Parity Act was completely successful, the list of 10 categories of care included in the ACA would not need to include a separate line for mental and behavioral health as these services would be included in inpatient and outpatient services. “Yes,” responded Mr. Samuels, the goal of parity is to eliminate the disparity that is present between physical illnesses and illnesses of the brain and reach the point where people get what they need no matter which kind of illness it is. Mental health and substance use disorders have long been recognized by health care and scientific experts as preventable and treatable, but law and insurance policy have not granted these disorders the same recognition. “The history of discrimination in coverage of mental health and substance use disorder benefits needs to be remedied,” Mr. Samuels said. He expressed his agreement with points made by Drs. Wells and Patel: individuals need to be able to access the type, level, amount, and duration of care they need, including care for relapses. Thus, medical necessity criteria should reflect the chronicity of mental illness and substance abuse disorders. Criteria and Methods Mr. Samuels urged the committee to focus on the quality of mental health and substance use care when determining the criteria and methods for defining and updating the EHB package. Work by the Institute of Medi - cine (IOM) (2005), the National Quality Forum (NQF) (2007), and the Surgeon General (HHS, 1999), he said, 4 U.S.C. 300gg-5(a)(3)(A)(ii); Interim Final Rule under Wellstone Domenici: 45 CFR Part 146.

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76 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS confirms that there is a great wealth of evidence-based practices on which the committee can draw. Furthermore, he said, HHS should consider ways to create incentives to utilize evidence-based or consensus-based practices (e.g., utilizing the full continuum of care, matching patients to the appropriate services, and using medications when they are appropriate). Mental Health and Substance Use Disorder Benefits Broad and robust benefits for mental health and substance use disorders would provide access to prevention, wellness, chronic disease management, habilitation, rehabilitation, and recovery at the clinically appropriate level, type, and amount of care; thus, participating plans, Mr. Samuels said, should be required to provide a robust set of benefits in each category of care outlined in the ACA. Additionally, benefit packages should not arbitrarily exclude certain types of services (e.g., excluding residential or non-hospital inpatient services, not covering appropriate medications). Mr. Samuels advocated for an EHB package that includes services, interventions, and strategies to prevent, intervene early, and treat people with these illnesses by helping them achieve and maintain long-term wellness. Research shows that delaying the age of initiation of alcohol and other drug use, for example, will delay and often prevent alcohol and drug addiction in the future (SAMHSA, 2010c). There should also be, Mr. Samuels noted, ongoing support to help people manage their disease over the course of their life, services for children and families, and services that are culturally appropriate. A robust EHB package would: • Include a full range of services provided at parity with other medical/surgical benefits; • Manage benefits using good clinical judgment; • Ensure decisions about the type and amount of care are driven by the treating professional, not payers or other third parties; • Provide care to individuals and family members over their lifetime; • Use process measures, such as those developed by the NQF, and outcome measures to ensure care focuses on the patient’s quality of life and ability to function; • Consider the individual treatment needs of the patient and the availability of evidence-based practices as part of medical necessity determinations; • Change the practice of unfair and inappropriate denials of care; and • Clearly define and make available to patients and providers the medical necessity criteria and reasons for denial. In addition to these services, Mr. Samuels noted, individuals suffering from mental health and substance use disorders need access to rehabilitative and habilitative services as many of these individuals lack skills, housing, education, and social supports. Mr. Samuels advised the committee to look at the Substance Abuse and Mental Health Services Administration (SAMHSA) publication titled Description of a Good and Modern Addictions and Mental Health Service System (SAMHSA, 2010a). SAMHSA is currently working with stakeholders and researchers to identify the best services, interventions, and strategies to prevent disease and help individuals with illness achieve and maintain long-term wellness. Other issues facing these fields include workforce development, licensing and credentialing issues, and the delivery of physical and mental health services in a more integrated way. As the committee develops a process and criteria for defining and updating the EHB package, Mr. Samuels suggested establishing regular working groups of mental health and substance use disorder service providers, consumers, and state directors of mental health, substance use disorder programs, and Medicaid programs. The feedback of these individuals will help ensure the criteria facilitate innovation and account for promising practices that may not yet have a research base. To “redress the history of discrimination in managing benefits,” HHS, he said, should make sure that people not only have coverage for these services, but also access.

