[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]





                             MENTAL HEALTH
                       AND SUBSTANCE ABUSE PARITY

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 27, 2007

                               __________

                           Serial No. 110-30

                               __________

         Printed for the use of the Committee on Ways and Means





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                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, California       JIM MCCRERY, Louisiana
SANDER M. LEVIN, Michigan            WALLY HERGER, California
JIM MCDERMOTT, Washington            DAVE CAMP, Michigan
JOHN LEWIS, Georgia                  JIM RAMSTAD, Minnesota
RICHARD E. NEAL, Massachusetts       SAM JOHNSON, Texas
MICHAEL R. MCNULTY, New York         PHIL ENGLISH, Pennsylvania
JOHN S. TANNER, Tennessee            JERRY WELLER, Illinois
XAVIER BECERRA, California           KENNY HULSHOF, Missouri
LLOYD DOGGETT, Texas                 RON LEWIS, Kentucky
EARL POMEROY, North Dakota           KEVIN BRADY, Texas
STEPHANIE TUBBS JONES, Ohio          THOMAS M. REYNOLDS, New York
MIKE THOMPSON, California            PAUL RYAN, Wisconsin
JOHN B. LARSON, Connecticut          ERIC CANTOR, Virginia
RAHM EMANUEL, Illinois               JOHN LINDER, Georgia
EARL BLUMENAUER, Oregon              DEVIN NUNES, California
RON KIND, Wisconsin                  PAT TIBERI, Ohio
BILL PASCRELL JR., New Jersey        JON PORTER, Nevada
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
CHRIS VAN HOLLEN, Maryland
KENDRICK MEEK, Florida
ALLYSON Y. SCHWARTZ, Pennsylvania
ARTUR DAVIS, Alabama

             Janice Mays, Chief Counsel and Staff Director

                  Brett Loper, Minority Staff Director

                                 ______

                         Subcommittee on Health

                FORTNEY PETE STARK, California, Chairman

LLOYD DOGGETT, Texas                 DAVE CAMP, Michigan
MIKE THOMPSON, California            SAM JOHNSON, Texas
RAHM EMANUEL, Illinois               JIM RAMSTAD, Minnesota
XAVIER BECERRA, California           PHIL ENGLISH, Pennsylvania
EARL POMEROY, North Dakota           KENNY HULSHOF, Missouri
STEPHANIE TUBBS JONES, Ohio
RON KIND, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.











                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 20, 2007, announcing the hearing...............     2

                               WITNESSES

The Honorable Jim Ramstad, a Representative in Congress from the 
  State of Minnesota.............................................     5
The Honorable Patrick J. Kennedy, a Representative in Congress 
  from the State of Rhode Island.................................     8

                                 ______

David L. Shern, Ph.D., President and CEO, Mental Health America, 
  Alexandria, Virginia...........................................    19
Kathryne L. Westin, M.A., L.P., Eating Disorders Coalition for 
  Research, Policy and Action....................................    29
Michael Quirk, Ph.D., Director, Behavioral Health Service, Group 
  Health Cooperative, Seattle, Washington........................    25

                                 ______

Eric Goplerud, Ph.D., Director, Ensuring Solutions to Alcohol 
  Problems, George Washington University.........................    42
Ronald W. Manderscheid, Ph.D., Director of Mental Health and 
  Substance Use Programs, Constella Group LLC, Baltimore, 
  Maryland.......................................................    50
Henry T. Harbin, M.D., Baltimore, Maryland.......................    54

                       SUBMISSIONS FOR THE RECORD

American Academy of Child and Adolescent Psychiatry, statement...    66
American Association for Geriatric Psychiatry, statement.........    68
American Association for Marriage and Family Therapy, statement..    71
Amy Kuehn, Indianapolis, IN, statement...........................    73
Linda Hay Crawford, Therapeutic Communities of America, statement    74
Mike Fitzpatrick, statement......................................    76
National Association of Anorexia Nervosa and Associated 
  Disorders, statement...........................................    79
National Association of Health Underwriters, Arlington, VA, 
  statement......................................................    80
National Association of Pediatric Nurse Practitioners, statement.    81
Kathleen Grant, Portland, OR, statement..........................    82
Therapeutic Communities of America, statement....................    84

 
                             MENTAL HEALTH
                       AND SUBSTANCE ABUSE PARITY

                              ----------                              


                        TUESDAY, MARCH 27, 2007

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:07 a.m., in 
Room 1100, Longworth House Office Building, Hon. Fortney Pete 
Stark (Chairman of the Subcommittee), presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON HEALTH

                                                CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
March 20, 2007
HL-7

                   Health Subcommittee Chairman Stark

                         Announces a Hearing on

                Mental Health and Substance Abuse Parity

    House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) 
announced today that the Subcommittee on Health will hold a hearing on 
mental health and substance abuse parity. The hearing will take place 
at 10:00 a.m. on Tuesday, March 27, 2007, in Room 1100, Longworth House 
Office Building.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Mental illness affects 24 percent of the adult population, with 
over 5 percent suffering from serious mental illness. In 2002, 
President Bush identified unfair treatment limitations placed on mental 
health benefits as a major barrier to mental health care and urged 
Congress to enact legislation that would provide full parity in the 
health insurance coverage of mental and physical illnesses.
      
    According to the National Institutes of Health, mental illness and 
substance abuse are biological diseases, and yet both private and 
public health insurers make it more difficult for patients to get 
treatment for these diseases. Health plans have imposed lower annual or 
lifetime dollar limits, covered fewer hospital days or outpatient 
office visits, or increased cost sharing by raising deductibles or 
copayments for patients with mental illness.
      
    In 1996, a compromise measure, the Mental Health Parity Act (MHPA) 
(P.L. 104-204), was enacted which provided partial parity for the 
private health insurance marketplace. It prohibited separate annual and 
lifetime dollar limits for mental health care, but did not stop group 
plans from imposing restrictive treatment limits or cost sharing. In 
addition, the MHPA was specifically not applicable to substance abuse 
treatment. As a consequence, mental health and substance abuse 
treatment are still not on parity with physical health care. A recent 
study of costs associated with adding mental health and substance abuse 
services to the Federal Employees Health Benefits Plan concluded that 
implementation of benefits led to a negligible cost increase.
      
    Medicare also fails to provide mental health parity. Medicare's 
mental health benefit is fashioned on the treatment provided in 1965, 
but treatments have changed dramatically in the last 42 years. 
Inpatient coverage at psychiatric hospitals is limited to 190 days over 
the beneficiary's lifetime. In addition, beneficiaries are charged a 
discriminatory 50 percent copayment for outpatient psychotherapy 
services, compared to 20 percent for physical health services. New 
mental health and substance abuse treatment paradigms, such as 
evidence-based collaborative care models, are also long overdue for 
inclusion in Medicare.
      
    ``It is long past time to address the inequities in mental health 
coverage in private plans and Medicare,'' commented Chairman Rep. Pete 
Stark (D-CA), Chairman of the Ways and Means Health Subcommittee. 
``This hearing will lay the groundwork for future action on this 
important issue.''

FOCUS OF THE HEARING:

      
    The hearing will focus on legislation and options to provide mental 
health and substance abuse treatment parity in private health insurance 
and in Medicare.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
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submission as a Word or WordPerfect document, in compliance with the 
formatting requirements listed below, by close of business Tuesday, 
April 10, 2007. Finally, please note that due to the change in House 
mail policy, the U.S. Capitol Police will refuse sealed-package 
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encounter technical problems, please call (202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
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    1. All submissions and supplementary materials must be provided in 
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be accepted for printing. Instead, exhibit material should be 
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with disabilities. If you are in need of special accommodations, please 
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materials in alternative formats) may be directed to the Committee as 
noted above.

                                 

    Chairman STARK. If our guests would like to find seats, and 
we could begin our hearing. We are going to examine an 
important change to two important parts of our health care 
system, the issue of mental health parity in the private health 
insurance market and mental health parity in government 
programs.
    There have been tremendous changes in diagnosis and 
treatment of mental illness and substance abuse, but the laws 
governing the treatment have not moved as quickly, and we 
typically have insurers, government and private, imposing lower 
treatment or higher dollar barriers, higher copayments, 
limitation of hospital periods. This discrimination does not 
apply any longer to the Federal Employees Health Benefit Plan, 
but Medicare continues to have it.
    One in four adults will suffer from some form of mental 
illness, and 5 percent with severe, and one in five seniors 
will experience mental disorders that are not part of the 
normal aging process. Those of us over 65 have one of the 
highest suicide rates, account for 20 percent of the suicide 
deaths in the United States, while only 13 percent of the 
population.
    I want to thank my colleagues: Mr. Ramstad, who is a Member 
of our Subcommittee; Mr. Kennedy from Rhode Island, who will 
testify along with Mr. Ramstad today. These two have been 
fighting for full parity and for mental health and substance 
abuse treatment, and they are to be congratulated. They have 
taken this issue on the road, as we say, hosting field hearings 
around the country, and today we are going to hear more about 
what they have learned. They have 256 original cosponsors. That 
is more than the 218 we need to pass a bill. It is the Paul 
Wellstone Mental Health and Addiction Equity Act. It is H.R. 
1424, and we will hear more about that from our witnesses.
    Our first two panels will discuss the need for mental 
health parity for those with private health insurance, and with 
strong support in the House and Senate, I am hopeful that we 
will see this bill move ahead. The third panel will focus on 
the need for mental health parity in Medicare, and its mental 
health benefit is fashioned on treatment provided in 1965, and 
inpatient coverage in psychiatric hospitals. It is limited to 
190 days over a beneficiary's lifetime. In addition, there is a 
50 percent coinsurance for outpatient psychotherapy as compared 
to only a 20 percent coinsurance for physical health services, 
obviously a discriminatory barrier.
    Because of these limitations, Medicare spending in mental 
health is skewed toward the costly hospital services. In 2001, 
56 percent of mental health spending in Medicare went to 
inpatient care, which was over twice the national average of 24 
percent. Conversely, the percentage of Medicare spending for 
cost-effective outpatient care is far below the national trend.
    I have introduced legislation since 1995 that provides 
mental health and substance parity in Medicare for inpatient/
outpatient services. It would also redesign the outpatient 
benefit to make it easier for beneficiaries to get mental 
health services from cost-efficient options in the community.
    Again, I want to thank Mr. Ramstad and Mr. Kennedy for 
helping me introduce H.R. 1663 this year. President Bush in 
April of 2002 identified unfair treatment limitations in mental 
health as a major barrier to mental health care. He launched 
the New Freedom Commission on Mental Health to identify how 
mental health care could be improved. One of our panelists 
today who served on that Commission will discuss their 
suggestions. President Bush also urged Congress to enact 
legislation that would provide full parity in the mental health 
insurance coverage of mental and physical illnesses. I agree. 
It is time to end this discrimination against mental health in 
both commercial insurance and in Medicare.
    [The information follows: PENDING]
    Chairman STARK. I want to thank our panelists this morning, 
and we will ask Mr. Ramstad, who is a Member of the Committee, 
to proceed.
    Mr. CAMP. I'm sorry?
    Chairman STARK. Protocol and good sense would require that 
Mr. Camp have some opening remarks.
    Mr. CAMP. Thank you, Mr. Chairman. I also want to welcome 
our colleagues Mr. Ramstad and Mr. Kennedy to the Committee. We 
all recognize the importance of health benefits for individuals 
suffering from mental conditions, and by managing the treatment 
of an individual suffering from mental illnesses, health 
insurers can provide medical care that can lead to better 
health and lower costs in the future. Given the dramatic 
increases in health care costs in recent years, many employers 
are already dropping or limiting health care coverage. This in 
turn makes it more difficult for their employees to obtain any 
health insurance, including mental health benefits.
    The question this Subcommittee needs to ask is whether or 
not access to mental health benefits and, more broadly, health 
care insurance will be unintentionally reduced because of the 
added cost to employers. I hope that we will get a chance today 
to discuss another mental health parity bill which is being 
developed in the Senate by Senators Kennedy and Enzi. Both 
bills include a requirement for employers and health plans to 
cover treatment for mental illnesses on the same terms and 
conditions as all other illnesses. The Senate, however, adopts 
a different approach to defining covered diseases and mandates 
about the networks and providers that must be covered. This 
approach may significantly reduce the potential cost that could 
be imposed upon employers.
    It is my hope that Congress can move forward with the goal 
of enacting a bill that expands access to appropriate mental 
health services while not reducing any worker's access to 
health care benefits. I look forward to working with my 
colleagues and with Chairman Stark on this issue.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Chairman STARK. Thank you, Mr. Camp.
    [The information follows: PENDING]
    Chairman STARK. Jim, would you like to proceed to enlighten 
us?

STATEMENT OF THE HON. JIM RAMSTAD, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF MINNESOTA

    Mr. RAMSTAD. Thank you, Mr. Chairman, Ranking Member Camp 
and all other friends and colleagues of the Subcommittee. Thank 
you for holding this important hearing today.
    As you know, ensuring access to mental health and addiction 
treatment is more than just a public policy issue to me. It is 
a life-or-death issue, like it is for 26 million Americans 
suffering the ravages of chemical addiction and 54 million 
Americans suffering from mental illness, something I have been 
working on since 1996, and I certainly appreciate the hearing 
we are having here today.
    On July 31, 1981, I woke up in a jail cell in Sioux Falls, 
South Dakota, under arrest for a variety of offenses stemming 
from my last alcoholic blackout. I am alive and sober today 
only because of the access that I had to treatment along with 
the grace of God and the fellowship of other recovering people 
for the past 25\1/2\ years.
    I am living proof that treatment works, and recovery is 
possible, but too many people don't have the access to 
treatment that I had. It is a national disgrace that 270,000 
Americans were denied addiction treatment last year, American 
people suffering from this disease who had admitted their 
powerlessness over chemicals, their life had become 
unmanageable, and the treatment doors were slammed in their 
faces.
    It is estimated that 8 million people in health plans are 
unable to access treatment for chemical dependency despite 
being in plans that purportedly cover treatment for this 
disease. Last year alone, 150,000 of our fellow Americans died 
as a direct result of chemical addiction, and 30,000 Americans 
committed suicide from untreated depression, and I believe it 
is a national crisis that untreated addiction and mental 
illness costs our economy, and there are various studies that 
corroborate this, over $550 billion last year. Of course, we 
all know of the cost that can't be measured in financial terms, 
the human suffering, broken families, shattered dreams, ruined 
careers, destroyed lives.
    It is time to end the discrimination against people 
suffering the ravages of mental illness and chemical addiction. 
I believe it is time to pass the Paul Wellstone Mental Health 
and Addiction Equity Act. This important legislation would 
simply prohibit health insurance companies from imposing 
discriminatory barriers to mental health or addiction treatment 
through limited treatment stays, higher copayments, deductibles 
or cost-sharing requirements; that is, discriminatory barriers 
that don't exist for other diseases.
    We should all be alarmed by the dwindling access to 
treatment for chemically dependent people and people with 
mental illness. Over half the beds that were available 10 years 
ago are gone. Even more alarming, 60 percent of the adolescent 
treatment beds have disappeared in the last decade.
    Expanding access to treatment is not only the right thing 
to do, it is also the cost-effective thing to do, and I just 
want to address the cost factor that was already raised here 
today. We have all the empirical data in the world, and I would 
be glad to make these actuarial studies available to every 
single Member. We have all the scientific data to show that 
equity for mental health and addiction treatment will save 
billions of dollars a year while not raising premiums. The 
worst-case scenario, premiums would be raised, according to all 
of these studies, less than 1 percent. In the legislation, if 
it is raised 1 percent, the parity does not apply.
    Let me give you three studies: Medica, extensive study, 
found the cost for mental health parity 26 cents per member per 
month; the actuarial firm Millman and Robertson, parity will 
increase premiums less than 78 cents per month, far less than 1 
percent; the most recent study done by the New England Journal 
of Medicine, costs do not increase, and they studied not only 
the Federal employees benefit plan, but parity in a number of 
States. Costs, again, from the respected New England Journal of 
Medicine, costs do not increase with parity, but save dollars.
    Let me also site an encouraging development. The health 
plans and the insurance companies are starting to come around. 
I credit my colleague and partner in this effort, Patrick 
Kennedy. He has been the leader in arranging these field 
hearings. He has been to each and every one. I have been to 
eight or nine. He has been to 13 or 14. The CEO of Blue Cross/
Blue Shield of New England testified as to the cost-
effectiveness of parity. United Behavioral Health in New 
England testified as to the cost-effectiveness of parity. 
Health Partners of Minnesota, same thing; Medica, same thing. 
Kaiser Permanente also supports this legislation, testifying 
there is no increases in costs associated with parity.
    Let me conclude, Mr. Chairman, by saying as strongly as I 
can, it is time to end the discrimination against people who 
need treatment for mental illness and addiction. It is time to 
prohibit health insurers from placing discriminatory 
restrictions on treatment. It is time to provide the American 
people with greater access to treatment. It is time to pass 
this legislation because we must address America's number one 
public health crisis, which is clearly untreated mental illness 
and untreated chemical addiction. The American people, Mr. 
Chairman, cannot afford to wait any longer. Thank you again for 
calling this hearing. I would be more than happy to answer your 
questions.
    Chairman STARK. Thank you very much.
    [The prepared statement of Mr. Ramstad follows:]
            Prepared Statement of The Honorable Jim Ramstad,
        a Representative in Congress from the State of Minnesota
    Chairman Stark, Ranking Member Camp, thank you for holding this 
important hearing.
    As you both know, ensuring access to mental health and addiction 
treatment is more than just a public policy issue for me. On July 31, 
1981, I woke up in a jail cell in Sioux Falls, S.D. under arrest as the 
result of my last alcoholic blackout.
    I'm alive and sober today only because of the grace of God, the 
access I had to treatment and the fellowship of recovering people for 
the past 25 years. I'm living proof that treatment works and recovery 
is possible.
    But too many people don't have access to treatment. It's a national 
disgrace that 270,000 Americans were denied addiction treatment last 
year. Last year alone, 150,000 of our fellow Americans died from 
chemical addiction and 30,000 Americans committed suicide from 
depression. And it's a national crisis that untreated addiction and 
mental illness cost our economy over $550 billion last year.
    And think of the costs that can't be measured in dollars and 
cents--human suffering, broken families, shattered dreams, ruined 
careers and destroyed lives.
    It's time to end the discrimination against people suffering the 
ravages of mental illness and chemical addiction. It's time to pass the 
``Paul Wellstone Mental Health and Addiction Equity Act.'' This 
important legislation would prohibit health insurance companies from 
imposing discriminatory barriers to mental health or addiction 
treatment through limited treatment stays and higher copayments, 
deductibles or cost-sharing requirements--discriminatory barriers that 
don't exist for other diseases.
    I am absolutely alarmed by the dwindling access to treatment for 
chemically dependent people.
    Over half of the treatment beds that were available 10 years ago 
are gone. Even more alarming, 60% of the adolescent treatment beds are 
gone. We must reverse this trend.
    Expanding access to treatment is not only the right thing to do; 
it's also the cost-effective thing to do. We have all the empirical 
data, including actuarial studies, to prove that equity for mental 
health and addiction treatment will save billions of dollars nationally 
while not raising premiums more than 1 percent.
    It's well-documented that every dollar spent on treatment saves up 
to $12 in health care and criminal justice costs alone. That does not 
even take into account savings in social services, lost productivity, 
absenteeism and injuries in the workplace.
    Let me conclude by repeating as strongly as I can: It's time to end 
the discrimination against people who need treatment for mental illness 
and addiction. It's time to prohibit health insurers from placing 
discriminatory restrictions on treatment. It's time to provide greater 
access to treatment. It's time to pass the Paul Wellstone Mental Health 
and Addiction Equity Act!
    The American people cannot afford to wait any longer for Congress 
to act.

                                 

    Chairman STARK. Mr. Kennedy, would you like to proceed?

      STATEMENT OF THE HON. PATRICK J. KENNEDY, A REPRE- 
      SENTATIVE IN CONGRESS FROM THE STATE OF RHODE ISLAND

    Mr. KENNEDY. Yes. Thank you, Mr. Chairman and Ranking 
Member Camp. I think you have just witnessed why----
    Chairman STARK. I put things like that on my icebox door, 
but I am not sure that----
    Mr. KENNEDY. Well, that is a frown for why we don't have 
parity right now, and it will be a smiling face when you pass 
parity. It is a PET scan, which is an X-ray of the brain. It 
shows that we have a physical illness in mental illness, 
thereby debunking what is really the popular stigma of mental 
illness, and that is that it is a moral issue; that when people 
have a mental illness, that it is their fault; that it is a 
moral failing that it is their fault that they have an 
addiction, that they succumb to alcoholism; that is a personal 
failure of theirs.
    We now know that it is a genetic and physiological problem, 
combined with environmental factors, that leads someone to have 
these problems. As such, just like someone who has diabetes, or 
just like someone who has asthma, or just like someone who has 
cardiovascular disease, we need to treat the combination of 
someone's physiological environmental factors. But 
unfortunately in this country, we treat mental illness and 
addictions differently than we do other chronic illnesses that 
are no different from mental illnesses.
    I just want to begin by saying, I think you have just heard 
why Jim Ramstad is the heir to Paul Wellstone from Minnesota. 
He has been the champion before I came to Congress, and, as he 
has just articulated, remains the most articulate champion for 
those with addiction and alcoholism in this country, and is 
somebody that I credit personally with my own recovery in day 
to day and also as an inspiration to me in this legislative 
battle to bring parity in this country for millions of 
Americans, 26 million Americans who are discriminated against 
on a daily basis simply because they have an illness of the 
brain. That is what we are after, Mr. Chairman, this notion 
that just because the organ in the body that we are talking 
about exists between the shoulders as opposed to anywhere else 
in the body, it is discriminated against.
    We have heard hearings all over the country about how this 
discrimination takes place, but nothing is as compelling as the 
personal stories. You will hear some of them today, Mr. 
Chairman, one of them from Anna Westin, Kitty Westin and Anna 
Westin, who is her daughter, who was denied treatment and lost 
her life as a result of it. She was denied treatment and as a 
result lost her life.
    Now why is it that she was denied treatment? She was denied 
treatment because her brain illness was not regarded as fully 
reimbursable. This X-ray, insurance companies will reimburse 
for Parkinson's disease for the motor cortex, the basal ganglia 
and the sensory cortex and thalamus 100 percent. It will 
reimburse it 100 percent. But if you move just a half a 
centimeter away, insurance companies will not reimburse 100 
percent for the limbic cortex. In fact, it will only reimburse 
50 percent, maybe 40 percent for the hypothalamus, which is no 
different in physical characteristics for its physical impact 
on a disease like the disease of eating disorder that affected 
Anna or the frontal cortex or hippocampus.
    This is no way to justify denying coverage. The basic issue 
today, Mr. Chairman, is an issue of fairness, and that is why 
we are here today is to say that it is unfair for people with 
mental illness to be denied treatment. They pay for their 
health insurance like everybody else, and yet they are denied 
their health insurance coverage when they get sick. But that is 
not fair, Mr. Chairman. So, many Americans are covered when it 
comes to their health insurance when they pay their premiums, 
but if it comes to mental illness, they are denied their health 
insurance when it comes to their treatment.
    This I don't think is very American. No one is asked when 
they are born what their genetics are, what their anatomy, what 
their physiology is, just like they are not asked what their 
skin color is and what their gender is. This is just as much a 
civil rights issue as those two were, and that is why we need 
to make this the civil rights issue of our time and pass mental 
health parity.
    [The prepared statement of Mr. Kennedy follows:]
        Prepared Statement of The Honorable Patrick J. Kennedy,
      a Representative in Congress from the State of Rhode Island
    Chairman Stark, Ranking Member Camp, and my distinguished 
colleagues, thank you for inviting me to testify today, and, 
especially, for your commitment to ending insurance discrimination.
    And of course, I must single out my great friend and the strongest 
champion for Americans with mental illnesses and addictions, Jim 
Ramstad. For years he has led this fight, leaning into the stiff wind 
of his own leadership without regard for the political consequences, 
speaking up for what he knows is right. We all owe him a debt of 
gratitude, nobody more than I. Jim, it has been an honor to stand with 
you in these efforts, and a greater privilege to be your friend.
    This issue is first and foremost one of fundamental fairness. Kitty 
Westin, who you will hear from, paid her health insurance premiums just 
like everyone else. But when her daughter Anna got sick and needed her 
insurance coverage, she didn't get it. That is just not fair. And it 
cost Anna her life.
    There is no way to justify denying Anna Westin, and millions of 
others, the full benefit of the health insurance they pay for.
    In the attached exhibit, you can see the visual evidence that these 
diseases are physiological brain disorders. Some brain diseases, like 
Parkinson's, affect the motor cortex, the basal ganglia, the sensory 
cortex, and the thalamus. Other brain diseases, like depression, affect 
the limbic cortex, hypothalamus, frontal cortex, and hippocampus.
    There is no way to justify providing full coverage to treat certain 
structures of the brain, but to erect barriers to the treatment of 
other structures.
    This discrimination is not only unjustifiable, it is enormously 
costly. Representative Ramstad and I have traveled across this country 
holding informal field hearings on this subject--a dozen so far, with 
more to come.
    We've heard from chiefs of police, like Sheriff Baca in Los Angeles 
who says he runs the largest mental health provider in the United 
States: the L.A. County jail. According to the Justice Department, more 
than half of inmates in jails and prisons in this country have symptoms 
of a mental health problem. Two-thirds of arrestees test positive for 
one of five illegal drugs at the time of arrest, according to the 
National Institutes of Health. That's a cost of our insurance 
discrimination.
    We've heard from hospital presidents and emergency room doctors, 
like Dr. Victor Pincus. He said that 80% of the trauma admissions at 
Rhode Island Hospital, a level-one trauma center, were alcohol and drug 
related. Eighty percent.
    The physical health care costs go beyond the emergency room. 
Research shows, for example, that a person with depression is four 
times more likely to have a heart attack than a person with no history 
of depression. Health care use and health care costs are up to twice as 
high among diabetes and heart disease patients with comorbid 
depression, compared to those without depression, even when accounting 
for other factors such as age, gender, and other illnesses. Not 
surprisingly then, one study found that limiting employer-sponsored 
specialty behavioral health services increased the direct medical costs 
of beneficiaries who used behavioral health care services by as much as 
37%. These are costs of our insurance discrimination.
    In our field hearings, we've heard from enlightened business 
leaders and insurance executives, like Jim Purcell, the CEO of Blue 
Cross/Blue Shield of Rhode Island. This is what Mr. Purcell said about 
limits on access to mental health and addiction treatment: ``I believe 
that's bad medicine, it's bad law, and it's bad insurance.''
    Rick Calhoun, an executive in the Denver office of CB Richard 
Ellis, a Fortune 500 company, made a similar point. Mr. Calhoun said 
that the cost of treating mental illness is 50% of the cost of not 
treating it. As he said, ``This is a no-brainer. How could we not cover 
it?''
    Untreated mental health and addiction cost employers and society 
hundreds of billions of dollars in lost productivity. The World Health 
Organization has found that these diseases are far and away the most 
disabling diseases, accounting for more than a fifth of all lost days 
of productive life. Depressed workers miss 5.6 hours per week of 
productivity due to absenteeism and presenteeism, compared to 1.5 hours 
for nondepressed workers. Alcohol-related illness and premature death 
cost over $129.5 billion in lost productivity per year. These are the 
costs of our insurance discrimination.
    All of these costs are preventable, and wasteful. But none are as 
tragic as the individual costs. We heard testimony from anguished 
parents who, like Kitty Westin, had to bury their children because 
their mental illnesses and addictions went untreated.
    We heard testimony from people like Amy Smith, who said when she 
runs into people she knew 25 years ago, they're stunned she's still 
alive. She was in and out of jail and emergency rooms, unable to 
connect with other people, muttering to herself on the street, and 
unemployed. For 45 years, she says, she was a drain on society. Then 
she finally got the treatment she needed and now she's a taxpayer, 
holding down a good job.
    Amy Smith lost decades of her life because she didn't get 
treatment. If you want to know the costs of our insurance 
discrimination, Amy Smith can describe them: ``I would have been able 
to pursue my dreams for my life, which were things like driving a car, 
or holding down a real job, or getting married, or volunteering in the 
community, any of those things. . . . I think my life would have been a 
lot different if I had had those services a lot earlier.''
    So many Americans have lost their dreams, lost years, and even lost 
their lives--unnecessarily. In Palo Alto we met Kevin Hines. He is a 
gregarious, outgoing person and is engaged to be married this summer. 
In 2001 he jumped off the Golden Gate Bridge, one of very few to 
survive that fall. Thirty-thousand people succeed where Kevin 
fortunately failed and take their own lives each year. How many of them 
would, like Kevin, be starting families, contributing to their 
communities, holding jobs, and realizing their potential if only they 
had access to treatment?
    Mr. Chairman, I'm happy to provide the transcripts from the field 
hearings I have referenced to be included in the record of this 
hearing.
    We will hear arguments that even if worthwhile, equalizing benefits 
is just too costly. The truth, however, is that equalizing benefits 
between mental health and addiction care on the one hand and other 
physical illnesses on the other hand is in fact low-cost. This is not 
speculation.
    In 2001, we brought equity to mental health and addiction care in 
the Federal Employees Health Benefits Program (FEHB), which covers 9 
million lives including ours as Members of Congress. A detailed, peer-
reviewed analysis found that implementing parity did not raise mental 
health and addiction treatment costs in the FEHBP. Since our bill 
specifically references the FEHBP to define the scope of our bill, this 
analysis provides strong evidence that our legislation will similarly 
have negligible impact on costs. This finding is consistent with 
virtually every study of State parity laws as well.
    But frankly, the very fact that we need to debate how much it costs 
to end insurance discrimination is offensive. Nobody is asked to 
justify the cost-effectiveness of care for diabetes or heart disease or 
cancer. Tell Kitty Westin, or Amy Smith, or Kevin Hines, or the 
millions of others who live with these diseases that to keep health 
care costs down for everyone else, they will not have to pay with their 
lives. Why them?
    People might say that there is a component of personal 
responsibility here, especially with addiction. That's true. I'm 
working hard every day at my recovery, and it's reasonable to ask of 
me. But it's also true that we don't deny insurance coverage to people 
genetically predisposed to high cholesterol who eat fatty foods. We 
don't deny insurance coverage to diabetics who fail to control their 
blood sugar.
    At the end of the day, this is about human dignity and whether we 
deliver on the promise of equal opportunity that is at the heart of 
what it means to be American. Nobody chooses to be born with particular 
genetics and anatomy, any more than they choose to be born with a 
particular skin color or gender. And nobody should be denied 
opportunities on the basis of such immutable characteristics. Anybody 
who pays their health insurance premiums is entitled to expect their 
plan to be there when they get sick, whether the disease is in their 
heart, their kidneys, or their brain.
    Unlike any other country in the world, this one was founded on 
principles--the ideas of equality and freedom and opportunity. This 
history of America is the history of a country striving to live up to 
those self-evident truths. In pursuit of those values we've fought a 
civil war, chipped away at glass ceilings, expanded the vote, renounced 
immigration exclusion laws, and recognized that disabilities need not 
be barriers. Led by a Member of this Subcommittee, a generation of 
peaceful warriors forced America to look in a mirror and ask itself 
whether its actions matched its promise, and they changed history.
    It is time, once again, to ask that question: Are our actions 
matching our promises? And once asked, the answer is clear. Jim and I 
know, personally, the power of treatment and recovery. We are able to 
serve in Congress because we have been given the opportunity to manage 
our chronic mental health diseases. Every American deserves the same 
chance to succeed or fail on the basis of talent and industriousness. 
That's the American Dream, and it shouldn't be rationed by diagnosis.
    Thank you.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    

    PET scans of schizophrenic (l.) and healthy (r.) brains.

