Your Parity Rights - Details on the Law

There are six classifications of benefits for purposes of Parity.

Benefit Classification

There are six classifications of benefits for purposes of Parity. Parity is determined on a classification basis. Thus, if a plan offers med/surg benefits in one classification, it must also provide on par MH/SA benefits in that classification. The classifications are:

  • Inpatient/in-network
  • Inpatient/out-of-network   
  • Outpatient/in-network
  • Outpatient/out-of-network      
  • Prescription drugs
  • Emergency
Quantitative parity benefits

Quantitative benefits are those which can be measured easily.  If an insurance company is not offering parity between quantitative benefits, it is usually easy to address.  Some examples of quantitative benefits that are addressed by parity legislation are:

  • Lifetime or annual dollar limits imposed on MH/SA benefits may NOT be more restrictive than those imposed on med/surg benefits.
  • Financial requirements (e.g., deductibles, co-payments, coinsurance, out-of-pocket expenses) imposed on MH/SA benefits may NOT be more restrictive than those imposed on med/surg benefits.
  • Treatment limitations (e.g., frequency of treatment, number of visits, number of days, or similar limits on scope or duration of treatment) imposed on MH/SA benefits may NOT be more restrictive than those imposed on med/ surg benefits.
  • There can be NO separate cost-sharing requirements or treatment limitations that are applicable only to MH/SA benefits.
Non-quantitative treatment limitations

In addition to the financial requirements and treatment limits there are also limits on the scope or duration of treatment that are not so easily quantified, which must also be comparable under both benefits. These are called "non-quantitative treatment limits." These include:

  • Medical management standards;
  • Use of fail first or step therapy protocols;
  • Use of failure to complete a course of treatment;
  • Methods for determining usual, customary and reasonable charges.
Additional protections

There are a few additional protections offered through parity legislation.

Medical Necessity Determination and Disclosure

  • Criteria for medical necessity determinations and the reason for any denial must be made available to contracted providers or the plan participant or beneficiary upon request
  • Thus, plans can no longer take the position that medical necessity criteria or specific reasons for denial are "proprietary" or can otherwise be withheld. Please be sure to make your request in writing, and seek a prompt/immediate response.

Where there is a state parity law or state mandate, the Federal Parity law serves as the floor and state laws must be enhanced to reach the federal floor.

Combined deductibles and out-of-pocket maximums:

  • Deductibles and out-of-pocket maxes are to be combined for both med/surg and MH/SA benefits. (Annual and lifetime limits must be equal, but may be maintained separately). Be certain that plans are not quoting or applying separate deductibles or out-of-pocket maxes.