Mental health patient’s room, board covered under mental health parity law

A federal district court erred in ruling that an employer-sponsored health insurance plan was not required to cover room and board costs incurred by an insured while receiving treatment at a residential mental health facility, the U.S. Court of Appeals for the Ninth Circuit ruled. Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), the plan’s coverage for stays at licensed inpatient residential treatment facilities had to be no more restrictive than stays at skilled nursing facilities. Thus, the plan was precluded from deciding that it would provide room and board reimbursement at licensed skilled nursing facilities for medical and surgical patients, but not at residential treatment facilities for mental health patients.

MHPAEA. The MHPAEA requires that benefits in a plan that provides for “both [(1)] medical and surgical benefits and [(2)] mental health or substance use disorder benefits” (such as the one at issue here) must not impose more restrictions on the latter than it imposes on the former. In the Ninth Circuit’s view, this language clearly directs that benefits and treatment limitations for mental health problems shall be “no more restrictive” than those for medical and surgical problems. Although the MHPAEA is open to interpretation as to its application to specific ERISA plan terms and situations, the appellate panel was satisfied that it precluded the plan administrator in this case from deciding that it would provide room and board reimbursement at licensed skilled nursing facilities for medical and surgical patients, but not provide room and board reimbursement at residential treatment facilities for mental health patients.

Regulations. The court also noted that nothing in the regulations implementing the MHPAEA definitively answered the question at issue in this case, but that nothing in them was contrary to the court’s interpretation. In fact, the Interim Final Rules indicated that mental and medical/surgical benefits must be congruent, and that limiting the former while not placing a similar limitation on the latter would be improper. According to the court, the language of the Interim Final Rules strongly suggested that a plan cannot allow room and board costs at a skilled nursing facility where the insured is an inpatient, while denying them at a residential treatment facility where the insured is an inpatient. Moreover, the Final Rules explicitly state that coverage at residential treatment facilities must be like the coverage at skilled nursing facilities. Thus, the plan administrator in this case should not have denied the insured coverage on the basis that her stay was at a residential mental health treatment facility.

SOURCE: Danny P. v. Catholic Health Initiatives, (CA-9), No. 16-35609, June 6, 2018.
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