Stephanie Hepburn is a writer in New Orleans. She is the editor in chief of #CrisisTalk. You can reach her at .
Along with all the positive changes since the implementation of 988, there’s been an infusion of funding into the long undersupported mental health field, a tapestry of Medicaid reimbursement, 988 service fees and grants. “But the unfortunate truth,” said Paul Galdys, deputy CEO at Recovery Innovations, “is that commercial payers still aren’t on board.” “For 988 to be here to stay, crisis services must become parts of the [billable] healthcare delivery system.”
Many states use taxpayer funding to pay for crisis care services. Applying state Medicaid reimbursement rates to commercial insurers, says Galdys, could result in a massive reduction in taxpayer spending, upwards of 70 percent. “This savings could translate into tens of millions of dollars annually in many states,” he said.
Commercial insurers often pay for widely accepted professional fees, such as psychiatric evaluation, but that’s it. “That would be like insurance paying for a physician consult in the emergency department and then that’s all you get,” he said, adding that Medicare and commercial insurance continue not to cover staffing and facility costs in mental health and substance use disorder crisis care.
That’s why he and his co-authors have developed the Parity Action Plan for Emergency Behavioral Health Crisis Care, a seven-step approach to securing commercial payer reimbursement for emergency behavioral health crisis services. The Sozosei Foundation funded the plan and the ongoing corresponding technical assistance as part of its philanthropic efforts to decriminalize mental health. Melissa Beck, the foundation’s executive director, told CrisisTalk in November 2023 that enforcing the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 is essential for ensuring public and private insurers do their part.
The path to improved access to care, says Galdys, is sustainably-funded behavioral health systems. “Right now, the only way to have a sustainable system is if a local government entity, whether a state, county or city, pays for it,” he said, adding that until all payers embrace behavioral healthcare service, a community without strong, local financial backing can’t adequately operate these services. Without the crisis services people need, law enforcement has little choice but to book someone for whatever offense they may have committed while in crisis or take them to the emergency room. “The alternative is leaving people in the community struggling with homelessness or lack of care.”
Parity has been law — and an expectation, says Galdys — since 2008. Yet, the federal parity act has been largely unenforced. He hopes to help remedy the issue by giving crisis providers and state agencies a step-by-step guide on securing payment reimbursement from commercial insurance companies. If that fails, Galdys and his co-authors recommend pursuing a complaint or grievance with the state insurance department in the provider’s state.
They encourage service providers to include medical necessity criteria in their electronic health record psychiatric evaluation and submit service claims as soon as possible, attaching a cover letter with each claim submission. When cover letters can’t be attached to the claim, they recommend contacting the patient’s health plan provider department. If the insurer denies payment, the provider should initiate a formal appeal and register a complaint or grievance with the state’s insurance department. Those experiencing challenges can reach out to Galdys for technical assistance.
Within the parity action plan are examples, including a health insurance claim form and model letters for requesting approval for emergency behavioral health crisis care services and appeals. The authors also include contact information for insurance departments in U.S. states and territories.
While healthcare providers typically have medical billing personnel or outsource to a medical billing company, the uphill battle of mental health and substance use care reimbursement has been a disincentive for filing appeals. “Ours is a harder lift because many of us are starting with ‘No’ from commercial payers, but eventually, this gets easier,” said Galdys. He adds that when state budgets are determined, legislators need to include enough funding for providers to “chase down all these payers.”
Most states use managed care organizations to process Medicaid payments to behavioral health providers but Maryland uses an administrative service organization, allowing a third party to process all healthcare insurance claims and distribute payments to providers within the state, regardless of whether the insurer is public or private. Starting January 1, 2025, all claims from crisis providers in Maryland are expected to go to Carelon Behavioral Health, which is replacing Optum, a subsidiary of UnitedHealth Group, as the state’s administrative service organization. Carelon, says Galdys, is expected to pursue payment from every type of payer, including commercial and Medicare payments. “That takes the burden off of the provider other than submitting a clean claim.” The type of claim he’s referring to is one without errors or gaps that insurers can process without requiring further information or verification.
A common pushback from commercial insurance companies is the lack of standardization in crisis services. How can they know, they argue, whether a crisis center is providing best practices for crisis receiving and stabilization? Confusion is their friend, says Galdys, because, in communities with well-funded crisis services, commercial insurers receive the financial benefit of members getting treatment without paying anything. “While it would be cost-effective for them to reimburse these services and avoid expensive emergency department and lengthy inpatient hospitalization stays, what’s even cheaper is having someone else pay for it,” he said.