                                 

    Chairman STARK. Thank you. I share in the applause for both 
of you. I am only disappointed that the two of you and some of 
your colleagues have had to share so much of your own painful 
personal experiences to get the attention of our colleagues. 
This is something that, as, Jim, you have indicated, we should 
have done 10 years ago. So I hope that all the efforts that you 
have put into it, the efforts that our friend Paul Wellstone 
put into this when he first came to the Congress, that we will 
recognize that and what over 250 of our colleagues have 
recognized and move this ahead.
    I am sure that there will be some minor objections here or 
there. I hope we can compromise with them. I am going to let 
Patrick deal with his fair father to get that compromise taken 
care of, but I am sure that this is a time when we can move 
ahead and achieve what is necessary. So, I want to thank both 
of you for sharing your experiences.
    Mr. KENNEDY. Yeah. Mr. Chairman, if I could, one of the 
most compelling witnesses, we had talked about this as a cost 
in another way, and that was the lost life that they had. They 
said--Amy Smith was her name. She said, I would have been able 
to pursue my dreams for my life like driving a car, holding 
down a real job, maybe even getting married, volunteering in 
the community, those kinds of things in my life, if I had just 
been able to get treatment earlier in my life. I mean, we have 
to calculate these costs, too. You know, we talk about things 
so much in financial terms, and the financial terms are, I 
think, pretty clear-cut.
    I would caution the Members to think, too, about the 
productivity issues if they are looking at cost, because no 
business person does not take in and evaluate the productivity 
of their business in terms of calculating the bottom line, and 
depressed workers and two-thirds of those with chemical and 
substance abuse disorders are on the job working in this 
country. Their productivity rates, they are losing over 3 hours 
to 4 hours a week in productive time, whether they are not at 
work because they are late for work, or whether they are at 
work and they are not paying attention at work. Those costs are 
all calculated in these examples that Representative Ramstad is 
ready to submit in testimony.
    I would caution the Members to pay attention to those, 
because taking these costs in a vacuum does not fully evaluate 
the real cost to businesses. It also is worth noting, Mr. 
Chairman, when it looks at the health care costs, 80 percent of 
the intake in a trauma care is due to drugs and alcohol in our 
emergency rooms. Eighty percent of gunshot wounds, car 
accidents, traumas, knifings, all of those kind of cases in our 
trauma care are all drug- and alcohol-related, but they never 
get marked up as drugs and alcohol because they are never 
reimbursable for drugs and alcohol. So, they don't get marked 
up for drugs and alcohol. They get marked up as accidents for 
sutures, and so they never get written up as such.
    So, we don't get an accurate reading in this country for 
the true toll of what cases come into our emergency rooms. If 
we accurately reimbursed for what the number of cases were that 
came into our emergency rooms as a result of drugs and alcohol, 
you would see those cases properly reflected in the numbers.
    Mr. RAMSTAD. Mr. Chairman, just for the record, since your 
testimony was written, your statement was written rather, we 
have added cosponsors. There are now officially 261 cosponsors. 
Three more on my side came aboard last night, I am happy to 
report.
    Let me just talk very briefly in response to the two big 
myths that we are up against, and they are both myths eminently 
disprovable by empirical data. First is the cost of parity, and 
we have again all the empirical studies, whether it is the 
Millman and Robertson, the Medica study, the New England 
Journal of Medicine, the Rutgers study, the Minnesota study, 
the California study, I mean, I could off the top of my head 
name----
    Chairman STARK. Federal employees study.
    Mr. RAMSTAD. Exactly. Insurance companies, insurance plans 
are starting to realize that and see the same data we do. That 
is why I cited five insurance plans that are now citing parity 
legislation as being a cost saver. The second myth is that this 
is a mandate. This is not a mandate. We are not saying to any 
insurance plan that you must cover mental illness or you must 
cover chemical addiction. We are just saying if you do include 
such coverage in your policy then you can't discriminate. You 
have to treat it like you do physical diseases, that is you 
can't impose higher copayments than you do for an appendicitis 
attack or asthma or whatever higher deductibles or limited 
treatment stays. I think that is why we are getting the support 
of, as we saw at our field hearings from around the country, 
from a number of CEOs who testified. One CEO testified in Palo 
Alto, California, who now applies parity in his policy for all 
of his employees, and he put it very succinctly when he said, 
if it is good enough for Members of Congress, i.e., our Federal 
employees benefit plan, it is good enough for my employees, and 
I think that sums it up.
    Chairman STARK. If the gentleman would yield at that point. 
Mr. Kennedy had suggested in his testimony that you would make 
the transcripts from those field hearings available, and 
without objection, I would like to add those to the record of 
our hearing today. Thanks.
    [The information follows: PENDING]
    Chairman STARK. Mr. Camp?
    Mr. CAMP. Well, thank you, and thank you both for your 
testimony. I know it isn't easy to always portray these issues 
in a personal way, as you both have so effectively done. I 
certainly look forward to working with you as we move through 
the process on this. I think you have touched on a very 
important point, Mr. Ramstad, that there is no requirement that 
health plans include mental health and substance abuse 
benefits, and so we need to be very careful about how we craft 
that. So, we encourage people and plans to include these 
benefits so that we structure this in a way, and frankly, many 
of the people who go into emergency rooms don't have any 
insurance at all. So, it is not a question of how it is coded, 
it is a question of how we ensure more health coverage in 
general for more Americans, particularly working Americans.
    So, I look forward to working with both of you, and I 
appreciate your testimony very much, and all of work that you 
have done on this issue, and the numerous field hearings you 
have had all over the country. Thank you, Mr. Chairman.
    Mr. KENNEDY. If I could, the really important thing about 
this as well is stigma, and passing this legislation will do a 
great deal to ending the stigma against mental illness. This is 
a physical illness, and yet millions of Americans who already 
have health insurance don't even avail themselves of it because 
they feel so ashamed because this society has placed this 
stereotype on people who seek mental help that they are--
somehow something is wrong with them.
    So, passing it has much more of a salutary effect as just 
even treating them. It will make an enormous impact on the 
society's approach overall to health care. So, I can't 
underscore the importance of this, just in its PR value if 
anything else. So, I just do not underscore the importance of 
this for that value in itself. So I appreciate your----
    Mr. RAMSTAD. Mr. Camp, if I may, you make a very, very 
important point. This legislation we are about today, this 
parity bill only addresses those people in health plans, 
addresses the 26--well, of the 26 million people suffering from 
addiction, it is estimated that roughly 16 million have 
insurance, but it only addresses those in plans.
    We have also got to address, as Mr. Stark does in his 
legislation, the Medicare population, given the incredible 
increases in depression among seniors and the corresponding 
increase in alcoholism among seniors, untreated alcoholism. So, 
that is the second part of addressing the overall problem of 
treating mental illness and chemical dependency in America.
    The third part is the Medicaid population. The Medicaid 
population; the fourth, veterans and our troops, and we have 
seen two tragically recent terms in Minnesota and elsewhere 
around the Nation suicides from PTSD, and we are addressing 
that as well in legislation that Mr. Emanuel or--or you, I 
believe, have introduced legislation on point. Certainly Mr. 
Moran has as well.
    Then we are not dealing with addiction problems in our 
prisons and jails. You know, the sheriff of L.A. County 
testified at our hearing in Los Angeles. He testified that as 
the one in charge, in charge with the responsibility of 
supervision for the L.A. County jails, he is the overseer for 
the largest mental health institution in the world, largest 
mental health system in the world. That is how he equated being 
in charge of the jails there. Columbia University study, all 
the studies on prison populations, jail populations show that 
82 percent of the inmates in jails and prisons are there 
directly or indirectly because of addiction. So, we are not 
dealing with that as well. So, your point is well taken, Mr. 
Camp, that we need to deal with this comprehensively.
    Mr. THOMPSON. Thank you, Mr. Chairman, and thank you both 
for holding this hearing. Jim and Patrick, thank you very much 
for your interest and your passion on this very, very important 
issue. I am proud to be a coauthor of your legislation. I want 
to help you in any way to make sure that this becomes a 
reality. I just think more needs to be pointed out, and, Jim, 
you talked a lot about it in regard to the cost of not dealing 
with this both in opportunity costs. You know, our jails are 
filled with folks who should be getting medical help, not 
taking up cell time. The community costs are just outrageous 
about this.
    Patrick, I had an opportunity to cohost an event for you in 
my district, and welcomed--more than happy to do that as often 
and in as many places as I can if we can help get the word out 
on this very important issue. As far as the reconciling the 
differences that the Chairman spoke about between you and your 
dad, I just want to put a pitch in for your bill that 
recognizes the important State programs such as my State, 
California, and if there is a bill that is passed that provides 
some sort of State preemption, that is going to be very, very 
damaging. So, I think your bill is the bill, and thank you 
again for just the personal effort that you have put into this.
    Mr. KENNEDY. Thank you. Thank you.
    Chairman STARK. Are there other Members--Mr. Emanuel?
    Mr. EMANUEL. Thank you, Mr. Chairman. I also thank 
Congressman Camp for having this hearing and our two colleagues 
who are testifying on this legislation.
    As a cosponsor, I will just say when I ran for Congress in 
2002, I wrote an op-ed for the Chicago Sun Times on mental 
health parity, wrote a number of op-eds on different subjects. 
I was always shocked at how many people came up at both the El 
stops in Chicago, the grocery stores, the front stoops where I 
was campaigning and responded directly to this one. I wrote on 
health care coverage for children; wrote on tax fairness; Great 
Lakes and Lake Michigan restoration, but it was the mental 
health parity that doesn't have--and I think the cosponsorship 
of this legislation show there is no Democrats and Republicans 
on this issue. There are people, families affected.
    I would urge one thing as we look at this. When we talk 
about mental health parity on health care, we did certain 
things in the 1990s, Federal employees, the Executive Order by 
President Clinton at that time requiring companies, insurance 
companies that participated in the Federal employees system to 
offer this benefit and make sure that people have the coverage 
and no discrimination at that level.
    But I will say, as everybody knows, we may treat an 
individual who has mental health issues, but there is no doubt 
if we get them the insurance coverage, we are curing an illness 
that affects the entire family with that individual. It is 
right to focus on that individual. It is right to focus on the 
issue of productivity, but nobody can say that when a member is 
affected by any issue, depression, et cetera, that it does not 
affect the entire family and also places of employment.
    So, I thank our two colleagues for their courage in 
speaking up, and it takes a lot to do what you are doing, and 
hopefully with this change we will be allowed finally to get 
this legislation on the floor and through both Chambers. I want 
to thank you for your leadership, your coverage and most 
importantly after the years your steadfast determination to see 
this to this point that it is. Thank you very much.
    Chairman STARK. Mr. Kind?
    Mr. KIND. Thank you, Mr. Chairman. I want to thank you and 
Mr. Camp for holding this very important hearing, but I 
especially want to commend our two colleagues for linking arms 
on this vitally important issue and for traveling the country, 
as you have now for a very long time, reaching out, educating a 
whole lot of people, and elevating this issue to the level it 
needs to be at in order for us to take this up finally in this 
session of Congress. Hopefully we are going to be able to move 
it through.
    I know there has been some initial resistance within some 
in the business community, but when you take a look at some of 
the lost opportunity costs associated with mental health, from 
turnover rate, to absenteeism, to lost productivity, there is 
another important reason why we need to do this to enhance 
overall productivity in the workforce.
    But one issue--and Ron is exactly right. There is not a 
family in America that is not affected one way or the other by 
this issue whether they know it or not. But one of the concerns 
that I had, and maybe it was the many years I was serving on 
the Education Committee, was we just need to get better at 
early identification on mental health issues with our children. 
I am wondering if you could just take a moment and speak to 
that and the importance of this legislation in order to get 
that early identification there, which obviously means quicker 
and more effective treatment then and hopefully not the 
associated societal costs that may come from not detecting this 
early on.
    Mr. KENNEDY. Thank you. The real key here is the fight by 
the insurance companies that they want to wait until it becomes 
a severe illness before they cover it. Then the irony is that 
when it becomes a severe illness, then obviously it becomes 
intractable and more chronic and more costly to treat. So, they 
have a problem with covering the DSM 4, which is what we are 
covered by as Federal Employees Health Benefit Plan, because 
they say it is too broad and would allow too much leeway for a 
therapist to, you know, allow aggressive treatment.
    The irony is you want aggressive treatment, and I don't 
know a single person who voluntarily just wants to go and get 
mental health treatment for the sake of just getting mental 
health treatment to waste their time. That is the last thing I 
know of anybody who just likes to go around and overutilize the 
mental health system for the sake of overutilizing the mental 
health system. Last time I checked, that is not a problem of 
people, you know, wanting to be known for overutilizing the 
mental health system. That is the last problem we have, with 
stigma being what it is.
    The key here is you want--you want to actually go out there 
and proactively bring people in and treat them. You are 
absolutely right, you want to go out there and screen them 
preemptively. In fact, when we--we passed the autism bill this 
year about trying to preactively screen children. We can avoid 
over 50 percent of the most costly disabling aspects of autism 
in this country with prescreening of children, babies from 0 to 
2. Problem with mental health is that the babies have--part of 
their cognitive is covered by physical, and part of it is 
covered by mental health. The irony is part of it is 100 
percent reimbursement for the physical part of the brain, and 
40 percent reimbursement for the mental health part of the 
brain. You go figure it out.
    We have had these incredible testimonies where parents are 
having to try to get their health network to get 
preauthorization for therapy for their autistic child. It makes 
no sense.
    So, the point of mental health parity is to treat the whole 
person and to treat them together and not have two separate, 
you know, authorization systems. You are right, and to get in 
there early and treat them and identify them, you know, early, 
and with education--we have a 35 percent dropout rate in my 
State in all my major cities. A lot of that is because kids 
are--you know, drugs, alcohol, they come from broken homes. A 
lot of them--you know what the factors are. If a child comes 
from a home with a depressed parent, with a parent who is on 
drugs or alcohol, a parent who has been incarcerated, you know 
those children are at high risk. You ought to be able to get in 
there and cover them and get them the mental health services 
early on, and that should be a matter of public policy. It will 
save us a lot of money.
    Mr. KIND. It just seems intuitive. The better we get at 
early identification, the more effective the treatment is going 
to be, and the better we are going to be able to avoid major 
problems down the road and save a tremendous amount in the 
process. So, thank you both again for what you have been doing.
    Thank you, Mr. Chairman.
    Chairman STARK. Thank you.
    I want to thank both of you for being here. Jim, I know you 
will rejoin us here. Patrick, you are welcome to--I am sorry. 
Did you want to inquire, Mrs. Tubbs Jones?
    Ms. TUBBS JONES. I do, Mr. Chairman. Thank you very much. I 
apologize. I have been in and out.
    But to my colleagues, Mr. Ramstad and Mr. Kennedy, thank 
you so much. I stepped out, and I was talking to a friend on 
the phone, and this friend of mine from Cleveland had a 
daughter, manic-depressive, who was just in terrible condition. 
Finally one day I just went over to her house, put her in a 
police car, took her to the hospital and got her treatment, and 
I am just so proud to say that now this woman is a physician. 
She has graduated from medical school. She is married, is 
having a baby in September. So I am so excited about the kind 
of work that can happen for families when they are given what 
they need, and I just thank both of you for your leadership on 
this issue.
    Throughout my career I have been involved in all kinds of 
situations where mental health support is so important. So, I 
am 100 percent with you on parity, and I join you. Tell me what 
I can do to be helpful. I am there for you.
    Thank you, Mr. Chairman, for the opportunity.
    Mr. KENNEDY. Well, you hit the nail on the head. Most of 
our mental health dollars go to the Department of Corrections. 
That is our biggest mental health system right now. Frankly, we 
are spending oodles of money through special ed, through 
special education, through our justice system, through our 
workers comp system. You wouldn't believe the testimony we have 
heard from people coming in sick complaining of undiagnosed 
back pain or irritable bowel syndrome. It has nothing to do 
with that. We waste so many billions of dollars on tests for 
undiagnosed pain that is really psychological and depression. 
The people just want--though they don't know it, they have 
severe depression, and accentuates other things in their 
bodies. You know, as a society we ought to get with the program 
and just realize you are treating the whole person, and that is 
why it is so vital to pass this legislation.
    Ms. TUBBS JONES. Thank you.
    Chairman STARK. Mr. Becerra?
    Mr. BECERRA. Thank you, Mr. Chairman, and to our two 
colleagues and witnesses, thank you very much not for the 
testimony today, but for your championship of this issue for so 
many years.
    Most folks don't realize it, but in the city of Los Angeles 
we have a city within a city. On any given day there is some 80 
to 85,000 homeless people in the city of Los Angeles, most of 
whom could use some not just health care, but mental health 
care. We could probably address a great deal of the homeless 
issue if we were to provide a number of these folks with some 
basic mental health services. So as you go about your task, we 
are going to be able to address so many ancillary issues in 
addressing this parity issue for mental health within the 
health care system. So, thank you for championing this cause 
for so many years. Thanks for being here today. But we 
appreciate what you are doing and have done for a long time. 
So, I have no questions other than to say I very much 
appreciate what you are doing today.
    Yield back, Mr. Chairman.
    Chairman STARK. Again, I want to thank the panel.
    Mr. KENNEDY. Mr. Chairman, one last thing. In Los Angeles, 
it has been great to work with Grace Napolitano, who has been 
championing this issue with Latinas. Latinas have the highest 
suicide rate of any group in the country. As Jim said, suicide 
rate is twice the rate of homicide in this country. Over 34,000 
people kill themselves a year, and 90 percent of those are 
people with a diagnosable mental disorder, meaning you could 
prevent those suicides with treatment. That is a public health 
epidemic that we could address in this country.
    Mr. BECERRA. Patrick, when you add to the fact that within 
the teenage population, Latinas, female Latinos, are the most 
likely to commit suicide, with the fact the Latino community is 
the least likely to be insured, you have a chemistry that is 
going to explode. So, we thank you very much.
    Mr. KENNEDY. Thank you.
    Chairman STARK. Thank you both. Please join us.
    I would like to now welcome a panel that consists of Dr. 
David Shern, president and CEO of Mental Health America from 
Alexandria, Virginia; Dr. Michael Quirk, who is the director of 
Behavioral Health Service, Group Health Cooperative from 
Seattle, Washington; Ms. Kathryne Westin, who is a member of 
the Eating Disorders Coalition for Research, Policy and Action, 
who is here.
    In a moment, I would like to recognize Mr. Ramstad.
    Mr. RAMSTAD. Thank you, Chairman Stark, again. I am pleased 
to have the privilege of introducing my very good friend and 
colleague in this effort, Kitty Westin of Minnesota. Kitty 
Westin is one of the most dedicated mental health advocates in 
our Nation, certainly one of the most dedicated advocates of 
any kind I have ever worked with.
    I have had the pleasure and privilege of working closely 
with Kitty Westin to end discrimination against people with 
eating disorders and other forms of mental illness and 
addiction. As the mother of a precious child, her daughter Anna 
who died from anorexia on February 17, 2000, no one, no one 
understands better the need for a comprehensive and balanced 
approach to mental health care than Kitty Westin.
    Today Kitty is honoring the legacy of her daughter Anna 
through the Anna Westin Foundation, which she started. Kitty is 
president of the Anna Westin Foundation and also president of 
the Eating Disorders Coalition.
    Kitty, thank you so much for coming on short notice and for 
being here to testify here today.
    Chairman STARK. Thank you, Mr. Ramstad.
    Welcome to the witnesses. We will start with Dr. Shern, 
and, Doctor, please inform us in any way you are comfortable. 
Your entire written testimony will appear in the record without 
objection, and we will look forward to your summation.
    Doctor, can you do two things: Turn the microphone on and 
pull it as close as you can.
    Mr. SHERN. How is that?
    Chairman STARK. That is much better.