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77 EXAMINING TWO CATEGORIES OF CARE IN SECTION 1302 Question & Answer Session Mr. Koller asked the panelists to what extent parity is about benefit definition and to what extent it is about benefit administration. In addition to coverage decisions, Mr. Koller said, the standards for network development must also be in place. Dr. Patel concurred, noting that benefit administration is “an art.” While a lot of benefit issues are related to administration, not definition, the committee can have an impact, she said, by defining the elements of the benefit design and explicitly noting that the administration of the design is an important consideration, especially for behavioral health, which has traditionally been subject to numerous carve-outs. Mr. Samuels stated that in the absence of good benefit administration, individuals with mental health and substance use disorders, including people who are homeless, unemployed, and in the criminal justice system “could easily fall through the cracks.” We know that a disproportionate share of people who are uninsured have mental illness and substance use disorders (Wu and Ringwalt, 2005), and this has remained the case even after health reform in Massachusetts, Maine, and Vermont (NASADAD, 2010). Dr. Wells added that defining EHB for this population provides the opportunity to also improve some of the “market problems” that have limited access to evidence-based treatment (e.g., for case management and collabora - tive care). A recent study showed that integrated collaborative care for depression and chronic medical conditions (heart disease and diabetes) improved outcomes for both types of conditions (Katon et al., 2010). Although collab - orative care for depression is typically not covered, other 10-year outcome data indicate that vulnerable populations with depression who receive access to collaborative care continue to do better than their counterparts not initially under collaborative care, long after they may stop seeing their provider; this suggests that they have learned how to better manage their own symptoms and illness due to their initial experience with collaborative care (Wells et al., 2008). These findings indicate that given reasonable, initial attention to patient learning, patients do not have to be “micromanaged through the health care system for a decade” in order to have better outcomes. Dr. Wells stated that there is currently “enormous variation in how mental health and substance abuse is handled” by state Medicaid programs. The EHB will help ensure parity by “leveling the playing field” in some of these plans, which “is a huge change, especially for substance abuse.” PRESENTATION BY MR. PETER THOMAS, CONSORTIUM FOR CITIZENS WITH DISABILITIES (CCD) Mr. Thomas began a panel that focused on the need for comprehensive benefits for rehabilitative and habilita - tive services and devices. First, he provided formal definitions of these terms, as well as legislator’s statements on the meaning of these terms5,6: • Rehabilitation therapies are provided from a continuum of accredited programs and treatment settings based on the intensity of service that helps improve, maintain, and prevent deterioration of function (settings include inpatient rehabilitation hospitals, long-term acute care hospitals, skilled nursing facilities [SNFs], long-term residential transitional rehabilitation programs, outpatient therapy, home care, and community-based programs). • Habilitation therapies are services or supports that enable a person with a significant disability to acquire, retain, improve, or prevent deterioration of activities of daily living (ADLs) or instrumental activities of daily living (IADLs) over time.7 5 Congressman Pascrell, a co-chair of the Congressional Brain Injury Task Force, included the following in his House floor statement: “The term rehabilitative and habilitative services includes items and services used to restore functional capacity, minimize limitations on physical and cognitive functions, and maintain or prevent deterioration of functioning as a result of an illness, injury, disorder or other health condition. Such services also include training of individuals with mental and physical disabilities to enhance functional development” (Pascrell, 2010). 6 Congressman George Miller, the Chair of the Committee on Education and Labor, explained that the term rehabilitative and habilita - tive devices “includes durable medical equipment, prosthetics, orthotics, and related supplies.” Miller also stated that “it is my expectation ‘prosthetics, orthotics, and related supplies’ will be defined separately from ‘durable medical equipment.” In addition, Congressman Miller explained, “I also expect that durable medical equipment will not be limited to ‘in-home’ use only” (Miller, 2010). 7 Italics added to aid comparison.

