Last week, the Office of Inspector General (OIG) released a report finding that the Centers for Medicare & Medicaid Services (CMS) did not ensure that selected states complied with Medicaid managed care mental health parity requirements. Of the eight states reviewed — Arizona, Illinois, Kansas, Mississippi, New Jersey, New York, South Carolina and Texas — the OIG found that state contracts with Medicaid managed care organizations (MCOs) failed to meet a number of requirements under a 2016 final rule addressing how parity requirements from the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) apply to Medicaid MCOs. As highlighted by the OIG, the MHPAEA was passed to promote equal access to treatment for people with mental health and substance use conditions and prevent higher financial requirements or more stringent treatment limitations (i.e., higher copays, stricter prior authorization requirements or medical necessity reviews) for benefits related to mental health conditions and substance use as compared to medical and surgical benefits.
Findings: Among the findings in the report, the OIG found that for all eight states reviewed, state contracts with Medicaid MCOs did not contain required parity provisions by the compliance date (October 2, 2017). States and their MCOs also did not conduct timely parity analyses in five states (Arizona, Illinois, New Jersey, New York, and Texas) and none of the eight states made documentation of compliance available to the public by the compliance date.
In addition, the OIG found that the selected states may not have ensured that services were delivered to individuals enrolled in the MCOs in compliance with parity requirements. This includes MCOs in all eight states imposing non-quantitative treatment limits (i.e., prior authorization, fail first requirements) on mental health and substance use services that were more stringent than those for medical/surgical benefits. The OIG also found that MCOs in two states (Mississippi and South Carolina) did not comply with parity requirements for financial requirements and MCOs in six states (Arizona, Kansas, Mississippi, New York, South Carolina, and Texas) did not comply with parity requirements when it came to quantitative treatment limits.
According to the report, states and their MCOs corrected some of these areas after the October 2017 compliance date; however, in some states, deficiencies remained uncorrected.
Unfortunately, the OIG did not appear to ask or review whether the public could access the underlying MCO contracts to see what they have to say regarding parity – this is despite CMS regulations requiring states to post their MCO risk contracts. According to a quick scan on our end, only five (Illinois, Mississippi, New Jersey, South Carolina, Texas) of the eight states post their full MCO risk contracts. Arizona, Kansas, and New York post parts of contracts or make reference to them, but do not appear to post their MCO risk contracts for all populations including children and families.
Ultimately, the OIG report concludes that neither CMS nor the selected states provided adequate oversight of state or MCO compliance with parity requirements. Particularly concerning — in states where MCOs were responsible for performing parity analysis — CMS stated that it did not review information MCOs provided regarding compliance as part of its MCO contract approval process or communicate with states regarding whether MCOs identified any noncompliance with parity requirements. Among other concerns and challenges, OIG also notes that most of the states had no formal procedures in place to ensure MCO’s ongoing compliance with parity requirements and lacked timely (and mandatory) parity compliance information on state websites.
Recommendations: The OIG includes a list of eight recommendations to CMS including requiring states in which MCOs are responsible for the parity analysis to submit information provided by MCOs regarding compliance to CMS for its review as part of CMS’s contract approval process and requiring MCOs to update parity analyses when benefits change or a new MCO is added. The full list of OIG recommendations can be found here (see page 12).
We’d also add two more. As noted above, CMS should work to ensure states are posting their full MCO risk contracts. This would allow the public to see what these taxpayer dollar supported contracts actually say, including in regards to parity provisions. In addition, CMS should also ensure states come into compliance with the requirement that they provide documentation of parity compliance to the public and post this information on their state Medicaid websites. The OIG mentions this requirement multiple times in its report and even notes that two states (Kansas and South Carolina) have not posted this information. Yet, a recommendation to CMS to ensure state posting of parity compliance information appears to be missing from their list. When it comes to CMS’s response, according to the report, CMS concurred with the OIG recommendations and described actions it plans to take to address them, including that CMS will issue guidance to states. We will be watching closely to see how this lines up with how CMS plans to respond to its fall request for comments on processes for assessing compliance with mental health parity and addiction equity in Medicaid and the Children’s Health Insurance Program (CHIP). CCF’s full comments in response to that request can be found here.
