Implementation of Mental Health Parity: Lessons From California

Objective: This article reports the experiences of health plans, providers, and consumers with California's mental health parity law and discusses implications for implementation of the 2008 federal parity law. Methods: This study used a multimodal data collection approach to assess the first five years of California's parity implementation (from 2000 to 2005). Telephone interviews were conducted with 68 state-level stakeholders, and in-person interviews were conducted with 77 community-based stakeholders. Six focus groups included 52 providers, and six included 32 consumers. A semistructured interview protocol was used. Interview notes and transcripts were coded to facilitate analysis. Results: Health plans eliminated differential benefit limits and cost-sharing requirements for certain mental disorders to comply with the law, and they used managed care to control costs. In response to concerns about access to and quality of care, the state expanded oversight of health plans, issuing access-to-care regulations and conducting focused studies. California's parity law applied to a limited list of psychiatric diagnoses. Health plan executives said they spent considerable resources clarifying which diagnoses were covered at parity levels and concluded that the limited diagnosis list was unnecessary with managed care. Providers indicated that the diagnosis list had unintended consequences, including incentives to assign a more severe diagnosis that would be covered at parity levels, rather than a less severe diagnosis that would not be covered at such levels. The lack of consumer knowledge about parity was widely acknowledged, and consumers in the focus groups requested additional information about parity. Conclusions: Experiences in California suggest that implementation of the 2008 federal parity law should include monitoring health plan performance related to access and quality, in addition to monitoring coverage and costs; examining the breadth of diagnoses covered by health plans; and mounting a campaign to educate consumers about their insurance benefits. (Psychiatric Services 60: 1589-1594, 2009)