 STATEMENT OF DAVID L. SHERN, PH.D., PRESIDENT AND CEO, MENTAL 
              HEALTH AMERICA, ALEXANDRIA, VIRGINIA

    Mr. SHERN. Well, it is a great honor to be here and to 
participate in these historic hearings. It is great to be 
testifying to you, Representative Stark, given, you know, your 
tradition of leadership on that.
    Mr. Camp, your remarks have also indicated the severity of 
the issue and your support for good, sensible approaches.
    It is also a great honor to be testifying with Jim Ramstad 
and following Patrick Kennedy. As so many of you have noted, 
they have shown extraordinary personal courage in terms of 
their own experiences and the importance for them in their life 
of having access to equitable and effective care. In fact, they 
have done such a good job of summarizing not only their 
personal experience, but most of the relevant facts in this 
matter that they have essentially delivered my entire 
testimony, and I very much appreciate that.
    What I would like to do then is to offer sort of some 
summary remarks and perhaps pull together some themes that 
might be helpful in terms of the way we think about--think 
about this problem.
    First a word about our organization. We are Mental Health 
America. Until November 16, we were known as the National 
Mental Health Association, and we decided to change the name of 
our organization on November 16 to underline the important 
integration of health and mental health issues. We firmly 
believe that when we reflect back on this time--and I think it 
is so clearly indicated by so many of the comments this morning 
from the Committee as well as from Representatives Kennedy and 
Ramstad--when we reflect on this time, we will say that finally 
during this era, we realized, as Representative Kennedy said so 
clearly, that there is no meaningful separation between our 
mind and our body, our brain and our body, our mental and our 
physical health; that, in fact, they are one and the same.
    You know, when Surgeon General David Satcher was asked by 
Vice President Gore at the time to begin a Surgeon General's 
report on mental health, he was quite skeptical about whether 
or not the science base was really there and ready for a 
Surgeon General's report on mental health. When he concluded 
the work, not only was he no longer skeptical, but he was 
astounded at the strength of our science base.
    We now know clearly that mental health conditions are real 
illnesses, they are reliably diagnosable, and they are 
effectively treatable. It is critical, as was noted earlier by 
the Committee, that we move access up, we identify persons 
earlier and get them to receive effective treatment.
    These are the most disabling illnesses. In 2001, the World 
Health Organization estimated that 36 percent of all disability 
related to illness in the United States, Western Europe and 
Canada is directly attributable to mental health and substance 
abuse conditions, 36 percent. That far outstrips every other 
medical condition in terms of their severity.
    We have to do a better job. It is shameful that we continue 
to discriminate and frustrate access to these conditions. The 
cost data have been very adequately summarized by Mr. Ramstad 
and Kennedy. There is no longer a cost concern. The FEHB study, 
which was published in the New England Journal and that was 
mentioned earlier, clearly, clearly demonstrates that with a 
full spectrum of conditions embodied in the DSM 4 being 
eligible for care, there is no net increase in costs. Zero net 
increase in cost. This is the only study this has actually used 
a comparison group, and it is a very important distinction 
which allows for us to take a look at what is normally 
happening in terms of health care coverage. The cost arguments 
are off the table.
    Additionally, we have come to fully understand the 
importance of comorbidity, so people with cardiac disease or 
diabetes that have untreated, undiagnosed mental illnesses do 
much worse, have much higher mortality rates and greater 
expenditures.
    As everybody noted this morning, when we talk about cost, 
it is very important to think of it comprehensively in terms of 
cost to family, cost to the criminal justice system, excess 
mortality and morbidity for persons who have general health 
conditions who don't receive appropriate care.
    Ladies and gentlemen, the science is clear. The cost data 
are clear. The equity considerations are clear. There is no 
ambiguity. It is nonsense for us to not have equal access to 
behavioral health care for persons in this country. Thank you 
very much.
    Chairman STARK. Thank you.
    [The prepared statement of Mr. Shern follows:]
              Prepared Statement of David L. Shern, Ph.D.,
     President and CEO, Mental Health America, Alexandria, Virginia
    Mr. Chairman and Members of the Subcommittee:
    Mental Health America (MHA) is the country's oldest and largest 
nonprofit organization addressing all aspects of mental health and 
mental illness. In partnership with our network of 320 State and local 
Mental Health Association affiliates nationwide, MHA works to improve 
policies, understanding, and services for individuals with or at risk 
of mental illness and substance use disorders. The organization was 
established in 1909 by a young businessman who struggled with a mental 
illness and created a national citizens' group to promote mental health 
and improve conditions for those living with mental illness. Last 
November we changed our name from the National Mental Health 
Association to Mental Health America in order to communicate how 
fundamental mental health is to overall health and well-being.
    Mr. Chairman, we appreciate your longstanding commitment to 
advancing the cause of mental health equity and to modernizing mental 
health coverage under Medicare, and are very pleased to have the 
opportunity to testify today. From the vantage point of this 
organization's long history, it is almost tragic that passage of 
legislation outlawing inequitable mental health coverage should remain 
unfinished business at the door of the 110th Congress. We 
welcome your holding an early hearing on this issue, and applaud the 
legislation you are considering today.
    Whatever the prism--whether from the perspective of science, 
medicine, ethics, or economics--there is simply no foundation for 
erecting or maintaining artificial barriers to needed mental health 
care, whether under the Medicare program or employer-provided coverage, 
especially when those barriers are higher than those governing access 
to care for any other illness. Indeed, it has long been our position 
that the Federal Government should ensure, as a matter of law, that 
public and private health plans afford people access to needed 
behavioral health care on the same basis, and subject to the same terms 
and conditions, as care and treatment for any other illness, without 
regard to diagnosis, severity or cause.
    Mental health is essential to leading a healthy life and to the 
development and realization of every person's full potential. Yet 
mental illness and substance use disorders are leading causes of 
disability and premature mortality. Research has shown that depression 
is ``now the fourth-leading cause of the global disease burden and the 
leading cause of disability worldwide.'' \1\ The CDC reports that 
``mental disorders are the second leading source of disease burden in 
established market economies.'' \2\ A recent paper citing World Health 
Organization data report that there are ``450 million people who suffer 
at a certain point of a neurological, psychiatric or behaviour related 
disease, and about 25% of all the inhabitants in the world get a 
psychiatric or behavioural disorder at a certain moment in their 
life.'' \3\
---------------------------------------------------------------------------
    \1\ ``Depression a Leading Contributor to Global Burden of 
Disease.'' H. Worley. Population Reference Bureau. June 2006. As 
Retrieved on http://www.prb.org/Template.cfm?Section=PRB& template=/
ContentManagement/ContentDisplay.cfm&ContentID=13891.
    \2\ Mental Health. Guide to Community Preventive Services Website. 
Centers for Disease Control and Prevention. www.thecommunityguide.org/
mental/. Last updated: 06/14/2005.
    \3\ ``Global Mental Health.'' Kastrup, M.C., and B.R. Ramos, Danish 
Medical Bulletin. Vol. 54, No. 1, Feb. 2007, pp. 42-3.
---------------------------------------------------------------------------
    According to the landmark 1999 Surgeon General report on mental 
health, ``Mental disorders are treatable . . . there is generally not 
just one but a range of treatments of proven efficacy.'' Also, this 
report stresses the importance of combining both pharmacologic and 
psychosocial therapies for best outcome.\4\ Treatment modalities for 
mental and substance use disorders are effective at producing full or 
partial remission of symptoms. In individuals with depression, research 
has shown that approximately 80% can recover with appropriate 
diagnosis, treatment and monitoring.\5\ Yet all too often people with 
diagnosable mental disorders do not seek treatment. ``Concerns about 
the cost of care--concerns made worse by the disparity in insurance 
coverage for mental disorders in contrast to other illnesses--are among 
the foremost reasons why people do not seek needed mental health 
care,'' \6\ the Surgeon General observed.
---------------------------------------------------------------------------
    \4\ ``Mental Health: A Report of the Surgeon General,'' 1999.
    \5\ ``National Institute of Mental Health, Depression: A Treatable 
Illness,'' NIH Publication No. 03-5299. 04. http://
menanddepression.nimh.nih.gov/infopage.asp?id=15. Rockville, MD; 
National Institute of Mental Health: 2004.
    \6\ ``Surgeon General,'' p. 23.
---------------------------------------------------------------------------
    Health insurance plans have long imposed barriers that limit access 
to needed behavioral health care with far-reaching and often tragic 
results. No comparable barriers limit access to needed care for ANY 
other illness. That such discriminatory practices have continued--more 
than a decade after enactment of the Americans with Disabilities Act, 
some 40 years after the adoption of the first modern civil rights' 
laws, and nearly a century since this organization's establishment as a 
movement based on principles of social justice--attests to the deep-
rootedness of the stigma surrounding behavioral health disorders. But 
that such ongoing arbitrary discrimination should be countenanced by 
Federal law is shameful.
    The need to establish benefits-parity must be understood not simply 
in terms of equity and social justice, but in human terms. So let me 
put a human face on it and tell you briefly about Ruth, a woman with a 
more than 20-year history of battling major depression, so severe that 
she once attempted to end her life. Mental health care, covered by her 
husband's employer, a Fortune 500 company, has helped keep the illness 
in check. But she reported to us that she recently learned she had 
reached her health plan's LIFETIME outpatient mental health care limit 
of 90 visits--a limit of which she was unaware. She chillingly 
reported, ``I'm afraid I will have to discontinue at least the therapy 
which will leave me floundering in depression with suicidal 
tendencies.'' Is it conceivable that a health insurer would impose a 
lifetime-coverage bar on people with any other illness, let alone one 
that is life-threatening? In considering that question, it is important 
to note that some 30,000 Americans take their lives every year to what 
the President's New Freedom Commission on Mental Health characterized 
as a largely preventable public health problem.\7\
---------------------------------------------------------------------------
    \7\ ``Interim Report to the President,'' New Freedom Commission on 
Mental Health, p. 14, 2002.
---------------------------------------------------------------------------
    The widespread practice of providing unequal coverage for 
behavioral health and other medical care not only limits access to 
needed care, but subjects many Americans to the risk of major financial 
losses from out-of-pocket costs. At the most profound level, these 
practices reinforce the poisonous stigma underlying disparate treatment 
of ``others.'' That disparate coverage of behavioral health should be 
both routine and lawful is not only morally offensive, but--in our 
view--fosters a climate that tolerates other forms of discrimination 
and tends to weaken the fabric of equal-opportunity laws.
    Congress took a first step toward ending discriminatory insurance 
practices when it enacted the Mental Health Parity Act of 1996. The Act 
established the principle that there should be no disparity in health 
insurance between mental health and general medical benefits. By its 
terms, however, the Act provided only that employer health plans that 
cover more than 50 employees and that offer mental health benefits may 
not impose disparate annual or lifetime dollar limits on mental health 
care.
    The 1996 Act represented an important milestone, but has not 
produced fundamental changes. People with or at risk of behavioral-
health disorders still face widespread, arbitrary discrimination in 
insurance plans. As the General Accounting Office (GAO) reported in 
reviewing the Act's implementation, the vast majority of employers it 
surveyed complied with the 1996 law, but substituted new restrictions 
and limitations on mental health benefits, thereby evading the spirit 
of the law.\8\ As GAO documented, employers routinely limited mental 
health benefits more severely than medical and surgical coverage, most 
often by restricting the number of covered outpatient visits and 
hospital days, and by imposing far higher cost-sharing requirements.\9\
---------------------------------------------------------------------------
    \8\ ``Mental Health Parity Act: Despite New Federal Standards, 
Mental Health Benefits Remain Limited,'' United States General 
Accounting Office, p. 21, May 2000.
    \9\ Id. at pp. 13-14.
---------------------------------------------------------------------------
    Although subsequent efforts to enact a comprehensive Federal parity 
law have been unsuccessful, the Federal Government further advanced the 
principle of parity by requiring participating insurers under the 
Federal Employee Health Benefits program (FEHB), which covers Federal 
employees (including Members of Congress), retirees and dependents, to 
equalize behavioral-health and other health benefits for all conditions 
in the DSM IV as of January 2001.\10\
---------------------------------------------------------------------------
    \10\ Federal Employee Health Benefits Program Carrier Letter, April 
11, 2000.
---------------------------------------------------------------------------
    Most States have adopted laws requiring parity between mental 
health and general health benefits in group health insurance. But those 
State laws vary widely in scope, and, under Federal law, do not govern 
the health plans of the many employers who elect to self-insure.\11\
---------------------------------------------------------------------------
    \11\ The Employer Retirement Income Security Act of 1974 (ERISA) 
allows employers to offer uniform national health benefits by 
preempting States from regulating employer-sponsored benefit plans. 
Thus, while States can regulate health insurers, they are unable to 
regulate employee benefit plans established by employers. Federal 
parity legislation explicitly amends ERISA to ensure that self-insured 
employer health plans are subject to Federal parity requirements. (See 
H.R. 1402, 109th Congress.)
---------------------------------------------------------------------------
The Cost of Parity
    Those who oppose parity legislation often assert that it will add 
to the cost of health care. But the assumptions and models on which 
parity-opponents have relied have actually been overtaken by major 
changes in insurance practice as well as changes in clinical practice, 
and subsequent studies have obliterated the foundations for the 
assertion. Nevertheless, the myth that parity will increase costs 
retains a life of its own.
    As early as the 1950's, insurers worried that intensive long-term 
psychotherapy would drive up premiums, and began excluding or setting 
limits on mental health benefits.\12\ The RAND Health Insurance 
Experiment undertaken in the 1970's was particularly influential in 
this regard. That study, which randomly assigned families to insurance 
plans with varying deductible and co-insurance levels, provided a basis 
for inferring utilization rates based on different health insurance 
design. The study found that demand for mental health services would 
rise more than two times that for general medical care with better 
health benefits.\13\ Thus, the research showed that mental health 
services are more price elastic, and that if patients pay less, in the 
form of copays and deductibles, they will use more services, and vice-
versa. The RAND estimates were based on unmanaged fee-for-service 
indemnity arrangements. But insurance practices have changed markedly, 
with fee-for-service indemnity coverage having largely disappeared and 
with the advent of managed care techniques. In addition to the 
development of cost-control mechanisms other than benefit design, 
changes in clinical practice--to include the development of new, more 
effective psychotropic medications and short-term psychotherapy--have 
also contributed to lowering the cost of mental health care.\14\ In 
this environment, studies have repeatedly shown that the implementation 
of parity, which has consistently been accompanied by the use of 
managed care, has not resulted in significant increase in cost.\15\
---------------------------------------------------------------------------
    \12\ Barry, C.L., R.G. Frank, and T.G. McGuire. ``The Costs of 
Mental Health Parity: Still an Impediment?'' Health Affairs. Vol. 25, 
No. 3, pp. 623-634.
    \13\ W.G. Manning, et. al. ``Effects of Mental Health Insurance: 
Evidence from the Health Insurance Experiment.'' Pub. No. RAND R-3015-
NIMH/HCFA. Santa Monica, CA; 1989.
    \14\ Estimating the Costs of Parity for Mental Health, Robert Wood 
Johnson Foundation Workshop, May 2001.
    \15\ See, ``The Costs of Mental Health Parity: Still an 
Impediment?'', Barry, C.L.; Frank, R.G.; and McGuire, T.G.; Health 
Affairs, 25, no. 3 (2006), 623-634.
---------------------------------------------------------------------------
    The largest study of parity to date analyzed 4 years of data in 
evaluating the experience with mental health and substance use parity 
under the Federal Employees Health Benefits program (FEHB). The 
evaluation, commissioned by the Department of Health and Human 
Services, was undertaken by Dr. Howard Goldman of University of 
Maryland School of Medicine as the Principal Investigator, who led a 
team that included Northrup Grumman Information Technology, RAND, 
Weststat, and Harvard Medical School's Department of Health Care 
Policy. The extensive evaluation study analyzed benefits data for ALL 
FEHB plans, and studied claims data on access, utilization, and cost 
for a subset of FEHB plans that covered 3.2 million beneficiaries, and 
compared this data for nine FEHB plans (for the 2-year period prior to 
parity and the 2-year period under parity) with matched data from nine 
non-FEHB plans. The FEHB plans were selected for in-depth study on the 
basis of characteristics on which they were likely to differ--
geographic location; breadth of parity under State law, differences in 
plan types and structure, and size of the enrollee population. The 
study found that all FEHB plans complied with the parity policy; most 
plans enhanced their mental health and substance use benefits (84% 
changed the amount, scope or duration of MH benefits and 75% changed 
cost-sharing requirements); and that there was no evidence of changes 
in general medical care benefits resulting from the parity policy. 
Further, the evaluation showed that parity was implemented with some 
increase in utilization of mental health care but the increase in 
utilization was consistent with ``secular trends'' (i.e. consistent 
with the increase experienced in the matched non-FEHB plans). Of 
particular significance, while the cost of mental health care did 
increase, that increase was in line with the experience in matched 
plans that did NOT provide parity. The study concluded, therefore, that 
parity did not result in cost increases. In most plans, however, 
beneficiary out-of-pocket costs declined. In terms of a ``bottom 
line,'' this exhaustive study showed that the parity policy was 
implemented as intended with little or no significant impact on access, 
spending, or quality, while in most instances providing users of mental 
health and substance use care with improved financial protection.\16\ 
It is certainly a very powerful study, and should provide strong 
assurance that employers can equalize medical and mental health 
benefits without increasing costs.
---------------------------------------------------------------------------
    \16\ ``Behavioral Health Insurance Parity for Federal Employees,'' 
New Eng Jnl of Medicine, 354, no. 13, (March 30, 2006); 1378-1386.
---------------------------------------------------------------------------
    It is unfortunate that cost has assumed such a high profile in the 
debate over parity. Indeed the focus on parity's purported costs has 
overshadowed the more compelling reality that the real costs lie in NOT 
treating behavioral health disorders. The business community itself has 
come to recognize that those costs include excess turnover, lost 
productivity, absenteeism, and disability.\17\ And leaders in the 
business community have not only voluntarily provided mental health 
parity as part of their employee health coverage, but have endorsed the 
enactment of Federal parity legislation.\18\ But it should also be 
appreciated that as private insurance has limited mental health 
coverage through such practices as durational limits and higher cost-
sharing burdens, it has shifted risk AND cost to the public sector, 
with that burden borne at all levels of government, and with resultant 
additional pressure on programs and systems ranging from Medicaid to 
prisons, jails and juvenile justice systems.
---------------------------------------------------------------------------
    \17\ ``An Employer's Guide to Behavioral Health Services,'' 
National Business Group on Health, November 2005.
    \18\ See Hackett, J.T., CEO of Ocean Energy Inc., testimony before 
the Subcommittee on Health of the Energy and Commerce Committee, House 
of Representatives, July 23, 2002.
---------------------------------------------------------------------------
    The discrimination in health insurance against people with or at 
risk of behavioral health disorders; the lack of real protection in 
current law against such discrimination; and the loss of life, health, 
and productivity attributable to these insurance barriers make it 
critical that Congress ensure that health plans equalize medical and 
behavioral health benefit structures. Federal law subsidizes employers 
through the Federal tax code for providing health insurance to 
employees (allowing the cost of insurance as an ordinary business 
expense).\19\ It is wholly appropriate, accordingly, for Congress to 
condition entitlement to this tax benefit on employers' providing 
health benefits in a nondiscriminatory manner.
---------------------------------------------------------------------------
    \19\ See 26 U.S.C.A. sec. 162(a)(1).
---------------------------------------------------------------------------
Public Support for Parity
    A vast majority of Americans (89%) oppose insurance discrimination 
against people with mental health needs, according to a survey Mental 
Health America conducted late last year. Among its findings, the survey 
data showed that nearly all Americans (96%) think health insurance 
should include coverage of mental health care (with only 2 percent 
responding that health insurance should not cover it, and a large 
majority (74%) responding that insurance plans should cover substance 
use treatments at the same levels as treatments for general health 
issues. Significantly, the public's views on mental health and 
addiction equity is bipartisan--83% of Republicans and 92% of Democrats 
support equitable health insurance.
    Mr. Chairman, Mental Health America has seen clear evidence of 
those views in its work to help organize and mount the public forums 
initiated by the Campaign to Insure Mental Health and Addiction Equity, 
a national clarion call on the need for parity that Representatives Jim 
Ramstad and Patrick Kennedy launched early this year. In town meetings 
across the country, the Equity Campaign has powerfully documented the 
profound effects that discriminatory insurance practices have had on 
individuals and on the Nation, ranging from job loss and reduced 
productivity, to increased general health care costs and costs to 
public systems, to loss of life. 
That compelling testimony can be found on our equity website, 
www.equitycampaign. net.
    Since initiating their Campaign, Representatives Kennedy and 
Ramstad have introduced the Paul Wellstone Mental Health and Addiction 
Equity Act of 2007. That legislation, H.R. 1424, reflects the 
longstanding views of Mental Health America, and we enthusiastically 
support House passage.
Medicare
    Today, millions of older Americans and people with disabilities 
face mental illness, often without the services and supports they need. 
Some 20 percent of older Americans experience mental disorders, such as 
anxiety disorders, mood disorders (including depression and bipolar 
disorder), and schizophrenia.\20\ However, two-thirds of older adults 
living in the community who need psychiatric services do not receive 
them.\21\
---------------------------------------------------------------------------
    \20\ Administration on Aging, U.S. Department of Health and Human 
Services, Older Adults and Mental Health: Issues and Opportunities, 
2001, p. 9.
    \21\ Medicare Rights Center, Medicare Facts and Faces, October 
2001.
---------------------------------------------------------------------------
    Furthermore, individuals receiving Medicare because of a disability 
also frequently experience mental illness. Some estimates indicate that 
over 50 percent of beneficiaries whose Medicare eligibility is based on 
disability have some kind of mental disorder \22\ and according to a 
survey by the Kaiser Family Foundation, over two-thirds say they often 
feel depressed.\23\ Moreover, psychiatric disorders, such as 
schizophrenia, bipolar disorder, and depression, were the second most 
commonly reported conditions among beneficiaries with disabilities.\24\
---------------------------------------------------------------------------
    \22\ The Henry J. Kaiser Family Foundation, The Faces of Medicare: 
Medicare and the Under-65 Disabled, July 1999; National Health Policy 
Forum, George Washington University, Medicare's Mental Health Benefits, 
February 2007, p. 6.
    \23\ The Henry J. Kaiser Family Foundation, Understanding the 
Health Care Needs and Experiences of People with Disabilities: Findings 
from a 2003 Survey, December 2003, p. 4.
    \24\ Ibid.
---------------------------------------------------------------------------
    The President's New Freedom Commission on Mental Health stated in 
its final report that ``[t]he number of older adults with mental 
illnesses is expected to double to 15 million in the next 30 years . . 
. [and] [m]ental illnesses have a significant impact on the health and 
functioning of older people and are associated with increased health 
care use and higher costs.'' \25\ The Commission recommended that 
``[a]ny effort to strengthen or improve the Medicare and Medicaid 
programs should offer beneficiaries options to effectively use the most 
up-to-date [mental health] treatments and services.'' \26\
---------------------------------------------------------------------------
    \25\ New Freedom Commission on Mental Health, Achieving the 
Promise: Transforming Mental Health Care in America. Final Report, p. 
59.
    \26\ Id., p. 26.
---------------------------------------------------------------------------
    Access to treatment through the Medicare program has long been 
restricted by outdated and discriminatory policies. One of the primary 
barriers to mental health care for Medicare beneficiaries is the 50 
percent co-insurance rate imposed on outpatient mental health 
treatment, instead of the usual 20 percent co-insurance charged for 
other outpatient services.
    Mr. Chairman, we commend you for your leadership in introducing 
legislation in the past to repeal the higher co-insurance rate for 
outpatient mental health services as well as addressing other limits on 
mental health coverage in Medicare.
    Limits on outpatient care in Medicare have resulted in much higher 
utilization of expensive inpatient care among Medicare beneficiaries 
than other populations. According to an analysis by the Substance Abuse 
and Mental Health Services Administration (SAMHSA), ``Medicare 
beneficiaries are much more likely than Medicaid beneficiaries to 
receive inpatient mental health and substance abuse care, if they 
receive any mental health or substance abuse services at all'' and 
``Medicare beneficiaries are less likely than Medicaid beneficiaries to 
receive mental health and substance abuse treatment in ambulatory 
outpatient facilities.'' Moreover, when Medicare beneficiaries do 
receive inpatient care, the care is more intensive, presumably because 
these individuals have not been able to access adequate outpatient 
care. According to SAMHSA, ``Medicare annual costs per claimant for 
inpatient mental health and substance use services are higher than 
costs for Medicaid.'' \27\
---------------------------------------------------------------------------
    \27\ Letter to Representative Pete Stark from Substance Abuse and 
Mental Health Services Administrator, Charles G. Curie, U.S Department 
of Health and Human Services, including a report comparing utilization 
rates and payments for mental health and substance abuse treatment 
services provided through Medicare, Medicaid, and private insurance, 
May 22, 2002.
---------------------------------------------------------------------------
    Medicare also imposes a 190 lifetime cap on inpatient days in free-
standing psychiatric hospitals. For other illnesses and injuries, the 
inpatient hospital coverage limit is 150 days, but that limit applies 
to each period of illness, and the clock is reset each time a person is 
out of the hospital for over 60 consecutive days. The mental health 
limit is calculated on a cumulative basis over each individual's 
lifetime. This lifetime limit is most likely to affect beneficiaries 
with serious mental illnesses who often have multiple hospitalizations. 
Limiting coverage of specialty psychiatric facilities undoubtedly 
creates significant barriers to care in communities where the general 
hospitals lack psychiatric capacity.
    Improved access to outpatient services would reduce the need for 
costly inpatient psychiatric care by Medicare beneficiaries. Many 
individuals with more severe mental disorders require intensive 
outpatient care, but Medicare does not currently cover many of these 
types of services, including psychiatric rehabilitation, intensive case 
management, assertive community treatment, and residential 
detoxification services. Access to these intensive outpatient services 
would help fill gaps in the continuum of mental health care covered by 
Medicare.
    Again, Mr. Chairman, we applaud your leadership in addressing these 
shortcomings in mental health care under Medicare as well.

                                 

    Chairman STARK. Dr. Quirk, would you like to enlighten us?

STATEMENT OF MICHAEL QUIRK, PH.D., DIRECTOR, BEHAVIORAL HEALTH 
     SERVICE, GROUP HEALTH COOPERATIVE, SEATTLE, WASHINGTON

    Mr. QUIRK. Chairman Stark, Mr. Camp, thank you very much 
for the invitation to participate today. I am Mike Quirk from 
Group Health Cooperative. I am the director of Behavioral 
Health Service from Seattle, Washington. I would like to share 
with you some of Group Health's views on parity. First of all, 
Group Health is a health care system that has 560,000 residents 
from the State of Washington and northern Idaho that receive 
medical care from us. Seventy percent of that care occurs in 
our owner-operated facilities.
    Within Behavioral Health we see 30,000 new patients every 
year, which equates to a total of 200,000 patient contacts.
    Let me just comment a little bit about the nature of 
Behavioral Health. These conditions are highly prevalent. 
Twenty-five percent of us in any given year will have a 
psychiatric disorder or a chemical dependency problem. Fifty 
percent of us will have such a condition over the course of our 
lives. Most of us choose to get this care from primary care 
providers, nutritionists, family doctors, general and internal 
medicine physicians. Accordingly, we have a collaborative 
approach in that regard. Those patients that come to see us are 
the most ill. They are also the ones who prefer privacy and 
talk therapy.
    The care is effective to the extent that it is evidence-
based, which means that it is related to interventions that 
make a difference in people's lives; and the care is 
successful, meaning that you can get in.
    Let me talk a little about Group Health's view in 
relationship to parity. Group Health is the only health system 
in the State of Washington that has supported parity in our 
State legislature. We are very much aware of the concerns in 
regards to mandates, relative to flexibility, and also in 
regards to cost.
    In relationship to flexibility, our recommendation to you 
is to craft Federal parity so it is organized around medical 
management principles. We believe that will increase the 
flexibility for patients. By medical management, I mean two 
things. I am talking about medical necessity, making sure you 
are providing services to people with conditions that can 
profit from them. I am also talking about appropriate care, 
which means provide as much as is necessary to help people 
return to their previous levels of functioning. No less, no 
more.
    In support of our views, the New England Journal of 
Medicine published an article last year that reviewed the 
experience with Federal employees and parity, and essentially 
they demonstrated that, with use of medical management 
principles, good insurance was assured, and quite affordably as 
well. So, what would medical management look like at Group 
Health?
    Basically for patients with mild conditions they would come 
in to Behavioral Heath Service and we would provide counseling 
services. So, services are basically in support of helping 
people with their coping skills to deal with life adjustment.
    For people with major psychiatric disorders that are 
uncomplicated, most of those people are seen in primary care 
for medicine, in relationship to which we have a consultative 
and a collaborative role. In other words, our psychiatrists 
help them with selection of medicines and the dosing and the 
duration. Our psychotherapists help when supplementary 
counseling is necessary.
    For patients who have major complicated severe illness, 
they are seen for a prolonged course in Behavioral Heath by a 
psychiatrist and our nurses. Our goal is to work with them so 
that they are stabilized and they have good lives.
    So, essentially what does parity mean to those of us at 
Group Health? It means a great deal.
    As Americans, we all want a good run at life. If you have a 
psychiatric disorder or if you have a chemical dependency 
problem, you have obstacles in your way. With parity, many of 
those obstacles are taken away. With medical management 
principles, there is a greater likelihood of an even playing 
field with higher assurance of access, availability, good 
results, and affordability.
    So, I am from the other Washington. I don't know all the 
details in regards to the various points of view relative to 
the different types of legislation, but I think the things that 
were uniform in relationship to what I have heard consistently 
today is to support parity for the future.
    So, as I conclude, I just want to particularly thank 
Congressmen Ramstad and Kennedy for their courage and their 
leadership in regards to this important legislation, and 
Congressman Stark as well.
    I also want to acknowledge Congressmen Baird and McDermott 
for their professional and political support of this important 
legislation not only here but in the State of Washington as 
well. Thank you.
    [The prepared statement of Mr. Quirk follows:]
         Prepared Statement of Michael Quirk, Ph.D., Director,
     Behavioral Health Service, Group Health Cooperative, Seattle, 
                               Washington
    Good morning, Chairman Stark and Members of the House Ways and 
Means Subcommittee on Health. I am Mike Quirk, clinical psychologist, 
and director of the Behavioral Health Service at Group Health 
Cooperative, Puget Sound, which is based in Seattle, Washington.
    Thank you for inviting me to be here this morning, as you think 
through how to best address mental health and substance abuse parity 
through Federal legislation. Despite the difficult decisions ahead, we 
are here today to discuss how--not whether--to pass a bill on this 
important issue. And I thank you for your leadership in getting us to 
this point.
    I would like to take a few minutes to tell you about Group Health 
Cooperative's history and experience on the issue of mental health 
parity, why we support equity of mental health and medical care, and 
what we see as the essential elements of a successful parity bill. We 
see a critical role for the Federal Government on this issue, and 
believe that national mental health parity policy will work best if it 
allows carriers the flexibility to design coverage and services that 
will benefit both individual patients and whole populations of people 
with similar problems, such as depression, anxiety, schizophrenia, 
bipolar disorder, and ADHD.
    First, let me introduce you to Group Health Cooperative: Group 
Health is a nonprofit health care system that provides both coverage 
and care. We cover more than 560,000 residents of Washington State and 
northern Idaho, about 70% of whom receive care in Group Health owned-
and-operated medical facilities.
    Group Health's Behavioral Health Services provides care to patients 
with mental and chemical dependency disorders, including adults, 
adolescents, and children. We see 30,000 new patients every year, with 
a total of 200,000 patient contacts per year. We believe that the best 
way to better health is via high-quality evidence-based care. And in 
our integrated behavioral health and medical delivery systems, we 
believe that access to care is the first and one of the most important 
roads leading to quality.
    Mental health concerns are highly prevalent, affecting about one-
quarter of all adults in the U.S., with variable but often very high 
impact on health and productivity. But such disorders are also 
generally treatable, as long as patients have access to mental health 
care coverage, and to a behavioral health provider.
    At Group Health, access to appropriate, necessary care is priority 
one. We bring together our behavioral health service with our medical 
team to take care of the whole patient. For example, patients with 
depression benefit from closely integrated mental health and primary 
care services.
    In 2005, Group Health was the first coverage provider in Washington 
State to support legislation--which subsequently passed--on mental 
health parity in the large group market. Washington State now has one 
of the most progressive mental health parity laws in the country. And 
Group Health was the only health plan to support coverage in the 
individual market, which just passed our State legislature.
    Washingtonians are benefiting from the State's mental health parity 
law. But with your leadership, we can and should go one step further. 
Federal parity legislation would extend this protection nationwide, 
protect those covered by self-funded employers, and further improve 
equity of Washingtonians' access to needed mental health and substance 
abuse services.
    Parity benefits all sides of the health care system: it allows for 
flexibility in planning care, has a modest impact on cost, and reduces 
the likelihood that coming to or staying in necessary services is 
obstructed because of financial barriers to care.
    But in order to achieve its greatest possible positive impact, 
Federal mental health parity legislation must balance the requirement 
of parity with the flexibility to clarify the basis for care and the 
nature of services to fit the individual patient and for populations of 
patients with similar problems. This requires the following things:
    First, Federal legislation should allow carriers like Group Health 
the flexibility to make reasonable determinations of medical necessity 
in order to determine who will benefit from care.
    Second, Federal legislation should ensure that the clinical care 
will be appropriate and effective, and that patients have access to 
services which will reduce symptoms and return them to a reasonable 
level of functioning as quickly as possible.
    These points get to the heart of making mental health parity work. 
Research on parity for Federal employees has shown that parity of 
coverage of mental health and chemical dependency services, when 
combined with effective care management, can lead to greater fairness 
and insurance protections without significant adverse consequences for 
health care costs.\1\
---------------------------------------------------------------------------
    \1\ Goldman, HH, Frank, RG, Burnam, MA, et. al. Behavioral Health 
Insurance Parity for Federal Employees. N Engl J Med 2006; 354:1378-86.
---------------------------------------------------------------------------
    And these points support the goal that I and my colleagues at Group 
Health hold personally and professionally dear: To care for the 
greatest number of patients possible who will benefit from these 
services, in the most effective and efficient way.
    In policy terms, this means combining transparency around medical 
necessity criteria with quality improvement programs and adequate 
appeals processes, because patients should be apprised of how we make 
clinical decisions so that they can understand them and if needed 
challenge them. It means providing care and coverage for the right set 
of treatable conditions, and allowing providers to work with patients 
to find the right treatment plan. Finally, it means finding the right 
balance between ensuring access and making sure that resources are 
maximized to provide care to as many as possible of patients in need.
    In human terms at Group Health, this means working with patients 
with mild mental disorders to tailor and tune new coping mechanisms to 
adapt to challenging life events. It means integrating the mental 
health and primary medical care of patients with major but 
uncomplicated mental disorders, helping them to stay active and to 
interpret their experiences in a constructive way, while taking any 
needed medications as long as is appropriate. And it means providing 
the most challenged patients with ongoing case management assistance 
from a nurse or team of providers who can help them glue together their 
personal lives, work lives, and medical care to keep the ball rolling.
    Because really, every single one of us just needs to keep the ball 
rolling. All any of us want is a good run at a healthy life, but people 
with mental illness have set off running on a path confounded by 
obstacles. Parity allows us to remove many of the financial obstacles. 
At the same time, the flexibility to ensure that care is necessary and 
appropriate helps us steward this limited resource so that behavioral 
health services will continue to be affordable for all.
    Finally, Federal legislation should protect the progress that has 
been made in States like Washington, and should not inhibit States from 
finding new or innovative ways to bring mental health and substance 
abuse services to people who need access. Over the last 2 years, we 
have made significant improvements in access to mental health care for 
people in Washington State. I hope that Federal parity legislation will 
help us bring care to even more.
    I thank you for your attention, and for considering my 
recommendations, from the perspective of one who has provided mental 
health services for over 20 years. I hope you will think of Group 
Health as an ally and advisor as you move forward with legislation. And 
now I welcome your questions.

                                 

    Chairman STARK. Thank you.
    Thank you. I am now most pleased to have Ms. Westin 
testify. She has also, as our first panel, had serious 
tragedies in her own life, which she has turned into a crusade, 
if I may.
    We are happy to have you here to let us join with you in 
your efforts. Why don't you proceed?

