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SAMHSA’s Award-Winning Newsletter
January/February 2010, Volume 18, Number 1 

photo of a crowd with the word “parity” written over it

Parity: Landmark Legislation Takes Effect
What Are the Implications for Millions of Americans?

On January 1, 2010, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 went into effect, with interim final regulations issued on January 29.

What will the law do for people with mental health and substance abuse disorders and their families?

Passed as part of the stimulus package, the law ends discrimination against consumers of mental health and substance abuse treatment services in many health insurance plans. That means it gives consumers better access to the care they need.

"The passage of this landmark legislation was the culmination of years of work by consumers, providers, advocates, and others," said SAMHSA Administrator Pamela S. Hyde, J.D. "This historic occasion marks the beginning of improved coverage for an estimated 113 million Americans."

Ending Unequal Treatment

In the past, health plans have often treated mental health and substance abuse treatment services differently than they have medical and surgical benefits. The new parity law ends that practice in group health plans offered by employers with more than 50 employees. Now plans that offer both physical and mental health benefits must treat the two similarly, explained Kevin D. Hennessy, Ph.D., the Science to Service Coordinator in SAMHSA’s Office of Policy, Program, and Budget.

"Historically, access to care has been low," said Dr. Hennessy, noting that financial concerns are one of the primary obstacles to receiving care. SAMHSA’s 2008 National Survey on Drug Use and Health, for example, found that by far the biggest barrier to people receiving the treatment they needed was lack of health coverage and inability to pay. "Now those financial reasons should be less of a barrier," said Dr. Hennessy.

The law focuses primarily on two areas: financial requirements and treatment limitations.

Financial requirements, such as copayments, deductibles, and out-of-pocket limits, must be the same for both mental health and substance abuse services, and medical and surgical services.

Similarly, the number of visits allowed, duration of treatment, and other treatment limitations can’t be more restrictive for mental health and substance abuse services.

Regulations released in January 2010 flesh out the details of the law’s implementation. The regulations were crafted by the Centers for Medicare & Medicaid Services within the U.S. Department of Health and Human Services, the Internal Revenue Service within the U.S. Department of the Treasury, and the Employee Benefits Security Administration within the U.S. Department of Labor, which are responsible for enforcing different aspects of the law.

SAMHSA’s staff helped analyze more than 400 public comments after the law was passed. SAMHSA also helped identify key issues to include in the regulations and draft the document’s language. "We played an important behind-the-scenes role," said Dr. Hennessy.

"SAMHSA is committed to making sure that everybody knows how parity can help people with substance abuse issues get the help they need more than ever before," said H. Westley Clark, M.D., J.D., M.P.H., Director of SAMHSA’s Center for Substance Abuse Treatment (CSAT).

Understanding the Regulations

One important element of the regulations is that parity needs to be "operationalized" in six classes of benefits, explained Dr. Hennessy. Covered plans must ensure parity of financial requirements and treatment limitations within inpatient/in-network services, inpatient/out-of-network services, outpatient/in-network services, outpatient/out-of-network services, emergency care, and prescription drug coverage.

"Insurers need to offer mental health and substance abuse benefits in any of the classes they’re offering medical and surgical benefits," Dr. Hennessy explained. "For example, they can’t just offer inpatient mental health services when on the medical and surgical side, they’re offering inpatient, outpatient, prescription drug, and emergency care."

Another key part of the regulations is the area of "non-quantitative" treatment limitations. Insurers use various techniques to manage costs. They may require beneficiaries to get pre-approval before receiving certain types of treatment, for instance. Or they might require beneficiaries to try a less intensive type of treatment before allowing them to move up to a more intensive level of services.

According to the new regulations, insurers cannot apply these utilization management techniques differently for mental health and substance abuse services than they do for medical and surgical benefits.

The regulations also clarify that the parity law applies to Medicaid managed care plans and the State Children’s Health Insurance Program. While the parity law doesn’t apply to Medicare patients, the recent Medicare Improvements for Patients and Providers Act brings parity to copayments for outpatient mental health services.

