Vermont Court First to Rule in Mental Health Parity Law Case

On April 30 a federal court in Vermont became the first court to interpret the 2008 federal parity law, known as the Mental Health Parity and Addiction Equity Act (MHPAEA). The ruling by the U.S. District Court for the District of Vermont was in favor of the plaintiff, identified as C.M., who charged that Fletcher Allen Health Care Inc., the administrator of her health plan, violated the parity law in three ways: 1) by requiring preapproval for routine mental health services but not for other medical services, 2) by conducting concurrent reviews of mental health services but not requiring such reviews for other medical services, and 3) by initiating automatic review processes triggered by a fixed number of visits for mental health services but not for other medical services.

Fletcher Allen argued that under the law's finals regulations, in addition to demonstrating that mental health services were treated in a different manner than medical-surgical services, patients have to demonstrate that “no clinically appropriate standard of care would permit a difference,” to prove a violation of the MHPAEA. The court rejected this argument, stating that "the Parity Act was promulgated to eliminate impermissible disparity in the benefits afforded for mental health and substance abuse disorders when compared to those afforded medical/surgical conditions.... It stands to reason that plan administrators would also bear the burden of establishing under the Parity Act, why mental health and medical benefits are treated differently based upon divergent clinical standards.”

APA assisted C.M.'s counsel in preparing the parity-law-related arguments in this case. Commenting on the case, APA Medical Director James H. Scully Jr., said, "We look forward to the day when parity is fully realized and those with a mental illness and/or substance use disorders can expend their energy and resources conquering the illness, rather than battling the insurance companies for the coverage to which they are entitled and for which they and their employer have paid."

For more on legal actions regarding the parity law, see Psychiatric News here and here. The court decision is posted here.

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