 STATEMENT OF KATHRYNE L. WESTIN, M.A., L.P., EATING DISORDERS 
           COALITION FOR RESEARCH, POLICY AND ACTION

    Ms. WESTIN. Thank you, Mr. Chairman and Members of the 
Committee. It is really an honor to be here today, but it also 
feels like a huge responsibility because I realize that I am a 
voice for the millions of Americans who are suffering from 
mental illness and who are being denied care by their insurance 
companies. I just realized this morning that I am also a voice 
for the 30,000 Americans that committed suicide last year. So, 
I take this very seriously.
    I understand this better than most, because when my 
daughter needed care, she was denied treatment by our insurance 
company. My family's experience illustrates the suffering and 
the almost unspeakable consequences when insurance companies 
are allowed to discriminate against people with mental health 
issues. This discrimination is killing people and we have to 
stop it as soon as we can.
    But before I talk about parity, I really want to just spend 
a minute talking about Anna. Anna was an amazing young woman. 
She was spirited, gifted, talented. She was the most kind and 
generous person I think I have ever known. She had a future 
full of promise and possibilities until she was diagnosed with 
a serious illness.
    She was diagnosed with an illness that has the highest 
mortality rate of any psychiatric disorder, with a death rate 
of up to 20 percent. She was diagnosed with anorexia, an eating 
disorder. Anna died on February 17, 2000. She was diagnosed 
first when she was 16. It was scary for us but we had good 
insurance and access to care. She was treated in an outpatient 
setting, and I thought she had fully recovered. At that time I 
didn't know that treatment very often is a very slow process 
and oftentimes takes years. I was totally blindsided when she 
relapsed and our insurance company became an obstacle to her 
recovery.
    She relapsed in 1999 and we knew that she was really in a 
battle for her life, she was so sick. But, again, we were so 
confident that she would have access to the care she needed.
    We took her to a hospital. We had the very best insurance 
money could buy. We had a Cadillac insurance plan. We really 
believed and trusted that our insurance company would be part 
of the team that was fighting to save Anna's life. I still have 
trouble believing that insurance companies are allowed to pick 
and choose what diseases they will cover.
    We brought her to the hospital. She was diagnosed with 
anorexia. The doctors recommended immediate inpatient care 
because she was in critical condition and they told her she 
would die. Imagine our horror when they told us to take her 
home until insurance authorized that treatment.
    It is almost unbelievable. According to our insurance 
company, almost all of Anna's care was, quote, not medically 
necessary. I couldn't believe that a medical director of the 
insurance company was authorized to make decisions about Anna's 
treatment without ever examining Anna. Those decisions proved 
to be fatal.
    I still have trouble understanding how someone so sick 
could be treated so casually just because of their diagnosis. I 
have no doubt that if I had brought Anna into the hospital that 
day with the same symptoms caused by some, quote, physical 
abnormality, she would have been admitted without question. She 
would have gotten the best care available and she would have 
stayed there until she was fully recovered.
    Now, I don't blame the insurance company for Anna's death, 
anorexia killed her, but I do hold them partially responsible. 
They repeatedly denied the coverage that her doctors were 
recommending. Her treatment team warned us that without 
intensive specialized care, Anna would die.
    Imagine an insurance company denying chemotherapy to a 
cancer patient. It is almost unthinkable. The insurance 
company's statements to Anna saying that her care was not 
medically necessary only reinforced her own denial about her 
illness, which is a common thing for mental illness and eating 
disorders and, sadly and most tragically, their denials caused 
Anna to believe, because we were paying for her care, that she 
was a burden to our family and that we would be better off if 
she were dead.
    The last words she wrote in her journal were ``My life is 
worthless right now. Saying goodbye to such an unfriendly place 
can't be as hard as believing in it. Essentially my spirit has 
fled already.''
    Try to imagine what it would be like to watch your child 
struggle with a disease that ravages the body and the mind. I 
lived with Anna's hopelessness and despair, and I watched her 
slip away from me. It was heartbreaking watching her fight when 
there were roadblocks being erected along the way, all along 
the way. I knew that much of those roadblocks were driven by 
ignorance and money.
    I am confident that if this comprehensive mental health 
parity bill had been in place, Anna's chances of survival would 
be much greater and she probably would be alive today.
    Sadly, it is too late for Anna, but it is not too late for 
the millions of Americans who struggle with mental illness. The 
story you just heard isn't unique. I hear stories like this 
every single day. I hear people. They call me, they are crying 
and begging for help after their insurance company has denied 
care for their child. They spend their savings, their 
retirement, their college accounts. They borrow from everybody 
they know. They have no place else to turn. This breaks my 
heart and it is outrageous that we are still fighting this 
battle.
    After Anna died, I vowed to do everything I could to fight 
eating disorders, and I started the Anna Westin Foundation and 
I also started the Eating Disorders Coalition. We are a 
Washington-based organization that is working to increase the 
awareness and educate policymakers to the devastating effects 
of eating disorders. We worked really closely with Congressman 
Jim Ramstad and Congressman Patrick Kennedy and we applaud your 
efforts--your entire efforts--to pass the mental health parity. 
It is just such a strong piece of legislation and I urge 
everybody here to support this lifesaving legislation.
    Every day we wait, another Anna dies unnecessarily. We need 
this parity bill that includes eating disorders, substance 
abuse, and all mental illnesses. This bill will improve the 
lives of Americans with mental illness and it won't preempt 
State laws, another really important point that has been 
brought up several times today.
    This bill will give people much-needed hope, and to quote 
Congressman Ramstad, ``This is a life-and-death issue for 
millions of Americans.'' I couldn't agree with you more.
    Please support parity legislation and pass this bill. It 
will save lives and it will prevent the suffering that Anna 
faced and that her family has faced.
    Thank you.
    [The prepared statement of Ms. Westin follows:]
         Prepared Statement of Kathryne L. Westin, M.A., L.P.,
       Eating Disorders Coalition for Research, Policy and Action
    It is an honor to be here today to talk with you about the need for 
mental health parity legislation. It is also a huge responsibility 
because I am speaking for the millions of Americans who are affected by 
mental illness and who have been denied treatment by their insurance 
companies. I am the voice for people who are vulnerable and suffering 
and who are desperate for your help. I probably understand this better 
than most because my daughter Anna, who suffered from an eating 
disorder, was denied care when she needed it to save her life. I am 
here as a mother who paid the ultimate price for our country's 
unwillingness to pass parity legislation. My family's experience 
illustrates the suffering and unspeakable consequences when insurance 
companies are allowed to discriminate against people with mental 
illness. This discrimination is killing people and needs to stop now. 
Congressmen Ramstad and Kennedy's parity bill, with comprehensive 
language that includes diagnoses like eating disorders is a key step in 
saving lives.
    Before I talk about parity I want to tell you about my daughter 
Anna. Anna was a spirited, vibrant, gifted young woman. She grew up in 
a small town in MN with a family who cherished her. She had a smile 
that could melt your heart and she was one of the kindest and most 
generous people I have ever known. She had dreams, goals and a future 
full of promise and possibility until she was diagnosed with a deadly 
illness. Anna was diagnosed with a mental illness that affects over 10 
million American women and 1 million American men, a disease that has 
the highest mortality rate of ANY psychiatric illness with a death rate 
of up to 20 percent. Anna suffered from an eating disorder; anorexia. 
She died on February 17, 2000; she was just 21 years old.
    Anna was first diagnosed with anorexia when she was 16 years old. I 
admit that my husband and I actually breathed a sigh of relief when she 
was finally diagnosed because once we knew what illness she had we 
could get on with the treatment and healing. We had good insurance and 
I was confident that she would get the care she needed. I really did 
believe the worst was over; I could not have imagined what was in our 
future.
    Anna was treated in an outpatient setting when she was first 
diagnosed and she seemed to fully recover. We were optimistic that she 
was back on track and that life would return to ``normal.'' At the time 
nobody told me that recovery would most likely be gradual and could 
take years. We were totally blindsided when she relapsed and our 
insurance became the obstacle to her recovery.
    When Anna relapsed in June of 1999 we knew that she was in for the 
fight of her life; she was extremely ill. Her symptoms included heart 
abnormalities, low blood pressure, kidney failure and dizziness but we 
were confident that she would have access to the best care available. 
After all, our family had the best insurance money could buy and we 
trusted that they would join us and be part of the ``team'' fighting to 
save her. We understood that by purchasing the ``Cadillac'' of 
insurance plans our family would be covered for both minor and major 
health problems. We never dreamed that insurance would be allowed to 
decide what illnesses are covered. I cannot even begin to describe our 
reaction when we learned that our insurance company had denied Anna the 
care her doctors told us was necessary. We had brought her to a 
hospital that specialized in treating eating disorders. She met 
criteria for a diagnosis of anorexia and her doctors were recommending 
immediate inpatient care because she was in critical condition. Imagine 
our shock when we were told to take her home until the insurance 
company authorized her care. At first I thought it was a 
misunderstanding but I soon realized that it was not a mistake. 
According to our insurance company Anna's care was ``not medically 
necessary.'' Suddenly we were forced to somehow ``prove'' that Anna was 
sick enough to get the care her doctors recommended. I could hardly 
believe that the medical director of the insurance company was given 
the authority to make decisions about her care without even examining 
her; decisions that would prove fatal. To this day I have trouble 
understanding how someone so sick could be treated so casually by 
insurance only because she happened to be diagnosed with a mental 
disorder.
    I have no doubt that if I had brought Anna to the hospital that day 
with similar symptoms caused by a ``physical'' illness she would have 
been admitted without question and she would have gotten the best care 
available until she was fully recovered. Instead, Anna fought her 
eating disorder and at a time when we should have been totally focused 
on helping Anna we were forced to put energy into fighting with our 
insurance company.
    I don't blame our insurance company for Anna's death, anorexia 
killed her but I do hold them partially responsible. Our insurance 
company repeatedly denied coverage for Anna's treatment even though her 
treatment team (which included medical doctors, a psychiatrist, a 
psychologist, a dietician, and several other professionals) warned that 
intensive, specialized care was vital to save her life. Imagine an 
insurance company denying the necessary chemotherapy for a cancer 
patient. The insurance company's portrayal that treatment was not 
medically necessary encouraged Anna's own denial about the seriousness 
of her illness; a common trait of eating disorders. One of the most 
heartbreaking results of the denial was Anna's belief that, because we 
were paying for her care, she was a burden to our family and we would 
be better off if she were dead. The last words she wrote in her journal 
were: ``My life is worthless right now. Saying goodbye to such an 
unfriendly place can't be as hard as believing in it. And, essentially 
my spirit has fled already.''
    Try to imagine what it would be like to watch your child struggle 
with a disease that ravages the body and the mind. To be a witness to 
the suffering, helplessness, and excruciating pain. I lived with Anna's 
hopelessness and despair and I watched her gradually slip away from me. 
I was heartbroken watching her fight for her life confronted with 
roadblocks all along the way that were constructed by people who made 
excuses like ``there is no effective treatment for eating disorders so 
we don't pay for care.'' I knew that money and ignorance were the 
driving force behind the denials. I am confident that if this 
comprehensive mental health parity law had been in place Anna's chances 
of survival would have been greater. She would not have felt like a 
burden, she would not have been stuck in the revolving door of 
treatment that only seemed to strengthen her illness and she would have 
felt supported.
    Sadly, it is too late for Anna but it is not too late for the 
millions of Americans who suffer from eating disorders and other mental 
illnesses. The story you just heard is not unique; I talk to people 
every day who have similar experiences. I listen as parents cry and beg 
for help for their daughters and sons after insurance refuses to pay 
for care. I hear stories from families who have spent all of their 
savings, retirement, and college accounts and who have borrowed from 
family and friends and have nowhere else to turn. I know families who 
have taken out second and third mortgages on their homes to help cover 
the cost of care to save their child. It breaks my heart and makes me 
furious that we still have not passed parity and done all we can to 
insure that people get the care they need. It is an outrage that people 
who have purchased insurance and trust that they will be protected in 
the event of illness are still being denied care based on diagnosis. 
This IS discrimination!
    After Anna died I vowed to find a way to transform my grief and 
rage into something positive. Within days of Anna's death our family 
founded the Anna Westin Foundation and within months I joined the 
Eating Disorders Coalition for Research, Policy and Action; a 
Washington D.C.-based advocacy organization that has been working to 
increase awareness, educate policymakers, and promote understanding 
about the disabling and life-threatening effects of eating disorders. 
We have worked closely with Congressman Jim Ramstad and Congressman Pat 
Kennedy and we are extremely grateful to them for their tireless 
efforts to pass mental health parity. We urge you to join them in 
support of this lifesaving legislation. Every day we wait another Anna 
dies unnecessarily of an eating disorder. We need a parity bill that 
includes eating disorders, substance abuse and other mental illnesses. 
This bill will improve the lives of people with mental illnesses 
throughout the country without preempting State laws that are already 
in place.
    This is an exciting time; when I told my friends and colleagues 
that I was speaking to you today it gave them much needed HOPE. HOPE 
that the system can and will change, HOPE that their daughters and sons 
will finally have access to care and HOPE that their voices will be 
heard. In 2001, immediately following the Help Panel's approval of 
Mental Health Parity I spoke to my dear friend, the late Senator Paul 
Wellstone, and he told me how excited he was that parity was moving 
forward because it would finally end discrimination against people with 
mental illness. More recently, Congressman Jim Ramstad said: ``It's 
time to finish what we started in 1994 with our good friend and 
colleague, the late Senator Paul Wellstone, and end discrimination 
against people with addiction. This is a life-or-death issue for 
millions of Americans.'' I agree with Congressman Ramstad; this is a 
life-or-death issue for millions of Americans. I urge you to pass the 
``Paul Wellstone Mental Health and Addiction Equity Act'' this session. 
I guarantee, it WILL save lives. Thank you

                               __________

                                Appendix
    Why We Need Mental Health Parity Now: A Matter of Life or Death
    Millions of Americans suffer from eating disorders, known as 
anorexia nervosa, bulimia nervosa, binge eating disorder, and eating 
disorders not otherwise specified. Eating disorders are illnesses with 
a biological basis modified and influenced by emotional and cultural 
factors. The stigma associated with eating disorders has long kept 
individuals suffering in silence, inhibited funding for crucial 
research and created barriers to treatment. Without proper insurance 
coverage for treatment someone with a serious eating disorder is at 
risk for premature death.

    High prevalence rate. An estimated 8 million Americans suffer from 
eating disorders. Eating disorders cut across race, color, gender and 
socioeconomic categories. No one is immune.

    On the rise and affecting children. The incidence of eating 
disorders has doubled since the 1960s and is increasing in younger age 
groups, in children as young as seven. Chronic dieting is a primary 
risk factor and girls at five years old are already concerned about 
their weight and diet. Eating disorders are not simply a passing phase 
but serious mental illnesses that need proper treatment and attention.

    Impact on health. Eating disorders are commonly associated with 
substantial psychological problems, including depression, substance 
abuse, and all too frequently with suicide. They also can lead to major 
medical complications, including cardiac arrhythmia, cognitive 
impairment, osteoporosis, infertility, and most seriously, death.

    High death rate. Anorexia nervosa has the highest mortality rate of 
all psychiatric disorders. A young woman with anorexia is 12 times more 
likely to die than other women her age without anorexia.

    Treatment can work. Research shows that eating disorders can be 
successfully overcome with adequate and appropriate treatment. Such 
treatments are typically extensive and long-term.

    Health insurance companies contribute to high death rate. Insurance 
companies routinely limit the number of days they will reimburse, which 
force doctors to discharge patients with eating disorders too early. 
Although patients with eating disorders often require more than 6 weeks 
of inpatient therapy for proper recovery, insurance companies typically 
offer an average of 10-15 days a year. Patients are suffering relapses 
and are placed in life-threatening situations as a consequence of such 
managed care coverage limits.

    Congress can save lives by passing mental health parity this 
session. Time has run out. Our daughters, sisters, brothers, mothers, 
and friends are dying from eating disorder-related causes. Congress 
cannot afford to wait another day to pass legislation that provides 
people with eating disorders better access to care.

    REQUEST: Pass the Paul Wellstone Mental Health and Addiction Equity 
Act of 2007.

Facts About Eating Disorders
How Common Are Eating Disorders?
    Results from the first nationally representative study of eating 
disorders in the United States were published in the Biological 
Psychiatry, February 2007. The National Comorbidity Survey Replication 
(NCS-R) is a nationally representative survey of the U.S. population 
that was administered face-to-face to a sample of 9,282 English-
speaking adults ages 18 and older between February 2001 and December 
2003.
    A highlight of the results:

      Lifetime prevalence of individual eating disorders is 
0.6-4.5%.
      Lifetime prevalence of anorexia nervosa is .9% in women, 
.3% in men.
      Lifetime prevalence of bulimia nervosa is 1.5% in women, 
.5% in men.
      Lifetime prevalence of binge eating disorder is 3.5% in 
women, 2.0% in men.
      Eating disorders impair the sufferer's home, work, 
personal, and social life.
      Binge eating is more common than anorexia or bulimia and 
is commonly associated with severe obesity.
      Eating disorders display substantial comorbidity with 
other mental health disorders.
      While eating disorders often coexist with other mental 
health disorders, they often go undiagnosed and untreated. A low number 
of sufferers obtain treatment for the eating disorder.

Other Facts About Eating Disorders
      Doubled since 1960s.
      Increasing in younger age groups, as young as 7 years.
      Occurring increasingly in diverse ethnic and 
sociocultural groups.
      40-60% of high school girls diet.
      13% of high school girls purge.
      30-40% of junior high girls worry about weight.
      40% of 9-year-old girls have dieted.
      5-year-old girls are concerned about diet.

Source: Journal of the American Academy of Child and Adolescent 
Psychiatry.

Revolving Door
    Research shows that discharging patients prematurely (i.e., reached 
90% of expected body weight) doubles the likelihood of relapse. 
According to data from the Renfrew Center, patients in this residential 
facility had an average length of stay of 50 days prior to the 
proliferation of managed care contracts. Today, the average length of 
stay has dropped to 15 days. A consequence to the shorter periods of 
treatment is that more people are relapsing. Prior to managed care, the 
return rate was under 10%. Today, it is 33%. This revolving door is a 
long-term cost on society. The person may end up on disability, unable 
to work, or otherwise able to contribute. Perpetuating the cycle of 
illness affects not only the patient and her family, but over time, the 
same insurance company--or companies--that restricted her treatment in 
the first place.

Mortality
    Anorexia nervosa has the highest mortality rate of any psychiatric 
disorder, as high as 20%. Risk of death among individuals with anorexia 
is 12 times greater than their same age peers without anorexia. Death 
can occur after severe bingeing in bulimia nervosa as well. Health 
consequences such as osteoporosis (brittle bones), gastrointestinal 
complications and dental problems are significant health and financial 
burdens throughout life.

Treatment Can Work
    With early detection and intervention.
    Treatment must be as complex as the illness including attention to 
the following:

        Nutritional
        Medical
        Psychiatric
        Psychotherapy with patient, family

    Rates of Recovery

        \1/3\ recover after initial episode
        \1/3\ fluctuate with recovery and relapse
        \1/3\ suffer chronic deterioration

    If patients do not receive adequate treatment then multiple re-
hospitalizations are common.

Health Consequences of Eating Disorders
    Anorexia Nervosa
                                            Bulimia Nervosa

        Heart Muscle Shrinkage
                                                Electrolyte 
imbalance, heart
        Slow and Irregular Heart Beats
                                                 arrhythmia, heart 
failure
        Heart Failure
                                                Teeth erosion 
and cavities
        Amenorrhea
                                                Irritation and 
tears in the throat,
        Kidney Stones and Kidney Failure
                                                 esophagus and stomach
        Lanugo (Development of Excessive
                                                Laxative 
dependence
         Fine Body Hair on Face, Arms and
                                                Emetic Toxicity
         Legs)
                                                Death
        Muscle Atrophy
        Delayed Gastric Emptying, Bowel
         Irritation
        Constipation
        Osteoporosis

                                 

    Chairman STARK. Thank you very much, Ms. Westin. I 
appreciate your efforts and your taking the time to share with 
us both your personal tragedy and your efforts to help us and 
help the entire community improve the situation so that we 
won't have more Annas in the world.
    Doctor Shern, you described the Act of 96 as a first step. 
Was there an effort to evade the spirit of that law and do we 
still need some corrections in the 96 parity law that provide 
full coverage?
    Mr. SHERN. The 96 parity law was monumental in terms of its 
importance and the bravery that was represented by Senators 
Domenici, Wellstone and others, Alan Simpson and others, in 
getting that passed.
    However, it didn't get us as far as we needed to go. As you 
may be aware, Mr. Chairman, the GAO took a look at it, 
systematically evaluated the impacts of the 96 legislation, and 
determined that it didn't go far enough, and in fact, that 
other management techniques were used to essentially frustrate 
many of the most important intentions of that bill.
    That is why it is so important that we continue to push, 
and pass the parity bill in the House and its companion bill in 
the Senate.
    Chairman STARK. Thank you.
    Dr. Quirk, you are a staff model plan?
    Mr. QUIRK. Staff model and network, yes.
    Chairman STARK. Can you give me some sense--you provide 
both group plans and individual plans; is that correct?
    Mr. QUIRK. That is correct.
    Chairman STARK. Under Washington law they have to have 
parity in----
    Mr. QUIRK. So, in 2005, parity was passed for the large-
group commercial market, and as of last week there is parity 
passed in relationship to small group.
    Chairman STARK. Now, did you always have parity as a matter 
of practice in your plan, or did you change and have parity 
once the law was passed?
    Mr. QUIRK. Once the law was passed.
    Chairman STARK. Then you have seen, probably, the 
individual markets too soon to tell, but what could you tell us 
about any differences in costs to your plan after the 2005 law 
came in?
    Mr. QUIRK. 2005 law is a staggered implementation, so 2006 
was equity in cost share; 2008 will be equity in stock loss; 
and 2010 will be equity in relationship to days and visits.
    So, the cost changes with the cost share in 2006 were 
small. Essentially what it means is that you would pay the same 
cost share on the medical side as you would on the chemical 
dependency--or, excuse me, on the mental health side. So, of 
course, there is a little more cost involved in that, but not a 
great deal; and there has been a little uptick in the way of 
utilization to--in terms of people coming in.
    Chairman STARK. When you say you have a copayment for all 
of your visits, both acute care and mental illness?
    Mr. QUIRK. Yes.
    Chairman STARK. Is it small, or can you tell us the 
difference prior to the----
    Mr. QUIRK. So, prior to the cost-share equity, the cost 
share was like $20. On the average it would go to $10 with 
equity.
    In relationship to inpatient it was 80 percent covered, and 
it went to like $300 payment per day.
    Chairman STARK. So now what do you anticipate your costs 
will do in the outyears as you complete the parity program?
    Mr. QUIRK. I believe it will be consistent with what we 
heard earlier today from Congressmen Ramstad and Kennedy, and 
that is consistent with what the actuarial folks have been 
telling us. That is for any of our plans that have historically 
had relatively good--although not parity benefits--and had a 
managed medical management practice in place, the transition to 
full parity will not be terribly expensive. It will probably be 
1 percent or less. I am anticipating that for us as well.
    Chairman STARK. Thank you. Mr. Camp.
    Mr. CAMP. Thank you very much, Mr. Chairman.
    Dr. Quirk, just following up on Mr. Stark's questioning, 
you referenced the medical management approach in your plan. Do 
you believe that coverage for mental health and substance abuse 
should be based on a treatment plan? If so, should health plans 
be given the flexibility to use medical management approaches 
to make sure the plan is established by the provider and 
followed by the patient?
    Mr. QUIRK. I believe so. I have been in Group Health for 23 
years. I have been the director for 18 years.
    I had the early experience of not having these management 
principles in place and essentially had access problems and had 
financial problems. So, with the medical management system in 
place these days, the majority of the patients get seen within 
2 weeks' period of time. We have standards in terms of 
availability both in network and in staff model. We do patient 
satisfaction studies and upward of 80 percent of the people who 
come and receive care from us are very satisfied. They would 
let us know otherwise if medical management principles were 
somehow contrary to their wishes. We have few complaints.
    When you look at quality of care indicators like the HEDIS 
post-hospitalization followup measure, Group Health ranks 
within the top 10 percent of health plans that participate 
through NCQA in the country, some 250.
    So, yes, I think that having an orderly, thoughtful process 
works in the patient's interests, and we hear very little to 
the contrary from the patients.
    Mr. CAMP. Thank you.
    The House bill--I don't know if you are familiar with the 
legislation before the Congress--requires the employer's plan 
to cover the same range of mental illnesses as covered by the 
Federal Employee Benefit Plan, which uses what is known as the 
diagnostic and statistical mental disorders known as DSM-IV. 
The Senate bill, in contrast, does not have that same 
requirement.
    There are some conditions in that list as you look at it 
that really don't seem biologically based or appropriate for 
medical treatment, frankly, such as sibling relational problems 
and nightmare disorder, jet lag, other lists.
    Do you have the definition in your plan of DSM-IV in 
Washington State and if so, could you comment on the impact 
mandatory coverage of some of those types of conditions might 
have on the health plan, the cost of insurance and the 
employer's ability to continue that coverage?
    Mr. QUIRK. Sir, in my mind the DSM question is basically a 
practical one in regards to who needs care that can get care 
and is satisfied with what they received and who, if anyone, is 
going to be excluded in the process.
    So, at the level of the conditions that you spoke of, Mr. 
Camp, relative to life transition-type problems that aren't 
psychiatric disorders, when we have people call us on the phone 
and ask us to receive care in regards to those conditions, what 
we ordinarily do is make social services available at their own 
expense in the community. Most people are happy with that.
    There is a small number that feel insistent that they have 
a psychiatric disorder. For those we bring them in and we do 
one session and we provide consultation to them.
    Now, there are certain conditions that are more severe and 
chronic that are in the DSM that typically do not include 
people coming and asking for services from us.
    Mental retardation is in the DSM, learning language 
disabilities is in the DSM, anti-social personality disorders 
is in the DSM, and by and large those people don't have 
conditions that are treatable from a health care point of view. 
They do not come to us.
    So, the DSM issue to me is more a theoretical issue than it 
is an issue of major complication. Does that get to your 
question?
    Mr. CAMP. Well, it does, and it sounds as though some of 
the medical management techniques that you referred to in your 
testimony you use as prospective patients come to you, and that 
those help determine that.
    What is the standard for covered conditions in your plan?
    Mr. QUIRK. We provide services to people who have 
psychiatric disorders from the medical necessity point of view 
that are treatable, people who by and large have had 
destabilizing experiences in relationship to which either 
counseling or medicine can make a difference in terms of 
returning them to their previous level of function.
    Mr. CAMP. So, you allow the plan--at least your plan 
defines those disorders. The State has not defined those 
disorders for you, which is in contrast to the legislation we 
are considering today where the Federal Government would define 
the various covered----
    Mr. QUIRK. Yes.
    Mr. CAMP. Thank you very much. Thank you all for your 
testimony. I certainly appreciate it.
    Thank you, Mr. Chairman. I see my time has expired.
    Chairman STARK. Dr. McDermott.
    Mr. MCDERMOTT. Thank you, Mr. Chairman, for having this 
hearing and for giving me an opportunity to participate.
    I want to talk with Dr. Quirk a little bit further about 
the Group Health model, because I think it says something about 
why you need a universal system that manages people's problems 
in the most efficient way. Group Health was started by the 
people, basically, and they basically still run it.
    Now, on mental health care, can someone refer themself to 
your unit without passing through a general practitioner?
    Mr. QUIRK. That is correct.
    Mr. MCDERMOTT. They can come directly to you?
    Mr. QUIRK. Absolutely. It is a self-referral system. It 
always has been. I trust it always will be.
    Mr. MCDERMOTT. Then what percentage of your referrals are 
self-referrals, people feel they have a mental health need, 
rather than those sent over by internists or by general 
practitioners in the rest of the system? How does it split out?
    Mr. QUIRK. We see about 7 percent of the enrolled 
population in a given year. Because we have this long history 
of being a self-referral system and an integrated system with 
the medical group, often formal referrals do not occur. So, if 
there were inquiries of patients in regards to whether your 
doctor encouraged you to come, my guess--and it is simply 
that--would be that half of the folks just self-initiate and 
probably half are encouraged by their personal physicians 
coming for care.
    Mr. MCDERMOTT. One of the fears, always, of insurance 
companies and others in this whole area is, well, it would be a 
lot of people coming and wasting your time and wasting your 
ability. How many of those self-referrals do you find the 
system ultimately says there is nothing wrong with you, you can 
go away, or you should go away, or whatever? How often do you 
find people who are going in because they want to talk to 
somebody about things that perhaps could be handled in some 
other way?
    Mr. QUIRK. It is rare that that occurs. As I was explaining 
to Congressman Camp, when we have the initial contact through 
our entering group, which includes a cadre of mass prepared 
people who take the calls on the phone, there is a brief 
interview that occurs there. In the context of that discussion, 
if it appears to be a life transition problem rather than a 
psychiatric problem, we make the social services available in 
the community. If it appears to be ambiguous, we bring those 
folks in. By and large they are very happy with one visit, and 
life goes on. So, the myth that mental health is basically a 
place where people come in to develop friendships or get social 
support is simply that. That is not our experience.
    Most people come in, they have real issues in their lives, 
real conditions. They want to remedy them as quickly as 
possible and get back into their lives.
    Mr. MCDERMOTT. You said--I think I caught 30,000 visits a 
year out of your 500,000 patients?
    Mr. QUIRK. We see 30,000 new patients each year in 
relationship to which there are 200,000 patient contacts.
    Mr. MCDERMOTT. How many actual inpatient beds do you have 
to maintain, or do you refer them out to another setting?
    Mr. QUIRK. We purchase all of the psychiatric inpatient 
services from the community. We do have an inpatient chemical 
dependency program that is in Bellevue. We also purchase those 
services from the community as well.
    Mr. MCDERMOTT. The purchasing is from the university 
hospital or from community hospitals or psychiatric facility?
    Mr. QUIRK. All of the above.
    Mr. MCDERMOTT. All of the above.
    Mr. QUIRK. Yes.
    Mr. MCDERMOTT. How many beds do you purchase a year? If you 
have a bed, do you have five beds filled continuously during 
the year or three beds?
    Mr. QUIRK. As you are well aware, Group Health is spread 
out geographically across a landscape that is not sort of 
consistent in terms of the volume of people. As a result, we 
buy services from everywhere, from Spokane to Bellingham to 
Riverton to Seattle, Bellevue, et cetera, and we have good 
contractual understandings with those local hospitals, so that 
in our regular back-and-forth with them through the hospital 
liaison nurses, we have regular and consistent availability of 
services.
    We have a concentration of services offered through the 
overlay facility in the Bellevue area, as you are well aware, 
part of our heaviest population area. But we don't essentially 
purchase beds in terms of holding them over the course of time.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Ms. WESTIN. Mr. Chairman, could I say something?
    Chairman STARK. Certainly.
    Ms. WESTIN. In followup with that, one of the issues of the 
availability of services and having that readily available, the 
importance of that is very often somebody coming in with a 
mental health disorder--certainly eating disorders--is that you 
have this little window of opportunity that that person's 
defenses are down, their denial is down, and they are ready to 
go into the hospital or they are ready to get the help they 
need. If there is a delay in that--even by a few hours, 
certainly a couple of days, while insurance is taking a look at 
and authorizing that care--you can actually miss that window, 
and that person may then refuse to go in.
    That is exactly what happened with our daughter when they 
told us to take her home. I flatly refused because I knew if I 
missed that window that day, I probably would not get her back 
the next day. So, we have to have those beds available. We have 
to have that access to care.
    The other piece that I really would like to comment on, as 
we have been talking about, there is the cost of care and the 
cost of care up front to behavioral health and to, you know, 
the American public, which has proven to be minimal from all 
the studies. The cost of not treating these illnesses is huge, 
and not only in lost lives, because we certainly understand 
that, but the long-term physical health effects of especially 
eating disorders, which include serious physical consequences, 
osteoporosis, infertility, electrolyte imbalance, cardiac, 
those kinds of things.
    So, if we look at the overall cost of care, we really see 
why it is so important to treat these illnesses very quickly, 
very aggressively, and as soon as we can do it, because overall 
the cost will be much, much less. Thank you.
    Chairman STARK. Thank you.
    Mr. Ramstad.
    Mr. RAMSTAD. Thank you, Mr. Chairman.
    Dr. Quirk, I just want to thank you for your support for 
the parity legislation before us. I omitted your health plan--I 
will never do it again--from the list of health plans I 
enumerated who are supporting this legislation. I am sorry. 
That is because I missed the Vancouver field hearing, one of 
the few that I missed. But thank you for being one of the 
enlightened health plans, willing to speak out in favor of fair 
and equitable coverage for medical care.
    I want to follow up on the line of questioning from Mr. 
Camp and point out that our bill does not prohibit medical 
management. It just says you have to do it, the management, the 
same way as for medical or surgical.
    I was wondering if you could just enumerate the 
requirements a patient would have to meet in order to be deemed 
as medically necessary to receive inpatient substance abuse 
treatment under an average Group Health policy.
    Mr. QUIRK. Sir, in the State of Washington we have a 
statutory requirement in regards to making certain amounts of 
moneys available every 2 years for chemical dependency 
services.
    We have a system within Group Health that is both a primary 
care and a behavioral health system. So, as much as possible--
and we have a long ways to go, I believe--we attempt to pick up 
in regards to people's chemical dependency patterns within the 
primary care approach. If indeed they are severe, referred for 
chemical dependency specialty, and to the extent that they 
result in significant impact in regards to overall health, 
their ability to function in life, we send them for inpatient 
detox. That is why we put together this chemical dependency 
inpatient program in our Bellevue campus. So, it is basically 
for people who have very severe conditions.
    Mr. RAMSTAD. I thank you again for being here today and for 
testifying at the field hearing and for your enlightened 
approach to this incredible public health problem, which I deem 
America's number one epidemic, and appreciate enlightened plans 
like yours, as I said before.
    Kitty, I want to ask you a question. Again, you have been 
there. Thank you for being there since Day One when you worked 
with Senator Wellstone, before I was even involved. I want to 
thank you again for your work with the Anna Westin Foundation 
and the Eating Disorders Coalition. You have helped countless 
people suffering from the deadly disease of eating disorders.
    Let me ask you this. In treating as many people as you 
have, in your experience how would you compare the efficacy of 
treatment for eating disorders with that of chronic conditions 
like asthma, hypertension or diabetes? The studies all show 
that the relapse rates are about equivalent.
    Is that corroborated by your own personal experience at the 
Anna Westin Foundation?
    Ms. WESTIN. Yes, that is correct. To answer your question, 
treatment does work. I think that is really important for 
people to understand and to know. The sooner somebody gets in 
for treatment and the more aggressive that treatment is, the 
more effective it will be.
    What we do know is that a person that comes in for 
treatment and leaves prematurely will have a much higher chance 
of relapse. The continually revolving door I was speaking 
about, where someone is admitted and then discharged, is not 
the right body weight, and then readmitted, it serves to only 
strengthen the illness, which I think is pretty typical of a 
lot of illnesses.
    When somebody is allowed to stay in the hospital a long 
enough time to restore themselves to ideal body weight, get 
their brain functioning again, be able to utilize the therapies 
and other approaches to care, they have a very, very good 
chance of total full recovery.
    So we really advocate for long-enough lengths of stay. 
Those percentage, those number of days, have dropped 
significantly in the last few years. I think originally, for a 
long time, the lengths of stay were a month or longer, and now 
they are down to just a matter of days.
    Or, in Anna's case, that first time she was given 3 days in 
the hospital.
    Mr. RAMSTAD. The average treatment stay, I know, for people 
who are chemically dependent, now in plans it is 7 days. Ask 
any chemical dependency professional, ask any doctor or other 
professional, and they will tell you that no one can get on the 
road to recovery, nobody can receive effective treatment--
right, Dr. Shern--in 7 days. That is what we are allowing to 
happen in this discrimination toward people with mental 
illness, eating disorders, and other forms of mental illness as 
well as chemical addiction.
    Thank you again to all three of you. Thank you, Mr. 
Chairman.
    Chairman STARK. I want to thank the panel for their 
assistance and their testimony. Appreciate your taking the time 
to do it. We will recess for about a minute while we excuse 
this panel and give the next panel a chance to join us.
    [Recess.]
    Chairman STARK. If our guests will take their seats, we 
will resume. Our third panel consists of three experts in the 
field of mental health substance abuse. Dr. Eric Goplerud--did 
I pronounce that correctly, Doctor--is the director of Ensuring 
Solutions to Alcohol Problems at George Washington University. 
Dr. Manderscheid, who is the director of Mental Health and 
Substance Use Programs at the Constella Group in Baltimore. 
Both of you two have been with SAMHSA previously, your 
experience there. Dr. Henry Harbin of Baltimore, Maryland. Dr. 
Harbin is in private practice; is that correct? More or less.
    Welcome to the Subcommittee, gentlemen, and as you know we 
try to divide our panel into two bills, or two areas, the first 
dealing with the private insurance market, and with this panel 
we would like to look at the question of parity in the Medicare 
system.
    I would presume to some extent it might fall into the 
Medicaid system, but we just don't have jurisdiction over that, 
which is why we don't offer mention here.
    Would you like to proceed, Dr. Goplerud, in any manner you 
are comfortable to enlighten us. Remember to turn on your mike 
and get as close to it as you can.