Of course, the parity law doesn’t affect everyone. "Small employers are essentially exempt," said Dr. Hennessy, noting that the law doesn’t cover employers with 50 or fewer employees. And while the law mandates parity in plans that offer mental health and substance abuse services, it doesn’t require plans to offer those services.

Next Steps

Just passing the law isn’t enough, emphasized Jeffrey A. Buck, Ph.D., Chief of the Survey, Analysis, and Financing Branch in the Division of State and Community Systems Development at SAMHSA’s Center for Mental Health Services (CMHS).

"Passage of the law doesn’t get you there," said Dr. Buck. "There are things you need to do after a law like this is passed to make sure it’s truly effective."

Recent research by Dr. Buck and others shows why that’s so. Published in the journal Psychiatric Services in December 2009, the study looked at what happened in California after the state implemented its own parity law in 2000. (See "Parity Law: Lessons Learned from California" SAMHSA News, November/December 2009.) The research showed that 44 percent of the consumers in the study weren’t familiar with the law, even though most of them had diagnoses covered by it.

The implications of that research are clear as the national parity law rolls out, said Dr. Hennessy.

Educating Providers

The first step is education. "Providers should make sure that they become familiar with the law and its provisions and understand how it will affect the people they are serving," Dr. Hennessy said, noting that providers should review the benefits offered by the insurers that cover their clients. Providers also have an important role in monitoring whether insurers are following the law according to the regulations.

SAMHSA plans to develop materials and provide technical assistance to help various constituencies understand the law’s provisions and the rights and responsibilities of those affected, he added.

"For consumers of mental health services, the parity law can make a difference," said A. Kathryn Power, Director of CMHS. "Whether it’s access to counseling, medications, or building awareness about mental health, we are hopeful this law will help create more access to services."

  Cover Story & Related Articles  

Parity: Landmark Legislation Takes Effect

  Suicide Prevention   
Grantee Highlights

Grantee Highlights

Read about activities at Tufts University and Penn State Altoona.

  A Visit to SAMHSA  

  Underage Drinking  
Game Helps Parents & Children Talk about Alcohol

Game Helps Parents & Children Talk about Alcohol

An interactive way for families to discuss the dangers of underage drinking.

State Prevention Videos

State Prevention Videos

Videos describe unique challenges and successes.

  This Emotional Life  
PBS Documentary Launches Campaign of Hope

PBS Documentary Launches Campaign of Hope

Web site includes toolkits for parents and military families.

  Teens & Young Adults  
Violent Behaviors among Teen Girls

Violent Behaviors & Teen Girls

You may think only boys get into fights. Think again . . .

Drinking after 21st Birthday

Drinking after 21st Birthday

Does turning 21 affect the amount of alcohol young people drink?

  Treatment Roundup   
Substance Abuse Treatment Facilities

Substance Abuse Treatment Facilities

Characteristics of alcohol and drug abuse treatment services.

Providing E-Therapy

Providing E-Therapy

Considerations for providers incorporating technology into treatment!

Heroin Admissions

Heroin Admissions

Find out about adolescents who received treatment for heroin use.

  Recovery Month  
Now More Than Ever

Now More Than Ever

Updated Recovery Month Web site includes new theme, Web banners, and a blog.

  In Memoriam  
Remembering Judi Chamberlin

Remembering Judi Chamberlin

SAMHSA honors a courageous advocate for the fundamental rights and dignity of people with mental illnesses.

  Also in This Issue  
National Registry Offers New Feature

National Registry Search

Evidence-based programs and comparative effectiveness.

Older Adults & Illicit Drug Use

Older Adults & Illicit Drug Use

More people over age 50 are using illicit drugs.

Science and Service Awards

Science and Service Awards

Call for applications due April 9.

Community Prevention Day

Community Prevention Day

Prevention professionals gathered for the annual event.


Substance Abuse & Mental Health Services Administration – 1 Choke Cherry Road – Rockville, MD 20857
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