Galdys acknowledges commercial payers’ position that knowing whether a service is meeting requirements without clear, uniform definitions and standards can be challenging. “They’re not trying to research each program that asks for money,” he said. “They know what a hospital emergency department, an ICU and a skilled nursing facility do — they want services consistently defined.”
Since 2020, the national guidelines released by the Substance Abuse and Mental Health Services Administration have helped set standards and expectations for core crisis services such as regional or statewide crisis call centers coordinating in real-time, centrally deployed 24/7 mobile crisis and 23-hour crisis receiving and stabilization programs. “These create more likelihood, at least for core crisis services, that they’ll be reimbursed.”
The agency also recently convened a workgroup to further define crisis services, which are expected to be released later this year. “Federally defined services eliminate the argument from payers that they don’t know what-is-what,” said Galdys. “That will help lead to insurance parity.”
There have been few lawsuits against insurers for violating the federal parity act. However, in 2021, complaints by the U.S. Department of Labor and the New York State Attorney General against United Behavioral Health resulted in the commercial insurer paying roughly $16 million in settlement payments to participants and beneficiaries as well as penalties.
In recent years, the Strengthening Behavioral Health Parity Act in 2020 and the Consolidated Appropriations Act in 2021 have further fortified the federal parity act by requiring health insurance plans to demonstrate they’re using correct medical necessity standards and perform and provide a comparative analysis of how they apply nonquantitative treatment limitations such as prior authorization and out-of-network reimbursement rates. Plans must make these comparative analyses available to the U.S. Department of Labor.
States are also pushing back on the service definition argument from commercial insurers through legislation. California passed a 988 bill explicitly linking the Federal Mental Health Parity and Addiction Equity Act of 2008 and state parity law requirements. The law requires healthcare service plans and disability insurers to reimburse “medically necessary behavioral health crisis services” like 988 crisis centers.
In 2022, the Los Angeles regional office of the Employee Benefits Security Administration found that a self-insurance plan violated the federal parity act by imposing an unfair restriction on access to applied behavior analysis therapy, a research-based behavioral therapy for people with autism spectrum disorder or other developmental disorders. According to the Federal Department of Labor’s federal parity act comparative analysis report to Congress in 2023, the regional office required the plan to provide corrective action, resulting in the plan removing the violating exclusion and treatment plan requirement.
Last year, Washington State passed a law to protect consumers from out-of-network charges for crisis services. Among the listed emergency providers were crisis stabilization facilities and mobile crisis teams. Arlene Stephenson, a co-author of the parity action plan, told CrisisTalk in January 2023 that the legislation “made an equivalent to ambulances, emergency departments and emergency care centers.”
Washington State has also passed legislation establishing a new license for 23-hour behavioral health crisis relief centers but rulemaking and funding details haven’t been solidified. “The fact that regulations don’t actually exist means there’s no way to really see yet if reimbursement will happen,” said Galdys.
In developing the parity action plan, what Galdys found most alarming was the lack of response from commercial payers to claims. “I know we experience this [at Recovery Innovations] but I didn’t know how big of a struggle it is around the nation.” He was also surprised by how often providers don’t receive a denial. Instead, commercial insurers keep them in a loop of never-ending questions. “They [commercial insurers] just keep asking for more and more information until you eventually give up,” he said, adding that at some point, most providers do give up because otherwise, they won’t receive payment from their state or county, payments of last resort that can’t happen until providers have exhausted all payment sources. “As a provider, you go bankrupt if you don’t get payment.”
Questions from commercial insurers can go on for months, wearing on providers. This, says Galdys, is why he and his co-authors encourage providers to involve their state insurance department. “Even if you don’t have a denial, a lack of payment is one,” he said. Providers don’t have to continue waiting before moving forward with an appeal and filing a grievance with the state’s department of insurance. “You tell them you have a parity case.” State insurance departments have a strong incentive to help as payment of last resort often comes out of state general funds or grants.
He hopes providers go through the seven steps in the parity action plan with each claim, creating a trackable process for themselves and documentation they can provide to their state department of insurance and other local and federal agencies with the power to enforce parity, such as the U.S. Department of Labor and U.S. Department of Health and Human Services. “Crisis care is a healthcare service and must be recognized and paid for as a healthcare service,” said Galdys. “We need to stop relying on general funds as if it’s a public safety service — yes, it contributes to public safety but what these services really are is healthcare.”