STATEMENT OF ERIC GOPLERUD, PH.D., DIRECTOR, ENSURING SOLUTIONS 
       TO ALCOHOL PROBLEMS, GEORGE WASHINGTON UNIVERSITY

    Mr. GOPLERUD. Chairman Stark, Congressman Camp, 
distinguished Subcommittee Members, my name is Eric Goplerud 
and I am a professor of mental health and substance use policy 
at George Washington University Medical Center.
    Previously I served as associate administrator for policy 
and planning at the Substance Abuse Mental Health Services 
Administration.
    Thank you for the opportunity to participate in this 
important discussion of Medicare parity. The proposed Medicare 
Mental Health Modernization Act, H.R. 1663, would resolve 
crucial problems caused by the existing Medicare benefit, 
especially the much higher copayment requirements for 
outpatient treatment of mental and substance use conditions and 
the absence of coverage for cost-effective residential and 
intensive outpatient treatments.
    In my remarks today I will highlight four points:
    Parity in Medicare is the right thing to do.
    Parity will fix discontinuity problems caused by the 
current benefit.
    Parity will lead to healthier seniors.
    The benefits of parity outweigh the slight increase in 
initial costs.
    In addition, I will address parity for treatment of alcohol 
and other drug-use disorders.
    In 1965 when Medicare was established, its benefit closely 
mirrored the typical commercial health insurance product at the 
time. Most mental health insurance restricted mental health 
benefits because diagnoses were viewed as subjective, 
treatments were questionable, and outcomes difficult to 
measure.
    Medicare followed conventional wisdom. The result, 42 years 
later, Medicare still requires 50 percent copayments for 
outpatient treatment of mental and substance use conditions, 
but only 20 percent for other illnesses. Medicare limits 
lifetime inpatient days for psychiatric hospitals, but has has 
no limits for other illnesses. An inequitable benefit may have 
been right more than 40 years ago, but advances in diagnosis 
and treatment of mental health illness and addiction and 
studies in cost and benefits of parity require us to reevaluate 
old assumptions.
    In 1999 I led a team in HHS that negotiated with the Office 
of Personnel Management for full and comprehensive parity for 9 
million beneficiaries in the Federal Employees Health Benefits 
Plan program. We now have 6 years' experience with FEHBP parity 
and a high-quality evaluation of the program.
    Equitable coverage improves access without substantially 
increasing costs.
    Forty-two States now mandate coverage for treatment of 
mental and substance use conditions. Most are more equitable 
than the Medicare benefit. Dr. Shern's organization, Mental 
Health America, released a poll in November 2006 that found 19 
out of 20 Americans support coverage of parity, and this 
support is bipartisan.
    A 2004 poll found that 76 percent of probable voters are 
more likely to vote for candidates supporting parity for 
substance abuse treatment.
    In a moment, Dr. Manderscheid will discuss his research on 
how Medicare benefits contribute to the overutilization of 
emergency and inpatient services and create barriers to 
integrated care.
    I want to point to indicators as problems with continuity 
of care that Dr. Manderscheid will not address. Quality 
measures reported by the health plans to the National Committee 
for Quality Assurance, NCQA, showed this problem. People with 
mental illnesses and substance use disorders that are so severe 
that they require inpatient treatment need to be immediately 
linked to outpatient treatment when discharged.
    For commercially insured patients, 56 percent of seriously 
ill patients discharged from the hospital get into outpatient 
care within 7 days.
    For Medicare patients, only 39 percent are seen within 7 
days. Medicare financial barriers probably account for this 
almost 20 percent quality gap.
    From every authoritative source, a consistent message is 
heard supporting integrated care. In my written testimony, I 
listed 33 authoritative research-based clinical practice 
standards from professional medical societies in the United 
States, independent quality assurance organizations, and 
guidelines from the Veterans Administration and Department of 
Defense that direct clinicians to provide integrated health and 
behavioral health care for older Americans. The clinical 
practice guidelines for all of the big disabling conditions 
affecting seniors and disabled Medicare beneficiaries--heart 
disease, diabetes, cancer, cardiovascular disease, COPD, 
chronic pain, stroke, depression, Alzheimer's--all call for 
clinicians to screen for depression, anxiety, and alcohol use 
and to actively manage these occurring conditions.
    The impact of parity is clear. Access improves, while 
service costs barely increase.
    In 2002 MedPac recommended eliminating the outpatient 
copayment disparities for Medicare and estimated that this 
would increase costs by $500 million a year. This increase of 2 
cents for every $10 in premium is justified, according to 
MedPac, by improved access to treatment and simplify applied 
cost sharing.
    Before I conclude, I would like to briefly discuss the 
integration of alcohol and drug use treatment under parity. 
Alcohol use disorders are predominant substance abuse 
conditions affecting Americans no matter what age or income 
level.
    The chart in my written testimony shows that alcohol use 
disorders share all the characteristics of other chronic 
illnesses, except one. Health insurance coverage is not 
equitable.
    G.W. recently analyzed the 11 State legislature-mandated 
studies of substance use parity. The studies reached a 
unanimous conclusion. The cost to employers is negligible. 
Substance use treatment parity increases costs annually by 0.2 
percent per year.
    In conclusion, I would like to thank the Committee for the 
opportunity to address this important issue and look forward to 
answering questions. Thank you.
    [The prepared statement of Dr. Goplerud follows:]
         Prepared Statement of Eric Goplerud, Ph.D., Director,
  Ensuring Solutions to Alcohol Problems, George Washington University
    Chairman Stark, Congressman Camp, distinguished Subcommittee 
Members, I am Eric Goplerud, research professor in mental health and 
substance use policy in the Department of Health Policy at George 
Washington University Medical Center (GWU). I am pleased to be here 
this morning to discuss the research evidence supporting parity between 
the treatment of mental and substance use conditions treatment of other 
illnesses.
    For the last 5 years, I have directed a research program at GWU, 
Ensuring Solutions to Alcohol Problems, whose mission is to improve 
access to effective, affordable treatment for people with alcohol use 
disorders. We assist employers, government officials, health plans, and 
health care professionals to use effective, science-based strategies to 
change policies and practices that inhibit access to alcohol treatment. 
Previously, I served as associate administrator for Policy and Planning 
at the Substance Abuse and Mental Health Services Administration 
(SAMHSA), and directed quality improvement, finance and performance 
metrics programs at SAMHSA.
    Thank you for the opportunity to participate in this important 
discussion of Medicare parity. The proposed Medicare parity legislation 
would resolve crucial problems caused by the existing Medicare benefit 
design, especially the much higher copayment requirements for 
outpatient treatment of mental and substance use conditions. H.R. 1424, 
the subject of the first panel's discussion this morning, would resolve 
critical problems in commercial insurance coverage of mental and 
addictive disorders. In particular, H.R. 1424 would extend coverage to 
all of the mental disorders defined by the professional standard, the 
American Psychiatric Associations Diagnostic and Statistical Manual 
(DSM); health plans will have to make their criteria for determining 
medical necessity available to beneficiaries and providers; it requires 
out-of-network options if necessary treatment is not available in 
network; and it does not preempt State laws that have stronger 
benefits.
    In my remarks today, I would like to highlight several key points:

      Parity is the right thing to do.
      Now is time to eliminate disparities in Medicare 
coverage.
      Parity will fix problems in service use and provider 
payment.
      Parity will lead to better healthier seniors.
      The benefits of parity outweigh the slight increase in 
initial cost.

    In addition, I would like to address specific issues related to 
parity coverage for persons with alcohol and other drug use disorders.
Parity is the Right Thing To Do
    In 1965, when Medicare was established, its benefit closely 
mirrored the typical commercial health insurance product at the time. 
In 1965, most health insurance offered very limited coverage for 
treatment of mental and substance use conditions. Most singled out 
mental health for more restricted benefits because of concerns that 
diagnosis was subjective and imprecise, treatments were of questionable 
effectiveness and outcomes difficult to measure. There was a concern 
(perhaps justifiable) that equitable coverage would lead to overuse and 
uncontrolled costs. Given this environment, Medicare followed 
conventional wisdom.
    The result: Medicare requires 50 percent copayments for outpatient 
treatment of mental and substance use conditions, but only 20 percent 
for outpatient treatment of other illnesses. Medicare limits lifetime 
inpatient days in psychiatric hospitals, but has no limits for 
inpatient treatment of other illnesses.
    Although an inequitable benefit design may have been the right 
decision more than 40 years ago, advances in the diagnosis and 
treatment of mental illness and addiction require us to reevaluate 
those old assumptions. The biochemical, genetic and neurological bases 
of many mental illnesses and addictions are far better understood now. 
Diagnosis is more precise and predictive. Psychological treatments are 
more specific and effective. Medications and psychotherapy now help 
millions of people to live fulfilling lives in with families, jobs and 
friends.
    In 1999, I led the team in HHS that negotiated with the Office of 
Personnel Management for full and comprehensive parity for 9 million 
beneficiaries in the Federal Employees Health Benefit Program. We now 
have 6 years' experience with FEHBP parity and a high-quality 
evaluation of the program demonstrates that equitable coverage of 
mental and substance use treatment improves access to care without 
significantly increasing costs.
    There are now 42 States that mandate mental health and substance 
abuse coverage requirements for group health insurance products. Most 
are substantially more equitable than the present Medicare benefit. 
Employers, State Medicaid programs, and Medicare through Medicare 
Advantage have used managed care techniques that have dramatically 
changed mental health and substance use treatment patterns, dropping 
hospital lengths of stays, increasing use of intensive outpatient and 
psychosocial rehabilitation services, and increasing access to 
outpatient treatment from mental health and substance use treatment 
specialists. The availability of powerful, safer, and more easily 
managed psychotropic medications (coupled with physician counseling) 
has rapidly expanded the role of primary care physicians and other 
health care professionals. These changes make re-examination of the 
unequal outpatient copayment in Medicare Part B, the limitations on 
psychiatric inpatient days in Part A, and the extension of coverage for 
intensive outpatient services the right thing to do.
Now Is the Right Time To Eliminate Disparities in Coverage
    In creating the New Freedom Commission in 2002, President Bush 
stated:

          ``Our country must make a commitment: Americans with mental 
        illness deserve our understanding, and they deserve our 
        excellent care. They deserve a health care system that treats 
        their illness with the same urgency as a physical illness. 
        Health plans should not be allowed to apply unfair treatment 
        limitations or financial requirements on mental health 
        benefits. I'll work with the Senator [Dominici]. I will work 
        with the Speaker. I will work with their House and Senate 
        colleagues to reach an agreement on mental health parity.'' 
        (April 29, 2002)

    Surgeon General Satcher, in his Report on Mental Health and Mental 
Illness, found:

          ``. . . formidable financial barriers block off needed mental 
        health care from too many people regardless of whether one has 
        health insurance with inadequate mental health benefits, or is 
        one of the 44 million Americans who lack any insurance. We have 
        allowed stigma and a now unwarranted sense of hopelessness 
        about the opportunities for recovery from mental illness to 
        erect these barriers. It is time to take them down.'' (``Mental 
        Health: A Report of the Surgeon General,'' 1999)

    Public opinion polls consistently show overwhelming support for 
health insurance to handle mental illnesses and addictions like other 
illnesses. A November 2006 poll conducted for Mental Health America 
found that most Americans support covering mental health treatment, 
support parity in coverage, and this support is bipartisan:

      Nearly all Americans (96 percent) think health insurance 
should include coverage of mental health care.
      89 percent assert that insurance plans should cover 
mental health treatments at the same level as treatments for general 
health problems.
      A large majority (74 percent) believe that insurance 
plans should cover substance abuse treatments at the same levels as 
treatments for general health issues.
      Public demand for mental health equity is bipartisan: 83 
percent of Republicans and 92 percent of Democrats want equitable 
health insurance.

    A Michigan poll conducted in 2000 found that 88 percent of 
Americans feel that a person's health insurance should pay the cost of 
treatment for mental illness to the same extent that it pays for the 
cost of treating other illnesses. A 2004 poll by Peter Hart and 
Coldwater Associates found that 76 percent of likely voters are more 
likely to vote for a candidate favoring legislation requiring health 
insurance to handle addictions the same as other medical conditions. In 
California, 54 percent of voters in 2004 supported Proposition 63 to 
impose a tax to cover expanded treatment for mentally ill adults and 
children.
    In 2002, the Medicare Payment Advisory Committee (MedPAC) 
recommended that the outpatient mental health limitation be eliminated, 
finding that the modest increase in program costs likely to result from 
parity ($500 million in 2002) is justified in light of the improvement 
in access to treatment and cost-sharing simplifications that would be 
the result. (MedPAC, 2002, p. 65).
Parity Will Fix Problems in Service Use and Provider Payment
    Later, Dr. Manderscheid will discuss his research on how the 50 
percent copayment for outpatient mental and substance use treatment 
disrupts good community care, contributing to over-utilization of 
emergency and inpatient services, hinders continuity of care when 
patients are discharged from the hospital, and creates barriers to 
integrated outpatient care by physicians and other health care 
providers who are managing the many co-occurring physical and mental 
illnesses of Medicare beneficiaries. I would like to point to two 
consequences that Dr. Manderscheid will not address:

      Continuity of care is undermined by the current Medicare 
coverage disparity. Standard quality measures developed by the National 
Committee for Quality Assurance (NCQA) include measures of the 
proportion of patients with mental or substance use conditions 
discharged from a psychiatric hospital who start outpatient treatment 
within 7 and within 30 days. Medicare lags far behind private 
insurance.
        For commercially insured patients, 56 percent get 
outpatient care within 7 days and 76 percent within 30 days. For 
Medicare patients, only 39 percent are seen within 7 days and 57 
percent within 30 days. Apparently, Medicare benefit restrictions 
create financial barriers for patients and health care professionals 
that account for this almost 20 percent quality gap.
        In Medicare, only 2 patients out of 1,000 beneficiaries 
are identified as having a substance use problem--even though 3.2 
percent of persons 65 years or older drink heavily, and 0.7 percent 
intentionally misuse prescription drugs. Of those identified, fewer 
than 1 in 20 receives a minimum of 3 services in the next 45 days. In 
commercial insurance, three times as many patients receive this level 
of care.

      Distortions and inconsistencies in payment will be 
corrected with Medicare parity. The DHHS Office of the Inspector 
General (OIG) recently found that Medicare fiscal intermediaries have 
adopted inconsistent policies regarding the application of the 
outpatient limitation. In a study of 57 carriers, nine different 
policies for the application of the limitation were identified. In over 
one-half of the service areas, carriers incorrectly subjected 
evaluation and management services for patients with Alzheimer's 
disease to the 50 percent copay. Other CMS and OIG studies have found 
widespread confusion among MH/SA treatment providers and carriers, 
protracted reimbursement adjudication processes and high rates of 
claims denials (up to 20 percent of medication management and 50 
percent of group therapy claims are denied).

Parity Will Lead to Healthier Seniors
    From almost every authoritative source, a consistent message can be 
seen supporting integrated care. For example, the fundamental finding 
in the Institute of Medicine's report, ``Improving Health Care for 
Mental and Substance Use Conditions'' (2005) is that ``Health care for 
general, mental, and substance use problems and illnesses must be 
delivered with an understanding of the inherent interactions between 
the mind/brain and the rest of the body.'' The committee recommended 
``removal of barriers to and restrictions on effective and appropriate 
treatment that may be created by copayments, service exclusions, 
benefit limits, and other coverage policies'' (IOM, 2005, p. 12). In 
three places the IOM report points to Medicare's 50 percent copayment 
for outpatient treatment as an example of financial barriers to 
effective care.
    Establishing Medicare parity is consistent with at least 29 
authoritative, research-based clinical practice standards from 
professional medical societies, independent quality improvement 
organizations and the VA/DoD. These guidelines direct clinicians to 
provide integrated health and behavioral health care (especially for 
the chronic, disabling conditions that afflict older adults). Several 
of these guidelines are listed in the appendix.
    Clinical practice standards for heart disease, type II diabetes, 
chronic pain and stroke all direct clinicians to screen for depression, 
anxiety and alcohol use, and to actively manage these commonly co-
occurring conditions. The Veterans Administration and Department of 
Defense have created a number of joint evidence-based clinical practice 
guidelines for common health and behavioral health conditions affecting 
elderly and disabled veterans. Their guidelines for depression, 
substance use disorder, post-traumatic stress disorder, and other 
mental illnesses recommend primary care screening and ongoing 
management, with referral to mental and substance use treatment 
specialists for severe or complicated problems.
    In 2005, Medicare initiated the ``Welcome to Medicare'' preventive 
physical and screening examination. The preventive assessment 
explicitly includes screening for depression, alcohol and drug use. The 
one-time Welcome examination is covered as a regular outpatient visit, 
subject to the 20 percent copayment. The inclusion of depression and 
alcohol screening is consistent with the recommendations of the U.S. 
Preventive Services Task Force (USPSTF). The USPSTF is an independent 
panel of experts in primary care and prevention that systematically 
reviews the evidence of effectiveness and develops recommendations for 
clinical preventive services. It recommends:

      Screening adults for depression in clinical practices 
that have systems in place to assure accurate diagnosis, effective 
treatment, and followup.
      Screening and behavioral counseling interventions to 
reduce alcohol misuse by adults, including pregnant women, in primary 
care settings.

    Without Medicare parity, primary care clinicians who follow CMS 
recommendations for the Welcome to Medicare preventive evaluation face 
the dilemma of finding patients with possible depression or alcohol 
problems who will not be able to afford the copay to get necessary 
treatment.
The Benefits of Parity Will Outweigh the Slight Increase in Initial 
        Cost
    Studies on the impact of parity have found that access improves 
while service costs barely increase. For example the evaluation of the 
Federal Employees Health Benefit Program parity found that costs 
increased by less than 1 percent (0.94 percent), at the same time that 
utilization increased by 15 percent. More people used mental health and 
substance use treatment services because parity makes treatment more 
affordable. At the same time, health plan costs barely increase as 
plans and patients have more flexibility in benefit usage, less 
expensive alternatives to inpatient care are emphasized, and early 
intervention and preventive care services are promoted. SAMHSA's report 
on actual State experiences with parity found that ``State parity laws 
have had a small effect on premiums. Cost increases have been lowest in 
systems with tightly managed care and generous benefits. Most insurers 
in Maryland, Minnesota, New Hampshire, and Rhode Island reported small 
increases in total premium due to MH/SA parity laws.''
Parity for Treatment of Alcohol and Other Substance Use Disorders
    Before I conclude, I would like to briefly discuss the integration 
of alcohol and drug use treatment under parity.
    Alcohol use disorders are the predominant substance use conditions 
affecting Americans--no matter what age or income level. This chart 
shows that alcohol use disorders share all of the characteristics of 
other chronic illnesses, except one--health insurance coverage is not 
equitable.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


The Cost of Substance Use Parity
    An extensive George Washington University Medical Center analysis 
of 11 State studies on SA parity shows that the cost of parity to 
employers is negligible--raising annual premiums just 0.2 percent.\1\
---------------------------------------------------------------------------
    \1\ http://www.ensuringsolutions.org/resources/
resources_show.htm?doc_id=339043.
---------------------------------------------------------------------------
    ``The cost of parity is comparatively small when compared to 
overall health expenditures and when spread out over all enrolled 
members,'' concluded California's State Legislative Analyst's Office 
after reviewing health insurance coverage of substance abuse 
treatment.\2\ Mandating parity would not place an undue burden on 
businesses \3\ that offer health insurance to their employees.\4\ The 
analysis shows that:
---------------------------------------------------------------------------
    \2\ Legislative Analyst's Office, California State Legislature. 
Unpublished. Review of Health Insurance Coverage of Substance Abuse 
Treatment, Pursuant to Chapter 305, Statutes of 2000 (SB 1764, 
Chesbro). Sacramento, CA.
    \3\ Generally, small businesses of fewer than 25 or 50 employees 
are exempt from State parity mandates, as are companies that self-
insure health benefits.
    \4\ Goplerud, Eric and Cimons, Marlene. 2002. Workplace Solutions: 
Treating Alcohol Problems through Employment-Based Health Insurance. 
Washington, DC: Ensuring Solutions to Alcohol Problems. http://
www.ensuringsolutions.org/pages/rerere.html.

      Equitable coverage reduces pressure on States budgets 
(and the tax burden on citizens and employers). Oregon, for example, 
found the State saves $5.62 in tax-supported health, corrections and 
welfare costs for every State dollar spent on people who complete 
treatment.\5\
---------------------------------------------------------------------------
    \5\ Oregon Legislative Administration Committee Services. 2000. 
Joint Interim Task Force on Mental Health and Chemical Dependency 
Treatment: Final Report, Salem, OR.
---------------------------------------------------------------------------
      Parity increases the number of people who receive 
treatment, thereby reducing their long-term cost to the State. In 
addition, more get treatment as outpatients and inpatients, while the 
length of (more expensive) hospital stays is sharply reduced.
      The benefits of mandatory employment-based insurance 
parity are substantial. A North Carolina legislative report concludes: 
``Studies from several States have consistently shown that appropriate 
treatment of chemical dependency results in a significant reduction in 
medical claims, absenteeism, and disability; an increase in 
productivity; and a healthier and safer environment for all 
employees.'' \6\
---------------------------------------------------------------------------
    \6\ North Carolina Legislative Research Commission. 2000. Mental 
Health and Chemical Dependency Parity: Report to the 2000 Session of 
the 1999 General Assembly of North Carolina. Raleigh, NC. Legislative 
Research Commission.
---------------------------------------------------------------------------
      According to a PricewaterhouseCoopers actuarial analysis, 
the cost of parity to individual businesses goes down sharply when all 
or most businesses in a State are required to have equal coverage.\7\
---------------------------------------------------------------------------
    \7\ Bachman, R.E. 2002. An Actuarial Analysis of Comprehensive 
Mental Health and Substance Abuse Benefits for the State of New York. 
Atlanta, GA: PricewaterhouseCoopers L.L.P.

