Who Should Hold the Purse Strings for Addiction Treatment?
In a lawsuit that may change regulations across the country, a lawsuit in Pennsylvania is attempting to put the diagnosis and treatment for addiction under the control of insurers. The suit, if successful, would allow HMOs and others to deny care for rehab in the state.
Under insurance law, there is a principle of “parity.” This means that, as a whole, the industry agrees that conditions will be treated the same. A diagnosis of diabetes, for instance, should provide covered care that is similar to what other insurers allow and disease states shouldn’t be separated just because they cost more to treat.
According the National Conference of State Legislatures, parity is defined this way:
Parity, as it relates to mental health and substance abuse, prohibits insurers or health care service plans from discriminating between coverage offered for mental illness, serious mental illness, substance abuse, and other physical disorders and diseases. In short, parity requires insurers to provide the same level of benefits for mental illness, serious mental illness or substance abuse as for other physical disorders and diseases.
The difficulty comes in when a doctor recommends on treatment for their patient and a different doctor asks for another. The number and type of treatment facilities varies, and they are often quite different in their approach to rehabilitation. The “gold standard” is long-term, inpatient treatment – for several months. While this kind of treatment has demonstrated the best results, it comes at a high cost. And insurers don’t want to pay .
If the lawsuit is successful, decisions about what should be the standard of care for addiction treatment would be left up to the insurer instead of the medical community. This came up in Pennsylvania because of a law passed last year mandating coverage with only the referral of a physician or psychiatrist.
While a decision isn’t expected for many months, the battle will continue until a rational balance between cost and effectiveness can be reached. The modern understanding of addiction is of a disease, so it should fall under medical insurance. On the other hand, no one expects an HMO to fully cover every medical condition. The consequences may be extreme. Because of parity rules, dropping addiction coverage entirely may mean dropping all mental health coverage. And that is a solution that isn’t tenable either.