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78 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS Durable medical equipment (DME), prosthetic limbs, orthopedic braces, and other assistive technologies • improve, maintain, and limit deterioration of function in mobility, communication, hearing, and vision. While there is some overlap in definition, habilitation therapies are distinct when they relate to the acquisi - tion of function. Mr. Thomas advised that a sparse EHB package could result in employers eroding their current benefit packages and noted that in the EHB debate, there was recognition that people with disabilities and chronic conditions have greater health care needs. The ACA not only requires coverage of rehabilitation and habilitation services, but also mandates that the EHB package ensure an “appropriate balance,” “non-discrimination,” and non-denial on the basis of a present or predicted disability. He advocated for a transparent process in which the EHB package would be certified on an annual basis by the Secretary of HHS based on recommendations by a federal advisory body. Typical Employer Plans Mr. Thomas explained that most private plans cover rehabilitation services and devices. Both the preferred and standard options of the FEHBP, for instance, cover rehabilitation in a variety of settings at different levels of inten - sity. Furthermore, the plans cover DME and prosthetics and orthotics. While they have “various types” of exclu - sions and limitations, “the vast majority of these benefits are routinely covered by health plans, and certainly by public programs.” Nevertheless, the U.S. Department of Labor’s (DOL’s) attempt, Mr. Thomas said, to accurately quantify the typical employer plan’s coverage of these benefits will be seriously hampered because the DOL lacks the essential authority and resources to collect detailed data on what employer plans cover. Instead, the department depends on voluntarily submitted plan descriptions that vary in length, scope, and transparency. It is unlikely the DOL report (see Chapter 2), Mr. Thomas argued, will provide a complete understanding of rehabilitation and habilitation coverage provided under the typical employer plan. Rather, HHS will need to acquire supplemental information about typical employer plans. PRESENTATION BY DR. GARY ULICNY, THE SHEPHERD CENTER Dr. Gary Ulicny, President of the Shepherd Center, spoke on behalf of the members of the American Congress of Rehabilitation Medicine (ACRM) and cautioned the committee against establishing a rigid or too narrow benefit package for rehabilitation and habilitation because these patients “come with distinct needs running the gamut” from needing to regain function after a fracture to catastrophic brain injuries. Yet arbitrary limits on physical therapy benefits, outpatient therapy, and DME spending are typical of current plans, regardless of diagnosis and individual need (e.g., 30-day inpatient stay, DME cap, outpatient therapy visits) and often “impede the provider from giving the best treatment regimen.” Limits, he said, should not be based on arbitrary monetary caps. Instead, benefit design should be based on medical necessity and coverage limitations should be based on evidence, not the cost concerns of plans. Return on Investment Rigid or narrowly defined benefit packages are often not cost-effective because they are shortsighted, he emphasized. Determination of benefits should focus on the return on investment based on the reduction in long- term disability and dependency. Given some of the ACA’s proposed changes (e.g., the elimination of lifetime caps and the portability of insurance), these long-term costs will become more important to both government and the private insurance market. In today’s health insurance market, Mr. Ulicny said, a patient may be unable to receive a medically necessary service if it is not expressly included in their health insurance policy. Plans should have the flexibility to cover extra-contractual services when they meet the recovery needs of the individual patient and provide substantial return on investment. Furthermore, he suggested that when discussing affordability, in addition to the cost of the service, HHS should consider long-term savings associated with the prevention of secondary conditions and deterioration in function,

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79 EXAMINING TWO CATEGORIES OF CARE IN SECTION 1302 in addition to the cost of the service. For example, he said, a person with a spinal cord injury who is denied cov - erage for an appropriate wheelchair may, in two years time, develop a skin breakdown that requires expensive reconstructive surgery to repair. In this case, the appropriate (and perhaps more expensive) wheelchair would have been a cost-saving investment. The ultimate outcome of rehabilitation is an improvement in the patient’s func - tion. In some instances, traditional definitions of medical necessity do not appropriately weight the importance of functional improvement. Too often, he said, insurers apply medical necessity without considering the long-term functional and health benefits to the patient of a service or device. And in many instances, these decisions lead to much greater disability and long-term dependency costs to the system. Criteria and Processes Current reimbursement models, Dr. Ulicny stressed, do not incentivize good outcomes: “We get paid for doing more, we do not get paid for doing better, and I think that is something that needs to be inherently changed.” The design of the EHB package, he argued, can play a role in incentivizing providers to “do the things that are right and produce meaningful outcomes.” Dr. Ulicny noted that “although we cannot overly rely on randomized clinical trials,” the committee should establish evidence-based criteria for updating the EHB package by recognizing the value in clinical replication (Level II and III evidence) and utilizing expert consensus. In rehabilitation, large teams of providers make it dif - ficult to tease out the effectiveness of each piece of intervention. In sum, he suggested HHS: • Include items and services that assist in regaining and maintaining functional capacity and preventing deterioration, • Include a mechanism for individualizing benefits, • Ensure limitations and exclusions for rehabilitative and habilitation benefits are evidence-based, • Establish a formal advisory committee, including consumers, to advise the HHS Secretary on benefit design and related issues, and • Consider alternative reimbursement strategies that encourage good performance. The committee, he suggested, should “veer away from using Medicare as a benefit design model” for the rehabili - tative and habilitative services covered in the EHB because Medicare is designed primarily for people over age 65 and its benefit design will not adequately take into account the needs of, for example, a 15-year-old who has experienced a catastrophic spinal cord injury. Role of Device Manufacturers When committee member Dr. Santa asked to what degree the benefit design should “try to make the behavior of device companies more functional in terms of pay for performance and outcomes, Dr. Ulicny stated that “the problem with the device industry is that the device is released far before we are able to provide a measurement of its functional improvement capability.” The lack of information about functional improvement, Dr. Ulicny said, is something to address “as we begin to look at what things are most appropriate, whether it is the intensity of the service or the device itself.” In lieu of functional improvement information from device manufacturers, the industry, Dr. Ulicny said, has its own “self-leveling process.” Providers, for example, did not endorse a $22,000 wheelchair because providers thought it unaffordable for most individuals and that the “additional benefit was not worth the cost.” Without provider endorsement, production of this particular device stopped.