    In recent years, many States and the Federal Government have taken 
steps to require businesses that offer health insurance for their 
employees to cover alcohol and drug treatment on equal basis with 
coverage for treatment of other illnesses. Forty-two States require 
equitable coverage for some or all mental illnesses. Seven States also 
require equal coverage for treatment of alcohol-related problems.\8\ To 
aid their consideration of substance abuse parity legislation, 11 
States conducted studies of the costs and impact of equitable coverage 
of treatment for alcohol and other drug problems.\9\
---------------------------------------------------------------------------
    \8\ Connecticut, Delaware, Maine, Minnesota, Vermont, Virginia, and 
West Virginia. The remaining States either require some lesser level of 
coverage, or lack any requirements. See Goplerud, Eric and Cimons, 
Marlene. 2002. Workplace Solutions: Treating Alcohol Problems through 
Employment-Based Health Insurance. Washington, DC: Ensuring Solutions 
to Alcohol Problems. http://www.ensuringsolutions.org/pages/
rerere.html.
    \9\ The studies were performed in Alaska, California, Delaware, 
Hawaii, Maine, New York, North Carolina, New Jersey, Ohio, Oregon and 
Vermont.
---------------------------------------------------------------------------
    The parity reports recognize that States have a significant 
financial, social and political interest in preventing and treating the 
disease of alcoholism and other alcohol-related problems.\10\ Overall, 
the parity studies recommended including substance abuse in parity. ``A 
State requirement is the only real option that will accomplish the 
objective of improved mental or nervous coverage at a reasonable 
premium cost,'' concluded Ronald E. Bachman, Principal, 
PricewaterhouseCoopers.\11\ The experts found it is more cost-efficient 
and is easy to include with mental health coverage, resulting in 
increased productivity, saving tax dollars, fewer hospitalizations, 
shorter inpatient stays and the use of less expensive outpatient 
services.
---------------------------------------------------------------------------
    \10\ National Center on Addiction and Substance Abuse at Columbia 
University (CASA). 2001. Shoveling Up: The Impact of Substance Abuse on 
State Budgets. New York, NY.
    \11\ Bachman, R.E. 2001. An Actuarial Analysis of Full Parity for 
Mental Health and Substance Abuse Benefits in the State of New Jersey. 
Atlanta, GA: PricewaterhouseCoopers L.L.P.
---------------------------------------------------------------------------
    ``Parity creates a level playing field for all insurers and 
provides adequate risk-sharing over a large population to minimize any 
premium increase due to the claims experience of any one group,'' 
concluded the New Jersey task force.\12\
---------------------------------------------------------------------------
    \12\ Bachman, R.E. 2001. An Actuarial Analysis of Full Parity for 
Mental Health and Substance Abuse Benefits in the State of New Jersey. 
Atlanta, GA: PricewaterhouseCoopers L.L.P.
---------------------------------------------------------------------------
Ripple Effect
    Minnesota found that almost 80 percent of the costs of substance 
abuse treatment were offset in the first year following treatment due 
to decreased use of hospital, emergency room and detoxification 
services and reduced arrests.\13\ California found that criminal 
activity declined by 66 percent, drug and alcohol use declined by 40 
percent, and hospitalizations declined by 33 percent following 
treatments.\14\
---------------------------------------------------------------------------
    \13\ North Carolina Legislative Research Commission. 2000. Mental 
Health and Chemical Dependency Parity: Report to the 2000 Session of 
the 1999 General Assembly of North Carolina.
    \14\ Gerstein, D.R., Johnson, R.A., Harwood, H., Fountain, D., 
Suter, N., and Malloy, K. 1994. Evaluating Recovery Services: The 
California Drug and Alcohol Treatment Assessment (CALDATA). Sacramento, 
CA: State of California Department of Drug and Alcohol Problems.
---------------------------------------------------------------------------
    The Ohio Department of Alcohol and Drug Addiction Services found 
that 1 year after participants completed treatment, ``absenteeism was 
reduced by 61 percent, incomplete work by 37 percent, and mistakes in 
work by 36 percent,'' according to Director Lucille Fleming.\15\
---------------------------------------------------------------------------
    \15\ Ohio Department of Alcohol and Drug Addiction Services. 1996. 
Ohio Cost Effectiveness Study. Columbus, OH: Ohio Department of Alcohol 
and Drug Addiction Services.
---------------------------------------------------------------------------
A Healthier Approach
    The report by the Alaska task force explicitly recognizes the 
connections between mental illnesses and addictions: ``There is a high 
incidence of substance abuse among the mentally ill, and unless both 
disorders are treated, positive outcomes for either are unlikely. As 
the director of the Ohio Department of Alcohol and Drug Addiction 
Services observed, improving access to treatment effects change 
measured by ``real numbers, real people, [and] real benefits to the 
employer, to the employee, and to . . . taxpayers.'' \16\
---------------------------------------------------------------------------
    \16\ Alaska: Alaska Mental Health Parity Task Force. 1999. Mental 
Health Parity Task Force Report: Final Report. Anchorage, AK.
---------------------------------------------------------------------------
Conclusion
    Before I conclude, I would like to thank the Committee for the 
opportunity to address this important issue. In considering Medicare 
parity, these points are key:

      Parity is the right thing to do.
      Now is time to eliminate disparities in Medicare 
coverage.
      Parity will fix problems in service use and provider 
payment.
      Parity will lead to better healthier seniors.
      The benefits of parity outweigh the slight increase in 
initial cost.

    I wish to thank the Committee for this opportunity and look forward 
to answering any questions that you may have.

                                 

    Chairman STARK. Thank you very much, Dr. Goplerud.
    Dr. Manderscheid, he didn't give all your testimony; would 
you like to continue with what he left you?

STATEMENT OF RONALD W. MANDERSCHEID, PH.D., DIRECTOR OF MENTAL 
    HEALTH AND SUBSTANCE USE PROGRAMS, CONSTELLA GROUP LLC, 
                      BALTIMORE, MARYLAND

    Mr. MANDERSCHEID. Thank you very much, Mr. Chairman, Mr. 
Camp, other Members of the Committee. I am honored to be here 
to testify here today.
    The reforms you are proposing are very badly needed. The 
current system of mental health benefits was designed for the 
world of 1965.
    Today, I would like to make three major points in support 
of proposed reforms:
    My first point is that reducing Medicare copayment for 
outpatient mental health services from 50 percent to 20 percent 
so that it is the same as for all other illnesses will increase 
appropriate outpatient service use, decrease costly inpatient 
service use, and encourage better use of physician services. In 
my written testimony I provide statistical evidence of this 
point. The current situation is such that Medicare recipients 
are less likely to use mental health services than our Medicaid 
recipients. They are more likely to use inpatient services to 
cost more per year. They are less likely to use outpatient 
services and they are also less likely to use physician 
services. I would be very glad to work with the Congressional 
Budget Office to document that the proposed change in the copay 
from 50 percent to 20 percent will not arrive at a tremendous 
increase in the cost to the Medicare program.
    My second point is that parity is needed both for mental 
health and substance use services, because elderly people are 
subject to all of these disorders. Again in my written 
testimony, I provide evidence of the high rate of depression, 
anxiety disorders, and alcohol use disorders in the elderly 
population.
    I won't repeat those here.
    We should also note that these problems not only cause 
disability, they also co-occur with other chronic illnesses. 
For example, elderly Medicare recipients with diabetes are 
almost 1.6 times as likely as other Medicare recipients to have 
depression. Untreated depression in the elderly can also lead 
to suicide, which has been mentioned in previous testimony here 
today.
    What do these statistics mean? Achieving parity for both 
mental health and substance use care will lead to better 
treatment for mental health and alcohol problems and also help 
to contain the cost of treating other chronic diseases.
    By other chronic diseases, I cited this statistic on 
diabetes. We could also talk about chronic heart disease. We 
could also talk about chronic asthma. There are high correlates 
there with mental disorders.
    My third point is that collaborative care between mental 
health substance use and primary care, with oversight by 
qualified care managers, will be a very productive and cost-
effective way to deliver mental health and substance use 
services.
    It is well known that public mental health clients die 25 
years younger than other citizens primarily because they do not 
receive appropriate primary care services. Similarly, when one 
suffers a heart attack, lack of assessment and treatment for 
depression greatly increases the likelihood of death. Problems 
of depression are also frequently accompanied by inappropriate 
alcohol use or dependence.
    What do these findings mean? Together they point to the 
importance of coordinating good primary care with mental health 
and substance use care. This can best be done through 
collaborative care carried out through a care manager. One's 
very life may depend on whether this is done.
    I would like to thank the Chairman and Members of the 
Committee for the opportunity to testify today. I would also 
like to thank each of you on behalf of all people who are 
mentally ill or suffer from addictive disorders for taking on 
this very important issue.
    Thank you very much.
    [The prepared statement of Mr. Manderscheid follows:]
          Prepared Statement of Ronald W. Manderscheid, Ph.D.,
         Director of Mental Health and Substance Use Programs,
                Constella Group LLC, Baltimore, Maryland
    Mr. Chairman and Members of the Subcommittee, I am Dr. Ron 
Manderscheid. Currently, I am the director of Mental Health and 
Substance Use Programs at Constella Group and adjunct professor in the 
Department of Mental Health at the Bloomberg School of Public Health, 
Johns Hopkins University. Previously, I was chief of Mental Health 
Statistics and Informatics at the National Institute of Mental Health 
and the Substance Abuse and Mental Health Services Administration in 
the U.S. Department of Health and Human Services, where I also edited 
the biennial publication, Mental Health, United States.
    For a period of 10 years while I was at SAMHSA, I also served as 
the Federal Project Officer for a large study on service use and 
expenditures for Medicare, Medicaid, and Private Insurance. To my 
knowledge, this project represents the only long-term research on 
Medicare mental health and substance use expenditures. Simultaneously, 
I served as a consultant on the evaluation of the mental health parity 
provisions of the Federal Employees Health Benefit Program.
    I would like to make three major points today, based on my previous 
research work.
    My first point is that reducing the Medicare copayment for 
outpatient mental health services from 50% to 20%--so that it is the 
same as for all other illnesses--will increase appropriate outpatient 
service use, decrease costly inpatient service use, and encourage 
better use of physician services.
    Available multiyear data \1\ consistently show that the 50 percent 
Medicare copayment for outpatient mental health care has a specific set 
of negative consequences in terms of patterns of service use:
---------------------------------------------------------------------------
    \1\ ``Evolution of Mental Health Care under Medicare,'' 
Congressional Staff Presentation, May 2, 2003, electronic file 
provided.

    1.  The percent of all Medicare service recipients who use mental 
health and substance use services is smaller than for Medicaid.
    2.  For Medicare mental health service recipients:

        The percent that use inpatient services is generally 
larger than for Medicaid, and annual costs for these services are 
higher. This pattern is consistent across diagnosis, age, race/
ethnicity, and gender groups.
        The percent that use outpatient services is smaller 
than for Medicaid, and annual costs for these services are generally 
lower.
        The percent that use physician services is larger than 
for Medicaid, but annual costs are lower.

    What do these patterns mean? Because of the 50% Medicare copayment 
for outpatient mental health services, fewer Medicare recipients 
receive mental health and substance use services; those who do are more 
likely to receive costly inpatient care; and they receive fewer needed 
physician services.
    My professional opinion is that the total cost to Medicare will 
increase only slightly as a result of the proposed change of the mental 
health outpatient copayment from 50% to 20%. This will be true because 
of the tradeoff between inpatient and outpatient care. Inpatient care 
will decrease; outpatient care will increase. Further, because many 
Medicare mental health service recipients are dual eligible for 
Medicaid, a change in Medicare is likely to have a salutary effect on 
Medicaid costs. I would be glad to work with the Congressional Budget 
Office to document these assertions.
    The current copayment structure was designed for the world of 1965. 
It incentivizes costly inpatient care. Today, more than 40 years later, 
we have dramatic new drug treatments and psychotherapy care that are 
documented to be effective. These can all be provided in outpatient 
settings. It is time to change the discriminatory Medicare mental 
health copayment.
    My second point is that parity is needed for both mental health and 
substance use services because elderly people are at risk for serious 
mental illnesses and alcohol problems. If left untreated, these 
problems exacerbate other chronic conditions that also are very common 
in the elderly population. Currently, only a small fraction of Medicare 
beneficiaries with alcohol and other substance use problems actually 
receive services under Medicare.2,}3 The rates of care are 
low for mental illness and substance use disorders among Medicare 
recipients compared to national prevalence figures for these disorders.
---------------------------------------------------------------------------
    \2\ Mental Health, United States, 2002, Chapter 13, accessible at: 
http://mentalhealth.samhsa. gov/publications/allpubs/SMA04-3938/
Chapter13.asp.
    \3\ Mental Health, United States, 2004, Chapter 16, accessible at: 
http://mentalhealth.samhsa. gov/publications/allpubs/sma06-4195/
Chapter16.asp.
---------------------------------------------------------------------------
    The elderly population covered through Medicare needs outpatient 
mental health and substance use services. Elderly people are 
particularly vulnerable with respect to depression, anxiety, and 
alcohol use problems, each of which can be treated on an outpatient 
basis.
    The national data on diagnoses are quite informative: \4\
---------------------------------------------------------------------------
    \4\ Lifetime and Annual Prevalence of DSM-IV/WMH-CIDI Disorders by 
Sex and Cohort, from the National Comorbidity Survey Replication, 
accessible at: http://www.hcp.med.harvard.edu/ncs.

      DISORDER
                                            PERCENT OF POPULATION

      Major Depression:
                                             2.9%--Last Year  (For ages 
60+)
                                            10.6%--Lifetime         "
      Anxiety Disorders:
                                             8.8%--Last Year        "
                                            17.7%--Lifetime         "
      Alcohol Use
                                             0.3%--Last Year        "
        (With and Without Dependence)
                                             6.3%--Lifetime         "

    For alcohol use,\5\ we know also that about 40% of persons aged 65 
and older used alcohol in the past month, more than 8% were binge 
drinkers, and 1.7% were heavy drinkers.
---------------------------------------------------------------------------
    \5\ Results from the 2005 National Survey on Drug Use and Health: 
National Findings, accessible at: http://oas.samhsa.gov/nsduh/2k5nsduh/
2k5Results.htm#TOC.
---------------------------------------------------------------------------
    These problems not only cause disability, they also co-occur with 
other chronic illnesses.
    For example, elderly Medicare recipients with diabetes are almost 
1.6 times as likely as other Medicare recipients to have depression.\6\ 
Untreated depression in the elderly can also lead to suicide. 
Depression and anxiety are also frequently associated with the early 
phases of Alzheimer's disease.
---------------------------------------------------------------------------
    \6\ Prevalence and Costs of Major Depression among Elderly 
Claimants with Diabetes, in Diabetes Care, electronic file provided.
---------------------------------------------------------------------------
    What do all of these statistics mean? Achieving parity for both 
mental health and substance use care will lead to better treatment of 
mental health and alcohol problems and also help to contain the costs 
of treating other chronic diseases.
    Offering parity for both mental health and substance use services 
will also likely lead to lower overall costs for the program. By 
encouraging that these issues be addressed before they become crises, 
it is likely that recipients will cost the program less over their 
lifetimes.
    My third point is that collaborative care between mental health, 
substance use, and primary care, with oversight by qualified care 
managers, will be a very productive and cost-effective way to deliver 
mental health and substance use care services.
    It is well known that public mental health clients die 25 years 
younger than other citizens, primarily because they do not receive 
appropriate primary care.\7\ Similarly, when one suffers a heart 
attack, lack of assessment and treatment for depression greatly 
increases the likelihood of death. Problems of depression are 
frequently accompanied by inappropriate alcohol use or dependence. That 
is why the Institute of Medicine and the National Business Group on 
Health have both issued strong calls for closer coordination between 
mental health, substance use, and primary care services.
---------------------------------------------------------------------------
    \7\ Congruencies in Increased Mortality Rates, Years of Potential 
Life Lost, and Causes of Death Among Public Mental Health Clients in 
Eight States, in Preventing Chronic Disease, accessible at: http://
www.cdc.gov/pcd/issues/2006/apr/05_0180.htm.
---------------------------------------------------------------------------
    What do these findings mean? Together, they point to the importance 
of coordinating good primary care with mental health and substance use 
care. This can best be done through collaborative care, carried out 
through a care manager. One's very life may well depend upon it.
    I would like to thank the Chairman and the Members of the 
Subcommittee for the opportunity to testify today on this very 
important issue.

                                 

    Chairman STARK. Thank you. Dr. Harbin.

    STATEMENT OF HENRY T. HARBIN, M.D., BALTIMORE, MARYLAND

    Dr. HARBIN. Thank you very much, Chairman Stark and Ranking 
Member Camp and other Committee Members for holding this 
important hearing. I guess I had better explain my background a 
little bit. I am a psychiatrist for over 30 years. Most of my 
career, however, has been spent in health care administration; 
10 years of that in the public mental health system in 
Maryland; 3 of those years as director of the State Mental 
Health Authority, where I had a lot of experience with some of 
the community-based programs that you are putting into this 
bill, as well as the financing of them by Medicaid and 
Medicare.
    Most of the last 16 years I have spent with two national 
private managed mental health care companies, Greenspring 
Health Services and Magellan Health Services. I was CEO of both 
of those companies at different points. Magellan, at the time 
that I was there, was the largest of the national managed 
behavioral companies, and at one point we were managing the 
mental health and substance abuse benefits for over 70 million 
Americans, and that included almost 40 percent of the Fortune 
500 companies, as well as both Medicare and Medicaid 
recipients.
    I have also had the privilege to serve on President Bush's 
new Freedom Commission on Mental Health, and more recently 
worked with the National Business Group on Health on an 
important document that they published at the end of 2005 on 
how large employers could do a better job of purchasing 
behavioral health care services. I am pleased to see that many 
of the items in this Medicare bill were all recommendations 
from the National Business Group as well.
    A couple of comments. You have heard a lot about the data 
on the cost of parity--or the lack of cost, I might say. I 
think that we have at least four major documents--the Surgeon 
General's Report, New Freedom Commission's Report, the 
Institute of Medicine Report that came out in 05, as well as 
the National Business Group, all of which support the changes 
in these financing issues that you are addressing in this bill.
    I would like to just add Magellan and Greenspring's 
experience of managing parity benefits. We manage many 
accounts, large employers or groups of employers that shifted 
to parity in the midst of our managing their care. Our 
experience was actually even lower than what you have seen from 
some of the actuaries. We range from .2 to .8 percent increase 
of total medical premiums in those accounts.
    I would like to talk now a little bit about two areas that 
I would call unintended consequences of a limit of the 
specialty mental health and substance abuse benefit, but are 
very important and haven't been emphasized as much.
    The first of those is we are seeing an increased reliance 
on the general medical setting in primary care physicians' 
offices and the sole use of psychiatric medications for the 
treatment of many common mental health and substance abuse 
problems.
    One of the reasons for this is the benefit constraints that 
make it difficult financially for patients and their families 
to go see a specialist, so they are incentivized basically to 
get their care in a primary care physician's office. Now, many 
people will get good care there and primary care physicians are 
an important part of the behavioral health continuum. But most 
primary care physicians' offices are not equipped to handle the 
full range of diagnostic and treatment services, and the most 
common intervention by many primary care doctors is only giving 
psychiatric medication.
    Many studies have shown that about 60 percent of all 
psychiatric medications are given by primary care doctors, not 
specialists, and a number of quality problems have been 
repeatedly documented. I will just read from one of those. The 
National Co-Morbidity Survey that was published in 05 showed 
that only 12.7 percent of mental health patients treated in a 
general medical setting received minimally adequate care 
compared to over 40 percent of the specialty mental health 
sector. Most studies have shown a combination of appropriate 
psycho-social and medications are needed to effectively treat 
these disorders. But when you block one aspect of that, namely 
the specialty treatment, you won't get a full balance.
    The second point is that the blocking of access to 
effective behavioral health care continuum is going to make it 
difficult for our health care system to adequately address 
chronic medical physical problems, diabetes, and heart disease. 
We have discovered in the last decade or two that many of these 
patients, in a range of 30 to 50 percent, have comorbid 
depression and other mental health problems.
    As many insurers--I will stop in a second--have tried to 
focus on this, it is clear that without effective access to 
depression treatment of the disorders, it will make it 
difficult to handle these chronic medical problems.
    My final comment, and I will answer this as I run out of 
time is to re-emphasize what Dr. Manderscheid said. There are 
programs called collaborative care, which effectively narrate 
the primary care system and the specialty behavioral system, 
and I would support adding elements of that if possible in this 
bill. Thank you.
    [The prepared statement of Dr. Harbin follows:]
    Prepared Statement of Henry T. Harbin, M.D., Baltimore, Maryland
    I would like to thank Chairman Stark and Ranking Member Camp for 
holding this hearing on the important issue of mental health and 
substance abuse parity for both private insurance as well as Medicare.
    As a psychiatrist for over 30 years, I have been an advocate for 
full parity for all mental health and substance use disorders for all 
payers both public and private. Most of my career has been in mental 
health care administration in both the public and private sector. I 
spent 10 years in the public health system in Maryland, three of those 
years as director of the State Mental Health Authority.
    I have also been chief executive officer of two national managed 
behavioral health care organizations: Greenspring Health Services and 
Magellan Health Services. Both of these companies held responsibility 
for managing the mental health and substance abuse benefits for 
millions of Americans. These individuals were insured by commercial 
insurers, Medicaid, or Medicare. I was CEO of Magellan from 1998 to 
2001, and chairman for almost 2 more years. During that time Magellan 
was the largest of the managed behavioral health care companies and had 
approximately 70 million members. Magellan managed the behavioral 
health benefits for approximately 40 percent of Fortune 500 companies. 
I had the privilege of serving on the President's New Freedom 
Commission on Mental Health in 2002 and 2003, and more recently co-
chaired a work group for the National Business Group on Health that 
produced a document in December 2005 entitled ``An Employer's Guide to 
Behavioral Health Services.'' Currently, I am providing health 
consulting services. My comments about the Chairman's Medicare Mental 
Health Modernization Act of 2007 are based on these professional 
experiences.
    There have been at least four major publications over the last 
decade to summarize the progress that has occurred in the behavioral 
health field, as well as many of the remaining challenges. Key 
recommendations to address these challenges would advance the treatment 
success of individuals with mental health and substance use disorders.
    The publications include:

    1.  The 1999 publication of the Surgeon General's Report on Mental 
Health;
    2.  The President's New Freedom Commission Report on Mental Health 
in 2003;
    3.  The Institute of Medicine's report on Improving the Quality of 
Health Care for Mental and Substance Abuse Conditions from November 
2005; and
    4.  The December 2005 National Business Group on Health's guide to 
behavioral health services mentioned above.

    All of these documents recognize the critical importance of 
adequate financing of behavioral health care services in implementing 
the recommendations outlined in all of these national reports. Removing 
or reducing the financial barriers that exist today in private 
insurance, Medicare, and Medicaid are minimum requirements for the 
successful achievement of effective, evidence-based behavioral health 
services and the improvement of the lives of our citizens who are 
suffering from these illnesses. The most significant barrier to equal 
access is of course the 50 percent coinsurance requirement for 
outpatient psychotherapy services under Medicare, whether delivered by 
a psychiatrist, psychologist or other behavioral health specialist. If 
a Medicare patient has an office visit with any other medical 
specialist such as a cardiologist, endocrinologist, or oncologist for a 
physical illness the coinsurance is 20 percent. The Medicare Mental 
Health Modernization Act would end this longstanding discrimination 
against the mentally ill.
    Other witnesses can attest to the negligible increase in cost 
resulting from the implementation of parity in many insurance programs 
over the last two decades. Numerous studies have shown that the 
increased cost for full parity ranges from no increase in cost to an 
increase of around 0.9 percent in total medical premiums. At Magellan 
we managed a number of accounts that introduced parity benefits, and in 
our experience, the increase in cost was from a low of 0.2 percent to 
about 0.8 percent of the premium. Most of the increase was due to an 
expansion of outpatient services, paired with a decrease in out-of-
pocket expenditures for the consumer and a corresponding increase in 
expenses by the payer. The concern that providing equal benefits for 
medical and behavioral health care would lead to runaway costs and 
increases in utilization has not materialized in study after study. All 
of these studies, however, were based on the ability to provide 
utilization management of the mental health benefit.
    There have been a number of unintended and deleterious consequences 
that have resulted from the arbitrary limitation of access to specialty 
behavioral services. I will focus on two of these consequences in my 
testimony, as I am sure other witnesses and panel members will discuss 
other important negative consequences.
Increased Reliance on the General Medical Setting for Behavioral Care 
        and Use of Psychiatric Mediations as the Sole Form of Mental 
        Health Treatment
    Many patients want their mental health and substance abuse 
treatment to be given by primary care physicians and this type of 
utilization has increased significantly over the past decade. But due 
to benefit limitations and higher out-of-pocket expenses for mental 
health services, patients who both want and need access to specialty 
care often have little choice but to receive mental health treatment in 
primary care settings alone. Most primary care offices are not equipped 
to provide a full range of behavioral diagnostic and treatment 
services. The most common intervention by the primary care office for 
these disorders is the prescription of psychotropic medications, and 
increasingly these drugs are being used as the sole form of treatment.
    The 2003 New Freedom Commission Report has described the general 
medical system as the ``de-facto mental health system.'' The Surgeon 
General's Report of 1999 documented that primary care physicians 
prescribe over 60 percent of psychotropic drugs. Some studies have 
shown that over 50 percent of patients with depression who receive any 
treatment are managed exclusively in primary care settings. This 
percentage is even higher among older adults covered under Medicare. 
Primary care physicians are an essential part of the health care system 
for behavioral disorders, but when this becomes the only option, we are 
depriving many patients of the most effective and medically appropriate 
treatment. Many primary care physicians have expressed the need for 
greater support and collaboration from behavioral health specialists, 
and enactment of the Medicare Mental Health Modernization Act would 
make this possible.
    Several studies have documented the delivery of suboptimal 
psychiatric care when located solely in primary care settings. The 
National Comorbidity Survey Replication Study (NCS-R) found that only 
12.7 percent of mental health patients treated in the general medical 
setting received minimally adequate care compared to 43.8 percent 
treated in the specialty mental health sector (Wang et al, Arch of 
General Psych, 2005).
    Most studies have shown that the majority of mental health and 
substance use disorders have better outcomes when appropriate drug 
treatments are combined with psychosocial interventions. Most, but not 
all, private payers and the Medicare program have benefit structures 
that make it less expensive for the consumer to access care in the 
general medical setting with psychotropic drug treatment than to get 
optimal access to specialty care where a more effective combination of 
psychosocial and pharmaceutical interventions can be delivered. Many 
health care leaders as well as legislators and citizens have expressed 
concerns that psychiatric drugs are being overused in some populations. 
Concerns have been raised about the frequent use of stimulant drugs 
such as Ritalin for children with Attention Deficit Disorders, 
antidepressant usage for depression in children and teenagers, and 
anti-psychotics being used extensively in the elderly. As long as we 
continue to have a benefit design that restricts access to the most 
appropriate care, we should not be surprised by these trends.
Limited Ability to Appropriately Address High-Risk, High-Cost Chronic 
        Conditions Such as Diabetes and Congestive Heart Failure 
    Lack of access to effective behavioral health care for common 
mental disorders such as depression also contributes to the inadequate 
intervention by health care professionals for high-risk and high-cost 
chronic medical (physical) conditions. Many studies have shown that a 
small percentage of patients with chronic medical conditions insured by 
Medicare, as well as other payers, account for a majority of the 
spending. We now know that a significant number of these patients also 
have behavioral disorders, particularly depression. The estimates range 
from as high as 30 to 50 percent of patients with diabetes and heart 
conditions. The medical costs for patients presenting chronic medical 
conditions along with mental health conditions such as depression are 
often double those of patients without a comorbid behavioral condition 
(see New Freedom Commission Report and the National Business Group on 
Health Report listed above).
    Many physicians, managed care companies, disease management 
companies and payers, including Medicare, are exploring specialized 
interventions for this high-cost subgroup to address the chronic 
medical conditions and behavioral health concerns of these patients. 
Without effective treatment for depression and other common behavioral 
conditions presenting in 30 to 50 percent of these patients, however, 
the success of these intervention programs will be severely limited.
Evidence-Based Practices and Collaborative Care
    In my final comments, I would like to focus on another key aspect 
of the Medicare Mental Health Modernization Act of 2007. The 
legislation recognizes the importance of evidence-based practices and 
requires the Medicare program not only to equalize benefits between 
medical and behavioral health care services, but also to cover a range 
of evidence-based practices for care.
    Just as health care payers have been slow to modernize their 
payments for behavioral health services, they likewise have not allowed 
for payment of clinical programs that have been scientifically proven 
to be more effective than the traditional inpatient programs and 
office-based outpatient programs. As I said at the beginning of my 
testimony, parity is a minimum requirement--but not a sufficient one--
to bring Medicare payment policies in line with 21st Century treatment 
for mental health and substance use disorders.
    There are several community-based treatment programs listed in the 
Medicare Mental Health Modernization Act that are both more effective 
and less expensive than the traditional inpatient care currently funded 
by Medicare. Oftentimes, these community-based programs do not require 
the addition of new services under Medicare, but only flexibility in 
payment so that these more efficient programs can be substituted for 
the more costly services.
    Unfortunately, the current draft of the Chairman's bill fails to 
recognize one critical evidence-based practice that has already shown 
great effectiveness, especially for elderly depressed patients: 
collaborative care. While parity and the access to evidence-based 
specialty mental health treatments are essential to reducing the 
barriers to effective treatment for the millions of older adults with 
common mental disorders, many older adults will continue to visit 
primary care providers rather than mental health specialists for 
treatment of common mental disorders such as depression. 
``Collaborative care programs'' facilitate effective collaboration 
between primary care physicians and mental health specialists, and over 
35 studies spanning 20 years of research in the United States and 
Europe have demonstrated that collaborative care programs are more 
effective than the care available if collaboration is restricted. 
Collaborative care has been shown to more than double the effectiveness 
of traditional care for depression, and at a lower cost than 
traditional care alone.
    In short, collaborative programs improve access to evidence-based 
mental health treatments and improve coordination of primary care and 
mental health care for patients with a combination of mental and 
chronic medical disorders. I will reference the National Business Group 
on Health's Report to describe the collaborative care model:
``Collaborative Care: A Cost-Effective Primary Care Treatment 
        Modality''
    Successful interventions to improve care for depression have a 
number of common features, commonly referred to as ``collaborative 
care.'' The collaborative care model focuses on treatment in general 
medical settings (vs. specialty behavioral health care settings) for 
most patients. Collaborative care includes and combines several quality 
improvement strategies, such as screening, case identification, and 
proactive tracking of clinical (e.g., depression) outcomes, clinical 
practice guidelines and provider training, support of primary care 
providers treating depression by a depression care manager (e.g., a 
nurse, clinical social worker, or other trained staff), and 
collaboration with a behavioral health specialist (e.g., a psychologist 
or a psychiatrist).
    While the details vary, collaborative care interventions have two 
key elements. The first is case management by a nurse, social worker, 
or other trained staff, to facilitate screening, coordinate an initial 
treatment plan and patient education, arrange followup care, monitor 
progress, and modify treatment if necessary. Case management can be 
provided in the clinic and/or by telephone. The second is consultation 
between the case manager, the primary care provider, and a consulting 
psychiatrist, in which the psychiatrist advises the primary care 
treatment team about their caseload of depressed patients. This 
consultation is intended to maximize the cost-effectiveness of 
collaborative care, by facilitating a process described as ``stepped 
care,'' where the treatment algorithm starts with relatively low-
intensity interventions such as antidepressant medication prescribed by 
the primary care provider and telephone case management, with patients 
who fail to respond being shifted to progressively more intensive 
approaches including specialty behavioral health care.
    More than 10 large trials, in a wide range of settings, have 
demonstrated the feasibility of improving depression treatment and 
outcomes, relative to usual care. The documented benefits of 
collaborative depression care include:

      Higher rates of evidence-based depression treatment 
(i.e., antidepressant medication and/or psychotherapy)
      Better medication adherence/compliance
      Reduction in depression symptoms, and earlier recovery 
from depression
      Improved quality of life
      Higher satisfaction with care
      Improved physical functioning
      Increased labor supply

    Collaborative care has typically been found to increase direct 
health care costs slightly, relative to usual care, mainly by 
increasing the use of evidence-based depression treatment. However, 
this investment yields substantial improvements in patients' health 
status and functioning, so that collaborative care is more cost-
effective than usual care for depression and has very favorable cost-
effectiveness compared with other accepted medical interventions. For 
example, the largest trial of collaborative care for depression to date 
found that the program participants were depression-free for an 
additional 107 days over 2 years, relative to usual care, without 
adding significant increases to health care costs.
    Many of the elements of collaborative care would be adequately 
financed if the parity section of this bill is approved. However, to 
fully implement an evidence-based collaborative care program two 
additional services would need to be included for reimbursement, as the 
current Medicare payment structure would not allow for payment. These 
two elements are: (1) the care management/disease management function, 
and (2) the psychiatric consultation to care managers and primary care 
providers. Over 30 studies suggest that these elements are required to 
make collaborative care effective and to achieve maximum value from the 
mental health benefits covered under the parity section of this bill. I 
would hope that the Committee would consider adding these service 
categories. The addition of these categories would allow older adults 
to receive more effective treatment for common mental disorders in 
primary care settings, where many of them prefer to receive care, while 
also providing access to consultation from experienced mental health 
specialists and effective mental health specialty services if needed.
    This concludes my testimony, and I would like to thank the 
Subcommittee for inviting me to present these views and suggestions. I 
would welcome any questions from the Chairman or Members of the 
Subcommittee.

