June 19, 2008

TO: Board of Trustees
APA Assembly
APAPAC
Council on Advocacy & Public Policy
Committee on Government Relations
Committee on Advocacy and Litigation Funding
Committee on Public Affairs
All APA Members
District Branch/State Association Executive
Staff
All APA Staff

FR: Nick Meyers, Director of Government Relations

RE: URGENT BREAKING NEWS: House, Senate Have Reached
Agreement on Substance of a Final Mental Health Parity
Bill; Obstacles Remain

Last night, Senate and House negotiators reached
agreement on the terms of a compromise mental health
parity bill. While this is tremendous news, I need to
caution that the legislative text of the agreement has
not been released, so DGR staff has not yet had an
opportunity to review the details. More importantly,
as of this update there is no proposal on how to find
the funds to offset the projected cost of the
agreement. This last caveat is particularly important,
since a single objection in the Senate could block
final passage. Please note that information may change
as more details are known.

The outline of the agreement as reported looks very
much like what we have predicted it would be all
along, and amply validates the wisdom of the Board of
Trustees in supporting both the Senate- and
House-passed bills as part of a process to a final
conference agreement. Key details include:

-- Preemption. The House accepted the Senate language,
which defers to current HIPAA law. This means that
existing state parity laws will be protected. We are
seeking additional details about how the federal
parity law will wrap around existing state parity
requirements.

-- Out-of-Network Services. The Senate accepted the
preferred House language that requires out-of-network
mental and substance use disorder services to be
provided under the same terms and conditions when a
plan provides out-of-network medical/surgical
benefits. As you know, the Senate proposal would have
permitted plans to offer medical/surgical
out-of-network benefits without offering any mental
health/SUD benefits.

-- Coverage Definition. As we have predicted and per
the most recent House compromise offer to the Senate,
the House dropped DSM as the coverage standard and
instead accepted the Senate language, which means that
coverage would be subject to the terms and conditions
of the plan, as modified by applicable state law.

We have also been advised that the compromise retains
important House language requiring greater
transparency of coverage determinations and also
directing GAO to report to Congress on variances in
medical necessity determinations. We believe this will
make it more difficult for plans to game the system.

Again, I have to caution that important details cannot
be verified until the legislative language has been
released, and that until a cost offset can be found
that is acceptable to both the Senate and the House,
the compromise cannot be passed and sent to the
President for his signature. That does not in any way
diminish the fact that this is an historic
accomplishment. It would not have been possible
without the tireless efforts of the Board of Trustees,
the Assembly, APA advocacy leaders, our District
Branches and State Associations and their dedicated
Executive Staff, and of course the APA’s Congressional
Action Network (APA-CAN!) who have advocated year
after year on behalf of your patients and their
families.

We will soon get back to you with further details on
the bill and the process ahead.