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80 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS PRESENTATION BY MS. MARTY FORD, THE ARC AND UNITED CEREBRAL PALSY DISABILITY POLICY COLLABORATION Ms. Ford, who spoke on behalf of the Long Term Services and Supports and Health Task Forces of the CCD, began by stating that Medicaid defines habilitative services as those services designed to assist participants in acquiring, retaining, and improving the self-help, socialization, and adaptive skills necessary to reside successfully in home and community-based settings.8 These therapies, services, and supports, which are needed over the course of a person’s lifetime, enable people with significant disabilities to learn, improve, or prevent deterioration of activi- ties of daily living. Habilitation therapies, she said, include occupational, physical, speech, and behavioral therapies, along with other services and supports. Ms. Ford noted that habilitation services can prevent costly institutionaliza - tion; help people function better in the community; prevent frequent hospitalization and emergency room visits; build social, communication, and personal hygiene skills; and facilitate behavior and medication management. 9 Definitions “One of the issues” in coverage of habilitation services, Ms. Ford stated, is that it is often unclear why a distinction between habilitation and rehabilitation is made. The distinction used to determine coverage is often whether the person is learning something for the first time or whether they are re-learning something following an accident, injury, or medical event. When this distinction is made, she said, a person “learning something for the first time” is often not covered for the service. If a person has severe developmental disabilities, teaching the person the fine motor coordination needed to get dressed is considered habilitation and not typically covered under private insurance, whereas if the person had a stroke, teaching him these skills is considered rehabilitation and would be covered. Ms. Ford further illustrated the distinction with two additional examples: • The services provided by a speech therapist to a 3-year-old child with autism are considered habilitation because the child has never spoken. The services provided by a speech therapist to a 3-year-old to regain speech after a traumatic brain injury are considered rehabilitation. There is no difference, Ms. Ford said, in the child’s need for that service. • A strength-training program for a person with a congenital spine condition is considered habilitation, whereas a strength-training program for a person with a spinal cord injury is considered rehabilitation. Again, she said, there is no difference in the patient’s need for that service. Acquiring, retaining, and improving skills can be both habilitative and rehabilitative, depending specifically on the needs of that individual.10 Legislative Intent Children and adults with disabilities and significant health needs require both habilitative and rehabilitative services and supports. Ms. Ford argued that the discrimination against children and adults who need these services 8 U.S.C. Title 42 § 1915(c)(5)(A). 9 When states propose to provide services under the Home and Community-Based Services Waiver (including habilitation services), CMS reviews the proposed services to ascertain whether the service: contributes to the community functioning of waiver participants and thereby avoids institutionalization; is reasonably related to addressing waiver participant needs that arise as a result of their functional limitations and/or conditions; and/or falls within the scope of Section 1915(c) of the Act and is not at odds with other provisions of the Act (CMS, 2008, p. 127). Note: By definition, for coverage under the waiver, habilitation services must be capable of reducing institutionalization and assisting people to function better. 10 Another speaker pointed out that habilitative services differ from rehabilitative services in that they do not serve to improve the patient to a pre-illness or injury state, and therefore, do not always have a clearly defined endpoint in either time or scope of services. Without some limitations, these services (e.g., for autism) can substantially increase costs and lead to unaffordability and adverse selection in the insurance market, said Ms. Ehnes in her presentation. Additionally, insurers have traditionally set definable and predictable parameters to exclude coverage of non-medical services (see Chapter 12) (DMHC, 2011).