                                 

    Chairman STARK. Thank you. I guess I am not sure I want to 
go here, but it is a looming question. There is an effort in 
the other body to have mental health parity, but approaching it 
somewhat differently. My colleague, Mr. Camp, brought it up in 
a reference to the DSM 4 and the issue--I suspect is that by 
the Federal Government mandating a broad range of coverage, I 
think it was referred to as jet lag and nicotine--or not 
nicotine, but caffeine dependency, things like that, which 
might be considered frivolous, and the worry I suppose is that 
if the Federal Government mandates this broad range of 
problems, there would be increased utilization that we would 
spend too much money on what might be considered frivolous 
problems that aren't necessarily classified as mental health.
    Could each of you kind of, could you address that? What is 
the danger that we are going to just turn loose either in 
allowing providers such as therapists to provide some of the 
care and bill directly or creating too broad a range? What do 
we have to worry about in that case? Do you want to just start 
with Dr. Harbin and we will go down the line.
    Dr. HARBIN. I think it is a very important issue. I would 
like to say, first of all, I think both the Senate and the 
House private insurance parity bill will be a significant 
advancement over our current situation. I am aware of the 
differences. I would like to speak a little bit to the DSM 4 
issue, and to your comments, Congressman Camp, to the earlier 
panel. You have to accept there are a list of disorders in the 
DSM 4, and they also have a list of ``conditions which are 
typically called v codes.'' Some of what you brought up were v 
codes. I don't believe--I am not 100 percent sure about this 
that the Federal employee program covers v codes, even though I 
will add in general medicine, most insurers pay for v codes, 
for medical coverage, for things like hair loss, physicals 
where there isn't a clear disorder, that is the common practice 
there.
    But I don't believe--but it would need to be double-checked 
if Federal employees covers v code. So, that has been a 
historic criticism when everything is thrown in in terms of all 
disorders. But there are some disorders, frankly, and you heard 
that from Dr. Quirk, frankly, that receive very little 
attention in any sort of managed benefit or are unlikely to run 
up the cost.
    So, I think it has been a worry historically. There are 
employers, and in States when they have passed their parity 
bills that have basically allowed any DSM 4 disorder, diagnosis 
in there, and we still see these very minor increases in costs. 
So, I think it is--I understand the flexibility that employers 
and some of their managed care company agents would desire in 
this. I think that is a very valid issue, but I don't think 
from a cost and access point of view this would be a problem.
    Mr. MANDERSCHEID. I think that is an excellent question. 
There are several major issues here to be put on the table. One 
is, again, the issue of stigma that has been brought up by many 
of the witnesses today. I think the problem is exactly the 
reverse. The problem is getting people to care early enough 
rather than getting them to care too early about too frivolous 
a disorder. The incentives in Medicare currently drive people 
toward higher levels of care rather than toward ambulatory 
outpatient care.
    As a consequence, they would not get into that care if they 
did not have very serious disorders at the time they were 
receiving care. A second feature here is the whole issue of 
practice standards. I think a number of witnesses have raised 
that question as well. We have new practice standards in these 
fields. We have new evidence-based practices that we didn't 
have in 1965.
    So, I think very little frivolous care is actually given in 
any part of the mental health system, including in the primary 
care system where a lot of mental health services are offered. 
I think the third feature of this is the fact that our world 
has changed. When Medicare was created, we needed 190-day 
lifetime limit because people went for 60-day inpatient stays. 
That world is long ago gone. We don't need the 190-day lifetime 
limit anymore. We need to open the doors so people get the care 
earlier. We get more toward preventive and early interventions 
with people before they have very serious disorders and they 
end up as someone with a serious mental illness who is dying 25 
years before they should.
    Chairman STARK. Dr. Goplerud?
    Mr. GOPLERUD. Thank you. I would like to talk a little 
about alcohol and drug abuse disorders, which often are being 
put on the side of being frivolous or self-imposed illnesses or 
disorders. In fact, only in the Medicare program, about one 
person in 20 who meets the DSM criteria of alcohol dependence 
or abuse disorder gets any treatment for their condition. The 
consequence is that we have way, way too few people who could 
benefit from the care. There has been reference made to the 
very large number of people who are coming in through the 
trauma care system of this country who are there because of 
alcohol or drug use which is impaired judgment or impaired 
reaction times while driving cars. Many of those people do not 
meet the DSM diagnosis of an alcohol or drug use disorder but 
prompt immediate counseling there in the emergency department 
can cut by 50 percent their likelihood of reinjury, 
rehospitalization and perhaps more importantly, their injuring 
somebody else or killing somebody else. So, what we really have 
as an issue is not enough people who are getting identified, as 
Dr. Manderscheid says, early enough for the conditions which 
are imminently treatable and for which there are evidence-based 
practice standards available.
    Chairman STARK. Thank you. I am going to thank the panel. 
Mr. Camp?
    Mr. CAMP. Thank you, Mr. Chairman. Dr. Harbin, I would like 
to just follow up on that. This would be a change in that at 
least we are talking about Medicare now. The plans that we have 
been talking about between the House and Senate typically have 
not--the House-Senate plan does not define each and every 
mental illness, but says only--it is a true parity bill. It 
says only if you cover a mental illness, you must cover them 
equally with physical illnesses and the House bill lists each 
plan. I don't know the answer to the decodes, but we will try 
to get that, but it just seems to me that for the Federal 
Government to prescribe each and every--in specific detail each 
and every covered item, there is certainly more tradition for 
than that in Medicare, but I think there is a concern there.
    I wanted to talk about the collaborative care issue. I 
think Dr. Manderscheid talked about coordinated care, how we 
transition those folks who have come to a primary care 
physician to actually get the sort of specialty care they need, 
and how do you envision a coordinated care plan working?
    Dr. HARBIN. Thank you. As I ran out of time in that. It is 
in my written testimony in a little more detail. The 
collaborative care model now has almost 37 different randomly 
assigned control studies internationally supporting its 
efficacy. It really consists of four elements, improved 
screening by the primary care physician of mental health and 
substance abuse problems; secondly, that if the primary care 
physician initiates treatment for depression or another common 
mental health problem, the tracking by that patient of a case 
manager disease manager function, so that there is some 
outreach, there is some patient education, there is some 
encouragement of that person or his family to continue with 
treatment and to follow through if there is a referral to a 
specialist.
    Third, it consists of psychiatric consultation to the 
primary care physician's office about the psychiatric 
medications and about the treatment plans. This is often a 
phone-based consultation. The fourth element is close linkage 
between the primary care office and the specialty behavioral 
system. So, those are the four elements. If this bill on 
Medicare would pass, it would fund adequately part of that. It 
would not fund the case management function or the psychiatrist 
consultation function, which I think is key to all of this 
research elements, all four elements that I listed. Part of 
this would allow many elderly Americans to stay and get their 
treatment within the primary care office, not have to move all 
the way over.
    Mr. CAMP. Are not some of those services covered under 
Medicare advantage plans?
    Dr. HARBIN. I am not sure whether they are or not.
    Mr. CAMP. Does anyone in the panel know that? Do some of 
the Medicare advantage plans cover case management and other 
issues in your--if you don't know, that is fine. It may be out 
of the scope----
    Dr. HARBIN. I am not sure. They may do that. It may not be 
a required service but I would say this recommendation of 
collaborative care was part of the recommendations of the New 
Freedom Commission, it was also part of the recommendation of 
the National Business Group for fully managed plans in those 
blocks of business. So, it is often not implemented fully, even 
where they fully managed care structure.
    Mr. CAMP. Are not some of the services that we have talked 
about, such as case management treatment planning and others, 
covered under Medicaid?
    Mr. MANDERSCHEID. Yes. Some of those services are covered 
under Medicaid. A point that has not come out here today is the 
fact that there is overlap in the Medicaid and Medicare 
populations. Changes to Medicare can have a salutary effect on 
Medicaid costs, and that idea needs to be put on the table as 
well with the Congressional Budget Office. Let me say one----
    Mr. CAMP. I just want to follow up on that. But salutary 
effect, my question is, by putting these benefits under 
Medicare, are we not creating an opportunity for States to 
shift their costs, their current spending under the Medicare 
program from Medicaid?
    Mr. MANDERSCHEID. I don't believe so. You would need to 
structure the program so that that would not, in fact, happen. 
I wanted to say one additional word about collaborative care. A 
recent study done by the National Business Group on Health 
looking at the interface between mental health and primary care 
found that the use of a care manager could be very salutary in 
coordinating the two pieces of care we need to bring together, 
and we need to keep that idea on the table here as well.
    Mr. CAMP. All right. Thank you very much. I see my time has 
expired. Thank you, Mr. Chairman.
    Chairman STARK. Mrs. Tubbs Jones.
    Ms. TUBBS JONES. Mr. Chairman, I am going to yield any 
questions. I thank you all for your testimony, and it is clear 
that our entire Committee believes that this is an area that we 
need to focus in on, and having experts like you to testify and 
give us some guidance is really helpful. I thank you, Mr. 
Chairman. Yield back.
    Chairman STARK. Mr. Ramstad.
    Mr. RAMSTAD. Thank you, Mr. Chairman. I want to thank all 
three of you distinguished doctors for being here today and for 
the outstanding work you do in the field. You all contribute a 
great deal in the area of mental health and chemical addiction. 
I guess, Dr. Goplerud, I will start with you. I am most 
familiar with your outstanding work, expanding access to 
treatment for people with chemical addiction. I know that 
ensuring solutions to alcohol problems, the organization you 
head, is truly at the forefront of this debate nationally, and 
you are certainly--as the other two distinguished doctors are--
you are a true expert in the field.
    I want to ask you two questions. First, I know you have 
studied the economic impacts of the issue of untreated 
addiction. I cited earlier the cost of $550 billion last year, 
estimated according to the Brandeis study and the NAMI study, 
National Association For Mentally Ill, the costs of untreated 
mental illness and addiction. Could you elaborate on those 
costs and what form they take and so forth? I am sure you are 
familiar with those studies and that number.
    Mr. GOPLERUD. Sure. Perhaps one of the most remarkable 
numbers is that about $26 billion a year is spent for the 
treatment of alcohol-related health care problems. Of that $26 
billion, only $1 out of $5 goes for the actual payment of 
treatment for the alcohol problem itself. The other $4 out of 
$5 go for the payment for the injuries and illnesses that are 
associated with untreated alcohol problems.
    So, the costs simply of treating the health care 
consequences is at least $19 billion every year, a tiny 
fraction of which goes into actual health care. Now, many of us 
carry around these little items, BlackBerrys, blueberries, 
Trios, et cetera. If you go out to Research in Motion's Web 
site, they will tell you that for every dollar you invest in 
this, you get about $2 back in increased productivity, not 
counting all the family distress that it happens. For the 
treatment of alcohol problems, the return on investment is 
about $2.60 or a better investment than an investment in one of 
these things. Thank you.
    Mr. RAMSTAD. The second question--and thank you for your 
response, Dr. Goplerud. The second question I had concerns the 
Medicare program and the focus of the second bill we are 
discussing here today, albeit a little bit obtusely. But has it 
been your experience, and actually those doctors who could 
comment as well whether early screenings and diagnoses of other 
illnesses result in a cost savings for the Federal Government? 
I would just cite the mammograms under Medicare, the PSAs 
required under Medicare. Do such early screenings and early 
diagnoses of other illnesses result in the cost savings for the 
Federal Government? Is there anything to substantiate that 
assertion?
    Mr. GOPLERUD. It is very clear that early identification is 
better than treatment for the catastrophic consequences. One of 
the peculiar things with the current Medicare benefit is that 
the required or strongly recommended in the welcome to Medicare 
preventive screen is screening for alcohol, drug and 
depression. However, if a physician identifies any of that, you 
would--the treatment would be subject to the 50 percent copay. 
In other words, it would be very difficult to actually pay for 
the care that you are identifying in the free service.
    Mr. MANDERSCHEID. I agree with Dr. Goplerud. The 50 percent 
copay is the major inhibitor to conducting such screening. 
There are excellent screening tools available at the present 
time. One of those for adults is the PHQ 9, which is 
recommended by the Centers for Disease Control.
    Mr. RAMSTAD. I should have asked the second half of my 
question, the first half merely being a preface to my main 
question, that is whether these savings could be applied to 
earlier screenings, earlier diagnosis of chemical addiction.
    Mr. MANDERSCHEID. I think we have a big hill to climb up to 
move our treatment system from one that focuses on mainly long-
term disaster oriented chronic care to early intervention, 
preventive interventions and screening, and we have to climb 
over that hill to get there. Once we get there, and we do these 
screenings much earlier, mammograms, colonoscopies, screening 
for depression, then I think you will begin to see cost savings 
as a result of that. I don't think you would see cost savings 
in the initial few years because we have the hill to climb over 
here. Thank you.
    Dr. HARBIN. I would like to speak to one aspect of that, 
which is the need to screen earlier and more effectively for 
chronic medical problems. As I mentioned earlier, that group 
with diabetes, the 20 percent or so recipients or people who 
have that disease are costing more than 60 percent of the 
dollars in every health insurance program, Medicare and so on. 
Thirty to 50 percent of that group has a comorbid depression, 
and that group appears to cost in study after study about 
double on the medical spending than the person who just has 
diabetes without depression. So, I think it is imperative to 
try to screen and treat the depression aspect in order to have 
the cost savings on the medical side.
    Mr. RAMSTAD. Well, thank you again to all three of you 
distinguished gentlemen for your testimony. Yield back, Mr. 
Chairman.
    Chairman STARK. Mr. Becerra?
    Mr. BECERRA. Thank you, Mr. Chairman. Doctors, thank you 
very much for your testimony today. I am not sure most people 
recognize that there is an issue of addiction or substance 
abuse among our Medicare population. Most of us would say 
Medicare beneficiaries, oh, substance abuse, do not go 
together. Can any of you tell us--either of you tell us what 
you know about the prevalence of substance use or abuse among 
the Medicare population?
    Mr. GOPLERUD. Yes. Although the problems associated with 
drinking or with drug use are much smaller for the Medicare 
population than they are for say 21-year-olds, there still is a 
substantial alcohol and drug problem among our elders. 
According to the National Survey on Drug Use in Health, a 
Federal survey, about 3.2 percent of persons over 65 drink 
heavily, and 0.7 percent, just about 1 percent of seniors 
misuse prescription drugs. Now, you take them together, about 4 
percent of seniors have a serious alcohol or drug use problem, 
yet in the Medicaid program, only two beneficiaries per 
thousand are identified and receive even one chemical 
dependency service a year.
    Mr. BECERRA. That is .2 percent.
    Mr. GOPLERUD. .2 percent, or in other words, about one in 
20, who has a serious problem gets even one service for that 
problem, and I believe that that is directly attributable to 
the benefit problem.
    Mr. BECERRA. Actually, I find it healthy that our 
discussion here has focused almost exclusively on how we get to 
a parity level for mental health services. But I know that some 
folks are out there still have on their mind this issue of 
abuse of the system of the benefit if you get to the point of 
offering mental health services at the same level that you 
offer other health services, physical health services. I wonder 
if you can comment on the possibility of fraud or abuse that 
might lead to overutilization of certain services or abuse of 
use--or use of services in ways that are not meant to be 
provided, yes, Dr. Harbin.
    Dr. HARBIN. I would like to respond to that. One of the 
reasons I shared my prior experience with these two national 
managed care health companies, that was our responsibility, we 
were at risk for the mental health and substance abuse spending 
for all of these many millions of Americans. So, it was a daily 
focus about whether people were abusing. I know their services. 
I know when I first started with Green Spring Health Services 
in particular, I sort of had the same view, even as a 
psychiatrist, there was going to be a lot of use of 
psychoanalysis, the classic stereotype of mental health, Woody 
Allen is going to spend 20 years on the couch five times a 
week.
    I was positively surprised to see it was very rarely used, 
some of those employers did have a psychoanalytic benefit and 
we actually set up a psychoanalytic review program for that. It 
was very rare that somebody used that, and we found that the 
outpatient services in particular echo what Dr. Manderscheid 
said. The problem is not getting people to use them enough and 
early enough. You have to have some level of management. It 
does not need to be too intrusive of the benefit, but it is 
just an old issue. There was a problem of overuse of inpatient 
services in the 1970s and 1980s when many of these commercial 
insurers were spending 70 and 80 percent of all of their 
dollars on the inpatient level of care. That has changed. This 
is just not an issue at this point, and so----
    Mr. BECERRA. Can you give us more specifics about what has 
changed or what we did to change that so that we could avoid 
that type of overutilization?
    Dr. HARBIN. Well, I think frankly the managed care 
intervention in the last 20 years both on commercial insurance 
and Medicaid and some degree Medicare has changed--helped 
change practice patterns. Also providers and science has 
pointed to the alternatives to inpatient care, are cost 
effective. I mentioned my experience in the public sector. The 
progress was light years ahead of the private system in 
Medicare, often because they created a whole range of 
alternative community-based services that were quite cost 
effective.
    So, it is a mixture of science, management interventions 
and recognitions by providers. I think it would be very 
difficult to go back to where we were 20 years ago where 
everybody got put in the hospital. That is appropriate for 
certain people for a period of time. But it was the first offer 
often for many people.
    Mr. BECERRA. Thank you very much for your testimony. We 
appreciate your comments. Mr. Chairman, I yield back.
    Chairman STARK. Mr. Ramstad, did you have a further 
inquiry?
    Mr. RAMSTAD. I don't have any further questions, Mr. 
Chairman. But before we adjourn, I would just like to ask 
unanimous consent to speak out of order for 1 minute.
    Chairman STARK. Please.
    Mr. RAMSTAD. If you want, I don't have any further 
questions for this panel.
    Chairman STARK. You are recognized.
    Mr. RAMSTAD. Oh, thank you, Mr. Chairman. Mr. Chairman, 
before we close this hearing and again, I want to thank you and 
Ranking Member Camp for holding this hearing today, I made a 
promise to a young man who attended, I think, 7 of our 12 field 
hearings. We have been everywhere from California to New York 
and Texas to Minnesota and Rhode Island and everyplace in 
between. A young man who happens to be in a wheelchair, 
paraplegic named Steve Winter, if you read any of the field 
hearing testimony, read the testimony of Steve Winter. I think 
it pretty much sums up what we are all about in this 
legislation. Steve Winter is probably a young man about 35 now, 
and he started showing up at these field hearings, and Patrick 
and I befriended him and like I said, he came to a number of 
them at his own expense and was never on the witness list, but 
we always had him testify after hearing his compelling story.
    He testified about how when he was in high school--he is 
from Arizona, and he was going to high school and Steve Winter 
woke up one morning with a burning sensation in his back, and 
he went to the kitchen table as he did every morning to have 
breakfast with his sister and his mom and his dad, and he said 
to his mother, I am not feeling right today. Something is 
burning, and he reached back and he brought his hand forward, 
and it was full of blood. Just then his mother raised a pistol 
in his face and said, I am going to take you with me. Your 
sister is already in heaven. I am going to take you and you and 
I are going to join your sister in heaven. Well, he said, mom, 
put the gun down. Mom, put the gun down, and he was able to 
convince her to put the gun down.
    Unfortunately the bullet pierced his spinal cord and he is 
confined to that wheelchair for life. But he was asked at the 
hearing, do you have animosity toward your mother who is still 
alive today, and he said no because my mother didn't shoot me 
while I was sleeping in bed. Her mental illness shot me. What 
had happened is she had been treated for psychosis and 
depression, and the coverage was stopped for 3 months and it 
was during those 3 months that the demons came back and her 
mental illness took over and caused that horrible tragedy, and 
that tragedy, like the tragedy of Anna Westin, shouldn't happen 
in this land of ours, and there are things we can do to prevent 
those human tragedies.
    I believe this legislation that we have discussed here 
today at this hearing is one of those things we can do to 
prevent other people from suffering as Kitty Westin and her 
family has, Steve Winter and his family has. Thank you, Mr. 
Chairman. Yield back.
    Chairman STARK. Thank you for your remarks, and I want to 
thank the panel for their contributions. If there is no further 
inquiry, the hearing is adjourned.
    [Whereupon, at 12:28 p.m., the hearing was adjourned.]
    [Submissions for the Record follow:]
    Statement of American Academy of Child and Adolescent Psychiatry
    The American Academy of Child and Adolescent Psychiatry (AACAP) is 
a medical membership association established by child and adolescent 
psychiatrists in 1953. Now over 7,600 members strong, the AACAP is the 
leading national medical association dedicated to treating and 
improving the quality of life for the estimated 7-12 million American 
youth under 18 years of age who are affected by emotional, behavioral, 
developmental and mental disorders. AACAP's members actively research, 
evaluate, diagnose, and treat psychiatric disorders and pride 
themselves on giving direction to and responding quickly to new 
developments in addressing the health care needs of children and their 
families.
    AACAP would like to thank House Ways and Means Health Subcommittee 
Chairman Pete Stark for holding this hearing. We appreciate his 
interest in mental health and substance abuse parity and its impact on 
our health care system. Thank you for the opportunity to submit a 
written statement for the record.
Statement on Mental Health Parity
    While almost one in five children in the United States suffers from 
a diagnosable mental disorder, only 20 to 25 percent of these children 
receive treatment.\1\ This is a troubling fact considering treatment of 
many mental disorders has been deemed highly effective. According to 
the National Alliance on Mental Illness, between 70% and 90% of people 
with serious mental illnesses have a significant reduction of symptoms 
and improved quality of life with a combination of pharmacological and 
psychosocial treatment.
---------------------------------------------------------------------------
    \1\ U.S. Department of Health and Human Services. Mental Health: A 
Report of the Surgeon General. Rockville, MD: U.S. Department of Health 
and Human Services, Substance Abuse and Mental Health Services 
Administration, Center for Mental Health Services, National Institutes 
of Health, National Institute of Mental Health, 1999.
---------------------------------------------------------------------------
    However, our current health care system fails to provide the most 
basic mental health services to children in need. In the United States, 
10% of children and adolescents suffer from serious emotional and 
mental disorders that cause significant functional impairment in their 
day-to-day lives at home, in school, and with peers.\2\ Furthermore, 
70% of youth involved in State and local juvenile justice systems 
throughout the country suffer from mental disorders.\3\ Children, as a 
group, tend to be high service users of health care services and are 
often involved in multiple agencies. This poses a challenge to managed 
care systems because children require services at various levels of 
intensity for extended periods of time. Due to the risk-adjustment 
strategies to protect the financial interests of managed care 
organizations, there is little incentive to offer parity for services 
for children with the most serious disorders. As a result, these 
children are often left underserved and responsibilities for care are 
shifted to other systems such as special education, child welfare and 
juvenile justice systems.
---------------------------------------------------------------------------
    \2\ Id.
    \3\ Blueprint for Change, National Center for Mental Health and 
Juvenile Justice, 2006.
---------------------------------------------------------------------------
    A New England Journal of Medicine study has shown that mental 
health and substance abuse treatment can be provided in health care 
plans at a negligible cost to employers.\4\ A more recent study submits 
that full mental health parity for children can be achieved without 
adversely affecting health care costs.\5\ The AACAP strongly supports 
Federal and State parity legislation that provides patients with access 
to the full range of appropriate evaluation and treatment services. The 
AACAP calls for the end of discriminatory insurance policies that limit 
access and help to perpetuate unnecessary stigma. Contractual limits on 
psychiatric outpatient visits and inpatient days, higher copayments/
deductibles, and annual and lifetime benefit limits create financial 
burdens and barriers to treatment for patients and their families. 
Financial obstacles should be the last burden that parents face when 
attempting to get the proper treatment and care for their ailing 
children.
---------------------------------------------------------------------------
    \4\ Goldman HH, Frank RG, Burnam MA, et al. Behavioral Health 
Insurance Parity for Federal Employees. N Engl J Med 2006; 354:1378-86.
    \5\ Arzin SA, Haiden HA, et al. Impact of Full Mental Health and 
Substance Abuse Parity for Children in the Federal Employees Health 
Benefits Program. Pediatrics. 2007; 119(2):452-459.
---------------------------------------------------------------------------
Access to Care
    Lack of access to specialty mental health services, including child 
and adolescent psychiatrists, is a major problem when seeking mental 
health care in this country. As the President's New Freedom Commission 
on Mental Health has stated, there is a shortage of psychiatrists and 
other mental health professionals trained to diagnose and treat 
children and adolescents nationwide. The shortage of these specialists, 
and all other health care professionals, is particularly severe in 
rural and urban areas. The AACAP calls for legislation that would 
provide incentives to individuals interested in education in the field 
of children's mental health. The AACAP has been active in the promotion 
of comprehensive community-based systems of care across health, 
education, child welfare and juvenile justice systems for children and 
adolescents with mental illness. These programs should include 
consultation with mental health specialists through telemedicine or bi-
monthly office visits, which are needed to ensure appropriate mental 
health care for children.
Conclusion
    Mental health is integral to the health and well-being of all 
children. It is time this is realized. Children coping with emotional 
and mental disorders must be identified, diagnosed, and treated to 
avoid the loss of critical developmental years that will never be 
recaptured. Mental health parity and improved access to care is a must 
for this Congress to enact.
    AACAP appreciates the opportunity to participate in this 
discussion. The AACAP applauds the Committee for its timely 
consideration of this important issue. Your continued leadership is 
pivotal to children and adolescents who suffer from the effects of 
mental illness. We strongly urge the Committee to support the passage 
of the Paul Wellstone Mental Health and Equitable Treatment Act of 
2007.