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81 EXAMINING TWO CATEGORIES OF CARE IN SECTION 1302 denies them access to medically necessary and appropriate interventions. Members of Congress, she said, are very familiar with the term habilitation from its use in the Medicaid program, and, as indicated in floor statements, Congress clearly intended to include habilitation services and supports in the EHB package. 5,6 As stated in the ACA, the category of rehabilitative and habilitative services and devices is a broad category that, since combined, indicates that acquiring and retaining function are critical aspects of the benefit category. State Mandates Many states, Ms. Ford noted, have “recognized the importance of habilitation” by requiring private insurers to provide these services. Of the 23 states that passed statutes requiring coverage of benefits for people with autism spectrum disorders, 14 have used the term habilitative and rehabilitative care in the legislative language (NCSL, 2010a). In many states, she said, the term habilitative is defined as “any professional counseling and guidance service and treatment program, including applied behavior analysis that is necessary to develop, maintain and restore, to the maximum extent possible, the function of an individual” (Autism Speaks, 2011). Additionally, she said, many of these state mandates specifically require coverage of a broad list of therapies including occupational, physical, speech, and behavioral therapies (NCSL, 2010b).11 Illinois and Maryland have mandated health plans to provide habilitation services to children under age 18 with congenital, genetic, or early acquired disorders (Illinois Department of Insurance, 2010; Maryland Insurance Administration, 2009). Since 2000, Maryland has tracked the economic impact of the state mandate and found that the mandate costs two dollars of the average annual group health insurance policy premium, or 0.04 percent (Rosenblatt, 2007). Building an Evidence Base When committee member Dr. Ho asked how, in the absence of an evidence base for some of these services, plans should make medical necessity determinations, Ms. Ford responded that rehabilitative and habilitative ser- vices are “always based on an individualized plan of care” and that medical decisions are often based on decisions by patients, their families, and their health care provider. It would therefore be a mistake, she said, to “not take clinical expertise into account” when making medical necessity determinations. Mr. Thomas supported Ms. Ford’s argument while also noting that “you go with the highest level of evidence that you have.” While the evidence base for rehabilitative services has developed significantly, it is “still a work in progress,” Mr. Thomas said. Some medical necessity determinations, he noted, are obvious even without clear evidence: a randomized controlled trial (RCT) is not necessary, for example, to understand that providing an artificial limb to someone without limbs will improve function. Level I, RCT studies are not practical for many rehabilitation services and devices, he said, so “there must be a different way to approach the evidence base.” Mr. Thomas added that hospitals and payers often use proprietary rehabilitation treatment guidelines (e.g., McKesson’s InterQual ® guidelines and Milliman Care Guidelines®), which he described as “quite unrealistic in many instances.” Despite not being “particularly well evidence-based,” he said, they are often overly restrictive and rigidly applied. Dr. Ulicny noted that the Shepherd Center is part of a national study to measure outcomes of therapy ses - sions. After every session, therapists use a hand-held computer to enter what they did with the patient and the outcome of that particular session. This study, which is being conducted across six model centers, may help build an evidence base, he said. In lieu of this evidence, Dr. Sabin asked the presenters for examples of “clinically wise and ethically admi - rable managed care” in their fields. The American Physical Therapy Association, Dr. Ulicny noted, has developed an evidence-based database that makes available clinical decision-making support to providers. Additionally, Dr. Ulicny said, workers’ compensation programs are historically good at using processes and tools to make what Dr. Sabin described as “clinically well-informed and ethically admirable” decisions. The workers’ compensation 11 Others have pointed out that, in general, health insurance contracts cover only “medical” services. These contracts do not cover all potentially beneficial services (DMHC, 2011).

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82 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS model, Dr. Ulicny said, uses external case management, utilization management, and a collaborative approach with payers. This process ensures the workers’ compensation program does “what is best for the patient and family, the payer, and the provider.” REFERENCES AHRQ (Agency for Healthcare Research and Quality. 2007. Care of adults with mental health and substance abuse disorders in U.S. community hospitals, 2004. Rockville, MD: Agency for Healthcare Research and Quality. Autism Speaks. 2011. Nevada: Frequently asked questions on the Nevada Autism Insurance Reform Law (AB162) http://www.autismvotes.org/ site/c.frKNI3PCImE/b.4432467/k.BC88/Nevada.htm (accessed April 26, 2011). Chung, B., L. Jones, E. L. Dixon, J. Miranda, K. Wells, and Community Partners in Care Steering Committee. 2010. Using a community partnered participatory research approach to implement a randomized controlled trial: Planning Community Partners in Care. 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