                                 
       Statement of American Association for Geriatric Psychiatry
    The American Association for Geriatric Psychiatry (AAGP) commends 
the Health Subcommittee of the House Committee on Ways and Means 
holding this hearing on parity for mental health benefits under both 
private-sector health benefit plans and the Medicare system. AAGP 
welcomes the opportunity to share its views on this important issue.
    AAGP is a professional membership organization dedicated to 
promoting the mental health and well-being of older Americans and 
improving the care of those with late-life mental disorders. AAGP's 
membership consists of about 2,000 geriatric psychiatrists as well as 
other health professionals who focus on the mental health problems 
faced by senior citizens.
    The Medicare law of 1964 defined outpatient treatment of ``mental, 
psychoneurotic, and personality disorders'' as covered services for 
eligible recipients. While the initial language did not discriminate 
between psychiatric conditions and classic medical conditions, the 
implementation of subsequent language and policy resulted in these two 
classes of illness categories being managed in very different manners. 
The most important remaining difference is that Medicare requires a 
beneficiary copayment of 50 percent of outpatient psychiatric services, 
as opposed to the 20 percent copayment required for medical outpatient 
services. This discriminatory policy is not supported by current 
scientific, medical, or social knowledge. As our understanding of 
behavior and brain function has so greatly expanded over the last 40 
years, our Nation's Medicare policy needs to be updated not only to 
rectify ongoing discrimination to this vulnerable population but also 
to recognize that untreated mental disorders complicate other medical 
conditions, leading to unnecessary additional suffering and costs.
Background
    At the time of the initial passage of the Medicare statute, the 
inclusion of coverage for mental health care was seen as quite 
progressive since many private insurance plans had not yet provided any 
such coverage. The lack of private coverage then was a result of 
several factors. First, much of the care at the time was provided in 
publicly funded State mental hospitals or community clinics which did 
not bill insurance plans. Second, the dominant model of outpatient 
psychiatric treatment was psychoanalysis, which was very intensive and 
expensive and was not seen as ``medical treatment.'' Third, the 
experience of those plans that did provide coverage (such as the Screen 
Actors Guild) was that utilization was high and so were the resulting 
expenditures.
    Partly as a result of the latter experience and in order to control 
costs, Medicare effectively required that beneficiaries pay a 
coinsurance of 50 percent for outpatient psychiatric services in 
contrast to the 20 percent coinsurance required for any other covered 
service. A number of enhancements have been made to the psychiatric 
benefit over the years, including lifting the original $250 cap on 
outpatient psychiatric services to reflect inflation and a realistic 
understanding of the needs of psychiatric patients. However, the 
copayment for outpatient psychiatric services has not changed, thus 
perpetuating discriminatory treatment of individuals with mental 
illness.
Changes in Mental Health Treatment
    Much has changed in the area of mental health treatment since the 
original enactment of Medicare more than 40 years ago:

      The explosion of knowledge about the biologic basis for 
most mental illness and the development of evidence-based treatments 
have become the dominant model of outpatient psychiatric treatment 
rather than psychoanalysis.
      Most psychiatric treatment is provided in community-based 
office settings rather than in publicly funded inpatient facilities.
      Most private insurance plans now cover outpatient 
psychiatric treatment, although in many instances there are still 
discriminatory practices relative to coverage of other medical 
conditions, a problem that is the focus of Federal legislative efforts 
for reform.
      Many States now require parity in mental health coverage 
for plans governed by State insurance statutes. In 1996, the Congress 
enacted and the President signed the Mental Health Parity Act, which 
requires parity for annual and lifetime limits on coverage for mental 
illness. As a result of these parity statutes and regulations, there is 
now a considerable body of data which show that implementation of 
mental health parity results in minimal incremental costs. For example, 
in the Federal Employees Health Benefits Program, it is estimated that 
parity implementation resulted in a 1.64 percent premium increase for 
fee-for-service plans and a 0.3 percent increase for health maintenance 
organizations.
      There is increasing recognition that mental illnesses are 
just as real and treatable as many other medical conditions.

Reimbursement Issues and the Effect on Patient Care
    Patient Access Barriers: The Medicare requirement that 
beneficiaries pay 50 percent of the charge for outpatient psychiatric 
services in contrast to the 20 percent copayment required for any other 
covered service is outdated and not consistent with modern medical-
psychiatric treatment and Medicare's intent with regard to medically 
necessary services. The effective 50 percent copayment exacts an 
increased out-of-pocket cost for beneficiaries who seek services that 
they expect will be covered like other health care services they 
receive. To the extent beneficiaries cannot afford this added cost, it 
keeps them from getting medically necessary services.1-4
---------------------------------------------------------------------------
    \1\ Med Care. 2006 Jun; 44(6):506-12. ``The impact of parity on 
major depression treatment quality in the Federal Employees' Health 
Benefits Program after parity implementation.'' Busch AB, Huskamp HA, 
Normand SL, Young AS, Goldman H, Frank RG.
    \2\ Med Care. 2006 Jun; 44(6):499-505. ``The effects of State 
parity laws on the use of mental health care.'' Harris KM, Carpenter C, 
Bao Y.
    \3\ Med Care. 2006 Jun; 44(6):497-8. ``Mental health parity, 
access, and quality of care.'' Druss BG.
    \4\ N Engl J Med. 2006 Mar 30; 354(13):1378-86. Comment in: N Engl 
J Med. 2006 Mar 30; 354(13):1415-7. ``Behavioral health insurance 
parity for Federal employees.'' Goldman HH, Frank RG, Burnam MA, 
Huskamp HA, Ridgely MS, Normand SL, Young AS, Barry CL, Azzone V, Busch 
AB, Azrin ST, Moran G, Lichtenstein C, Blasinsky M.
---------------------------------------------------------------------------
    It is important to note, as well, that studies have shown that 
untreated depression greatly increases the severity and costs 
associated with other medical conditions, such as heart disease and 
diabetes. Among older adults, comorbidities of this sort are the rule, 
not the exception, among those who suffer from depression.
    Provider Disincentives: Geriatric mental health services are 
inadequate in many areas. The psychiatric limitation contributes in a 
major way to this state of affairs. The reality that, in many 
instances, the 50 percent actually paid by Medicare will amount to 
payment-in-full imposes a financial burden on health care providers, a 
circumstance that, in turn, imposes a profound barrier to access to 
needed care.
    These barriers also affect delivery of mental health care in the 
primary care sector, where most mental health care is actually 
provided. The psychiatric limitation makes primary care physicians 
reluctant to spend the time needed to address mental health 
problems.\5\ When psychiatric problems are addressed, services are 
often coded diagnostically for established medical illnesses (e.g., 
diabetes) rather than the psychiatric problem, in order to avoid the 
psychiatric fee reduction. This coding skews Medicare claims data on 
the utilization of health care services for mental health problems.
---------------------------------------------------------------------------
    \5\ Texas A&M University Health Sciences Center. Podium 
presentation. ``One-and-a-Half-Minute Mental Health Care: Inside 
Primary Care Visits.'' Ming Tai-Seale, PhD, MPH; Thomas McGuire, PhD; 
Christopher Colenda, MD, MPH; David Rosen, MD; Mary Ann Cook, PhD.
---------------------------------------------------------------------------
    Addressing these problems will be crucial over the next 25 years, 
as the Baby Boomer population reaches Medicare eligibility. By the year 
2010, there will be approximately 40 million people in the United 
States over the age of 65. Over 20 percent of those people will 
experience mental health problems. A national crisis in geriatric 
mental health care is emerging and has received recent attention in the 
medical literature. While many different types of mental and behavioral 
disorders can occur late in life, they are not an inevitable part of 
the aging process. However, these Medicare beneficiaries must have 
access to mental health professionals with expertise in geriatrics.
    The chart below, derived from U.S. Census Bureau statistics, 
demonstrates the sharp increase expected in the older population, and 
especially those over age 85, whose health care needs are particularly 
difficult to meet absent geriatric training:


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Dual Eligibles: Another complication arises as a result of the use 
of State Medicaid funding to cover the copayment for financially 
disadvantaged Medicare recipients (dually eligible). Often the amount 
paid by Medicaid for these dually eligible recipients is minimal or 
disallowed altogether. This occurs because the allowed Medicaid rate is 
often near or below 50% of the Medicare allowed charge. This variation 
in allowed payment rate results in an effective decrease in revenues 
for those providing psychiatric care to the dually eligible Medicare/
Medicaid population. As socioeconomic status and severity of 
psychiatric illness are highly correlated, those psychiatric 
specialists whose expertise is most needed for these more seriously ill 
patients experience a disproportionate amount of financial burden.
    Coding Problems: These problems are further exacerbated and 
complicated by regionally varying rules regarding how the copayment is 
applied. Depending on the State, this variation in copayment is applied 
either to mental health providers, specific ``psychiatric'' diagnosis, 
or the type of CPT code utilized. Some Medicare carriers apply the 
psychiatric limitation based on the ICD-9 diagnosis code utilized. In 
some illnesses, two differing ICD-9 codes exist, one for ``medical'' 
care and another for ``psychiatric'' care. For example, 310 is the 
``medical'' code for depression while 296.XX is the ``psychiatric'' 
code for Major Depression. The ICD-9 code 331 is defined as a 
neurologic code for dementia while 290.XX is the psychiatric code for 
senile or presenile dementia. Thus the particular code chosen can 
determine whether the psychiatric limitation applies for a particular 
Medicare carrier. Other carriers apply the psychiatric limitation 
strictly to mental health specialists even when the actual service 
delivered, CPT code chosen, and ICD-9 diagnosis is essentially 
identical to that used by a non-psychiatric physician and disregarding 
the fact that psychiatry itself is a medical specialty. Some carriers 
require that mental health professions use only psychiatric CPT codes. 
These practices are discriminatory to both mental health professionals 
as well as all those who are more seriously ill and require the 
additional expertise of the specialist.
The Cost of Inadequate Care
    Major depression in late life is common, affecting 5-10% of 
patients in primary care. However, it is rarely the patient's only 
health problem; it may co-exist with chronic pain (40-60%), cancer (10-
20%), neurologic disorders (10-20%), diabetes (10-20%), heart disease 
(20-40%), and geriatric syndromes (20-40%). Medical illnesses with 
depression have been shown to have worse outcomes--greater symptom 
burden, disability, complications, mortality, and cost for all health 
services. It is a major barrier for effective chronic disease 
management; a recent diabetes study demonstrated that depression meant 
poorer adherence to medications, more obesity and smoking, less 
exercise and healthy eating, and higher blood sugar levels.\6\ Total 
health care costs are 50% higher for patients with depression, even 
after adjusting for comorbid medical illnesses.7,}8 And 
depression is deadly; older adults have the highest rate of suicide in 
the United States.
---------------------------------------------------------------------------
    \6\ Annals of Family Medicine. 2006; 4:46-53. ``Effects of Enhanced 
Depression Treatment on Diabetes Self-Care.'' Elizabeth H.B. Lin, MD, 
MPH, et al.
    \7\ JAMA. 1997 May 28; 277(20). ``Depressive symptoms and the cost 
of health services in HMO patients aged 65 years and older. A 4-year 
prospective study.'' Unutzer J.
    \8\ Arch Gen Psychiatry. 2003; 60:897-903. ``Increased Medical 
Costs of a Population-Based Sample of Depressed Elderly Patients.'' 
Katon WJ, et al.
---------------------------------------------------------------------------
    Depression can be treated with medications or psychotherapy, but 
only half of depressed older adults are ``recognized'' and even fewer 
are treated. Older men, African Americans, and Latinos have 
particularly low rates of depression treatment. Most older adults 
prefer treatment by their primary care physicians. However, in this 
setting, there is an increasing use of antidepressants but treatment is 
often not effective, due to early treatment dropout, staying on 
ineffective medications too long, and little access to psychosocial 
treatments. On the other hand, programs for collaborative care for 
depression in primary care settings have been shown to be more 
effective, consistently, than usual care, if the programs include 
active care management (not case management), support of medication 
management in primary care, and psychiatric consultation.\9\
---------------------------------------------------------------------------
    \9\ Arch Intern Med. 2006; 166:2314-2321. ``Collaborative Care for 
Depression: A Cumulative Meta-analysis and Review of Longer-term 
Outcomes.'' Gilbody, et al.
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Recommendation
    AAGP strongly supports this legislation to amend Medicare law to 
provide for the same support for treatment of mental illness as would 
be standard for any medical illness. Passage of parity would not only 
improve the quality of care and life for those suffering with mental 
illness but would end the existing practice that unfairly penalizes 
practitioners who choose to serve this population and discourages new 
practitioners from entering the field.

                                 
   Statement of American Association for Marriage and Family Therapy
    Chairman Stark, Ranking Member Camp, and other Subcommittee 
Members, on behalf of our 24,000 members, the American Association for 
Marriage and Family Therapy (AAMFT) appreciates this opportunity to 
submit comments for the record of the Subcommittee's hearing on mental 
health and substance abuse parity in Medicare and private health plans. 
AAMFT is the sole national organization representing the 50,000 
licensed Marriage and Family Therapists (MFTs), and the profession of 
Marriage and Family Therapy is one of the five federally-defined ``core 
mental health professions.''
    Health insurance is supposed to protect consumers from catastrophic 
financial expenses when they experience major illnesses. But under 
current Federal law, neither Medicare nor private health insurance 
plans are required to provide full parity in mental health or substance 
abuse benefits in comparison to coverage of physical illnesses. So 
current law exposes millions of Americans and their families to 
financial ruin when they incur a major mental health or substance abuse 
impairment, even though behavioral health treatment is effective and a 
relatively inexpensive share of total health care spending. And because 
of the paucity of third-party coverage, there are widespread shortages 
of mental health practitioners in lower-income areas, especially in 
rural and inner-city locales.
    As a result, each year, millions of Americans do not receive needed 
behavioral health treatment. This situation is simply unacceptable in a 
country that has the most wealth and the most advanced health care 
system in the world. That is why AAMFT strongly endorses the following 
legislation:

      The Medicare Mental Health Modernization Act, H.R. 1663, 
by Reps. Stark, Ramstad and Kennedy, which would make a number of 
improvements to Medicare, including adding coverage of MFTs under Part 
B.
      The Seniors Mental Health Access Improvement Act, H.R. 
820, by Reps. Towns and Pickering, which also would add coverage of 
MFTs under Part B.
      The Paul Wellstone Equitable Mental Health Treatment Act, 
H.R. 1424, by Reps. Kennedy, Ramstad and 257 other House Members, which 
would require private health plans to set all coverage conditions for 
behavioral health benefits in the same fashion as for physical 
illnesses.

    We would like to focus our comments on how these bills would 
improve access to MFTs and other behavioral health care providers. 
Among 1,253 rural U.S. counties with 2,500 to 20,000 people, nearly 
three-fourths lack a psychiatrist, 58 percent have no clinical social 
worker, and 50 percent lack a master's or doctoral psychologist. The 
supply of all these professionals is far lower in the 769 rural 
``frontier'' counties with fewer than 2,500 people. Further, the HHS 
Health Resources and Services Administration indicates that 90% of 
psychiatric and mental health nurses with graduate degrees are in 
metropolitan areas.
    There are many counties where only a marriage and family therapist 
is present to serve the elderly population. A targeted study of 
licensed professionals in a sampling of States found many counties with 
no Medicare mental health providers, but with a marriage and family 
therapist, including Clayton, Iowa; Hamilton, Florida; Hutchinson, 
Texas; and Brunswick, Virginia, to name only a few.
    In addition, our profession is working diligently to increase the 
supply of MFTs in areas with concentrations of ethnic minorities. As 
two examples of this, MFTs are eligible for placement in underserved 
inner-city areas as part of the National Health Service Corps, and 
ethnic-minority MFT students are now eligible for scholarships under 
the HHS Substance Abuse and Mental Health Services Administration's 
Minority Fellowship Program.
    MFTs are legally authorized through State licensing laws to treat 
mental illness. They are required to obtain a master's degree in a 
mental health discipline and 2 years post-graduate supervised clinical 
experience, much like existing Medicare-covered mental health providers 
such as clinical social workers. H.R. 1663 and H.R. 820 would not 
change Medicare's mental health benefit or modify the MFT scope of 
practice, but would merely allow Medicare beneficiaries who need 
medically necessary covered mental health services to obtain those 
services from a marriage and family therapist. In other words, these 
bills would increase the pool of qualified providers that Medicare 
beneficiaries can choose from without change to the services.
    In addition, to minimize costs, H.R. 1663 and H.R. 820 would set 
MFT Part B payment rates at 75% of the corresponding amounts allowed 
for psychiatrists and psychologists for the same services. This 75% 
level is the same as applied to clinical social workers, who--as with 
MFTs--also must have a minimum of a master's degree in order to be 
Medicare-eligible. Staff of the Congressional Budget Office (CBO) 
estimate that the cost of covering MFTs under Part B would be 
approximately $9 million annually.
    Legislation for Medicare MFT coverage has twice passed the U.S. 
Senate, as its original Medicare Modernization Act (S. 1) in 2003 and 
its original Deficit Reduction Act (S. 1932) in 2005. But this 
provision was dropped both times in conference with the House, despite 
the fact that in the previous Congress, 137 House Members cosponsored 
one or more bills that included Medicare MFT coverage.
    AAMFT believes the current limits on Medicare's mental health 
benefit contribute to the elderly's suicide rate being 50% greater than 
for the under-65 population. Thus, we also support the other provisions 
of H.R. 1663, such as reducing the current Part B beneficiary copayment 
for mental health services from 50% to 20% in order to achieve parity 
with the 20% copayment rate for other services.
    Likewise, we applaud the private health plan parity provisions of 
H.R. 1424. As shown by a federally-funded study of the Federal 
Employees Health Benefit Program, parity would increase health plan 
costs for under-65 enrollees only about 1%, a small price to obtain 
financial protection for millions of Americans.
    In addition, although CBO rules prohibit ``dynamic'' cost estimates 
that account for indirect savings from new legislation, there is 
extensive scientific research showing that mental health treatment has 
a substantial ``offset'' savings effect by reducing future costs for 
physical illnesses. In addition, parity will reduce employers' costs 
for sick leave and disability pay, and will improve the quality of life 
for millions of Americans. Thus, we believe behavioral health parity in 
both Medicare and private health plans would be cost-effective.
    In summary, we applaud the Subcommittee for holding this important 
hearing, and thank Chairman Stark for his leadership on these issues. 
As shown by the bipartisan support for H.R. 820, H.R. 1588 and H.R. 
1663, equity in behavioral health insurance coverage is not a partisan 
issue. We urge the Subcommittee to favorably report these bills at the 
earliest possible time and look forward to working with Subcommittee 
Members as you address this urgent issue. Thank you for your 
consideration.

                               __________

    Required Supplemental Sheet--Hearing on Mental Health and Substance 
Abuse Parity 3/27/07
    Submitting Organization: American Association for Marriage and 
Family Therapy
    Address: 112 S. Alfred St., Alexandria, VA 22314
    Contact: Brian Rasmussen, Government Affairs Manager, (703) 253-
0463; [email protected]
    Fax: (703) 253-0506
                                 
             Statement of Amy Kuehn, Indianapolis, Indiana
    My name is Amy Kuehn and I live in Indianapolis, Indiana. I have 
two sons. Nicholas is 11 years old and Matthew is 8 years old. Nicholas 
has been diagnosed as being on the autism spectrum with Asperger's and 
also has ADHD. My children have Medicaid for insurance. The Governor of 
Indiana, Mitch Daniels, declared earlier this year that mental 
illnesses on the autism spectrum would no longer be covered by the 
Medicaid insurance. This leaves my family, along with countless others, 
floundering in the mental health system. Riley Children's Hospital, 
which has an entire department devoted to diagnosing and treating 
Autism Spectrum Disorders (ASD) can no longer accept children and 
adolescents who have Medicaid, who only qualify for this insurance 
because of low income, unless the parents pay the $150 appointment fee 
out-of-pocket. Obviously, most of us are unable to afford to do this 
while we are desperately trying to seek treatment for our children so 
that they can function to their fullest potential in society. This 
decision is a huge obstacle for even mediocre parents.
    For our own family, Nicholas is in bi-weekly therapy, which is only 
being covered because his treatment team is listing ADHD as his primary 
diagnosis. The truth of the matter is that the ADHD is just an offshoot 
of his Asperger's. Nick lacks social skills, has great difficulty with 
school, has no friends, completely failed the standardized tests that 
will be used to determine if he graduates, and as things are going now, 
will be unable to live independently or even semi-independently upon 
entering adulthood. Although he is 11 years old, he is emotionally 
younger than my 8 year old. I sent him to a social skills day camp last 
summer that was on a sliding scale. Even with that scale, it was far 
too expensive since Medicaid would not pay at all. The only way that he 
was able to attend was that my parents paid for it. This is not their 
job. We pay the Medicaid insurance premiums but the services that we 
are offered are severely limited and do not meet the needs of my son. 
Insurance is not helping my son to grow to his potential and I have no 
recourse because the laws, as they stand, do not allow for it.
    The rates of prevalence and incidence of autism just last year were 
1 out of 166. Now it is 1 out of 150. With the increased prevalence and 
incidence, it would make sense that there would be a push for increased 
services, but the opposite is happening. Because my son needs so much 
one-on-one assistance for nearly everything that he does and because he 
has so many appointments, I am unable to work outside the home. This 
puts our family into even worse financial straits. Without adequate 
services and treatment, Nick will be a consumer of disability services 
throughout his adult life and will most likely be a recipient of SSI. 
As things stand, he will not be a productive member of society, despite 
his desires to do so.
    I do not have any understanding how Governor Daniels was able to 
single out autism and stop Medicaid coverage for it. He referred to it 
as a mental health issue, but in truth, autism is a neurological 
disorder. This certainly seems counter-intuitive for a governor who 
places much of his reputation on being financially responsible since 
the obvious result from parental loss of productivity will increase 
leading to a greater need for public assistance for families for now. 
Also, as our children grow older, they will also need increasing 
amounts of social assistance for assisted-living and other disability 
services.
    Passing mental health insurance parity which would include Medicaid 
and ASDs would help many of us to improve the quality of the lives of 
our children and lessen their future need for public assistance and 
disability benefits.
    Thank you very much for taking the time to review my testimony on 
such an important topic. I have submitted my testimony about my own, 
very costly mental illness through ANAD (National Association of 
Anorexia Nervosa and Associated Disorders) and my insurance's failures 
to help me which ended up costing my family so much that we had to file 
for bankruptcy in the amount of $200,000 in medical bills. That was in 
2001 and again, my bills are piling up because of the physical 
consequences of my 20+ year battle with anorexia and bulimia. This all 
seems never-ending even though I'm in solid recovery and committed to 
remaining this way. I really look forward to a positive outcome with 
this campaign and applaud the Honorable Patrick Kennedy and Honorable 
Jim Ramstad for taking the lead with this campaign.

                                 

                                 Therapeutic Communities of America
                                                     March 27, 2007

The Honorable Fortney ``Pete'' Stark, Chairman
U.S. House of Representatives
Committee on Ways and Means
Subcommittee on Health
Room 1102 LHOB
Washington, DC 20515

The Honorable Dave Camp, Minority Ranking Member
U.S. House of Representatives
Committee on Ways and Means
Subcommittee on Health
Room 11139 LHOB
Washington, DC 20515

    Dear Chairman Stark and Representative Camp:

    As you know, only 18.2% of all Americans over the age of 12 needing 
treatment actually receive it. This is a startling statistic and shows 
the need for public policy and community efforts to end discrimination 
and provide access to quality care earlier for individuals with 
substance use and mental health disorders. Equity legislation can 
assist with closing this treatment gap.
    Thank you for holding the hearing on March 27, 2007 on mental 
health and substance abuse parity. Therapeutic Communities of America 
(TCA) provides the following comments for your consideration. The 
introduction of the bill last week, to require parity in mental health 
services for Medicare beneficiaries and eliminate a 190-day limit on 
inpatient treatment and lowering the copay requirements will improve 
access for seniors to receive needed services that are client-based and 
will allow for better outcomes. It confirms the necessity to establish 
in publicly-funded programs equity for access and effectiveness.
    TCA member programs are mostly publicly funded through an array of 
public programs that weave and leverage public funding to provide 
client-based holistic addiction and mental health services to low 
income Americans. TCA member programs treat low income Americans from 
pregnant women to seniors in need of mental health and addiction 
services. TCA appreciates the importance of equity for mental health 
coverage for Medicare recipients and is respectful of the efforts of 
your Committee.
    Therapeutic communities receive limited third party private payer 
reimbursement and although not directly impacted by health plan parity 
bills our members through their experience know the importance to 
develop consistent bills that would not place additional limitations or 
consequence on public services by permitting reimbursement to be based 
on costs and not be based on patient-based clinical criteria and 
quality indicators. TCA has attached a list of safeguards that should 
be considered as any legislation is advanced for private health plan 
parity bills. Those concerns include preemption, medical necessity 
criteria, managed care, disclosure, and equity. The Paul Wellstone 
Mental Health and Addiction Equity Act of 2007 recently introduced 
addresses those concerns and we hope that the bill is not amended to 
weaken any of its current safeguards, and as such, those provisions in 
the bill remain through final passage. Your hearing demonstrates the 
Committee's understanding for policy that advances appropriate care to 
all our citizens.
    We respectfully request that as you work toward equity for mental 
health and substance abuse treatment and prevention services that you 
consider the principles of the National Institute on Drug Abuse (NIDA) 
for drug treatment effectiveness. NIDA research shows the importance of 
length of stay in treatment and other principles that should be 
protected to assure equity with other chronic illnesses. Some of those 
principles include:

      No single treatment is appropriate for all individuals.
      Effective treatment attends to multiple needs of the 
individual, not just his or her drug use.
      Remaining in treatment for an adequate period of time is 
critical for treatment effectiveness.
      Recovery from substance abuse can be a long process and 
frequently requires multiple episodes of treatment.
      Treatment of addiction is as successful as treatment of 
other chronic diseases such as diabetes, hypertension and asthma.
      Substance abuse treatment programs should be constructed 
on evidence-based methodologies that are outcome based and meet 
performance measures.\1\
---------------------------------------------------------------------------
    \1\ Based in part on Principles of Drug Addiction Treatment--A 
Research-Based Guide, National Institute on Drug Abuse, National 
Institutes of Health, and NIH Publication No. 004180.

    Depending on the stability and support an individual with a 
substance use disorder has within their environment; and the 
progressive stage of their disease, a patient will need criteria that 
understands the type, kind, duration, and multiple treatment needed by 
that person for recovery. It is important that a skilled service 
provider with specific training in addiction should do assessment, 
referral, placement, clinical determinations, and treatment of an 
individual with substance use disorders. Substance abuse treatment is a 
process that moves from motivation and stabilization to recovery as it 
is with other chronic diseases.
    TCA appreciates your commitment and your leadership on this 
important issue. Please contact us if we can provide additional 
information at (202) 296-3503.

            Sincerely,

                                                 Linda Hay Crawford
                                                 Executive Director

                               __________

    Therapeutic Communities of America (TCA), founded in 1975, 
represents over 600 programs across the country dedicated to serving 
those with addiction and mental health disorders. Therapeutic 
Communities provide a comprehensive continuum of care to patients, many 
of whom have multiple barriers to recovery, such as co-occurring mental 
illness, the homeless, adolescents, pregnant women, and HIV/AIDS. 
Therapeutic Communities also strive to help individuals secure family 
unification and successful welfare-to-work outcomes.
    The Therapeutic Community methodology of treatment was established 
in the late 1950's, addressing the entirety of social, psychological, 
cognitive, and behavioral factors in combating alcohol and drug abuse. 
Traditionally, Therapeutic Communities have been community-based long-
term residential substance abuse treatment programs.
    In recent years, TCA members have expanded their range of services, 
providing outpatient, prevention, education, family therapy, 
transitional housing, vocational training, medical services, and case 
management in addition to long-term residential programs. Additionally, 
many therapeutic communities are involved with drug courts, in-prison 
programs, offender re-entry programs, and continuing care.
                              Attachment 1
 Safeguards for Equity for Mental Health and Addiction Prevention and 
                               Treatment

Preemption
    Approximately 42 States have current laws that require some form of 
addiction and/or mental health coverage which mostly focus on addiction 
treatment protection and coverage. TCA strongly recommends that any 
legislation not preempt any State law or State provision that provides 
greater protection than Federal language. Such assurance needs to be 
correctly stated in Federal language. The House of Representatives, 
Paul Wellstone Mental Health and Addiction Equity Act of 2007 bill, 
currently has language that safeguards for preemption so that any State 
laws that provide greater consumer protections, benefits, rights or 
remedies are not impaired or deemed not enforceable.
Medical Necessity
    Criteria for medical necessity should be based on uniform clinical 
criteria to be developed based on quality indicators, patient 
assessment, and effectiveness of care and not cost alone. Managed Care 
plans should not be given the discretion to define uniform criteria as 
part of their authority. It is recommended that uniform clinical 
patient placement criteria are developed and that other criteria 
currently used by a State or the American Society of Addiction Medicine 
(ASAM) should be considered as a floor and a minimum in any 
legislation.
Managed Care
    Any policy that does not recognize the unique nature of addiction 
and our experience with the difficulty of providing necessary services 
for individuals covered under managed care plans or schemes, which 
cause delays, denials, and have negative consequences to individuals 
needing help, should not be considered. Equity legislation should 
include safeguards to protect individuals with mental disease and 
substance use disorders from delays and denials.
Transparency and Disclosure
    Any legislation should require that all plans be made available to 
providers and plan participants' with copies of their medical necessity 
criteria, procedures, appeal process, and exclusions under such plans 
publicly available in advance to providers considering coverage under 
the plan, employers considering coverage with a plan, and participants 
considering or currently within a plan.
Disease Equity
    Any legislation should require group health plans to provide mental 
disease and substance use disorder treatment benefits in parity with 
other diseases, illnesses and medical conditions. The timeliness of 
treatment can impact the early identification and recovery of an 
individual seeking treatment. Unfortunately, TCA members often see 
clients after they have lost their jobs and families. An individual 
with access to treatment earlier in their addiction should be given 
every chance to be treated with equity and without clinical 
discrimination.

                                 
                     Statement of Mike Fitzpatrick
    Chairman Stark, Representative Camp and Members of the 
Subcommittee, on behalf of the 210,000 members and 1,200 affiliates of 
the National Alliance on Mental Illness (NAMI), I want to thank you for 
convening this important hearing on the need for parity for mental 
illness and substance abuse parity in the Medicare program and private 
sector health plans. As the Nation's largest organization representing 
people living with serious mental illness and their families, NAMI 
would like to offer strong support for equitable coverage for mental 
illness treatment across all public and private sector programs.
    Since NAMI's inception in 1979, we have always supported enactment 
of standards that ensure nondiscriminatory coverage of treatments for 
illnesses such as schizophrenia, schizo-affective disorder, bipolar 
disorder, major depression and severe anxiety disorders. This demand 
for parity level coverage is rooted in basic principles in the founding 
of NAMI as a consumer and family organization. NAMI believes strongly 
that:

    1.  mental illnesses are real,
    2.  treatment for mental illness works--if you can access it, and
    3.  there is simply no medical or economic justification for public 
sector programs or private health insurance plans to cover treatment 
for mental illness on different terms or conditions than any other 
illness.
The Costs of Untreated Mental Illness Are Overwhelming for Our Nation
      Mental disorders are the leading cause of disability in 
the U.S. for ages 15-44.
      Suicide is the eleventh leading cause of death in the 
U.S., but is the third leading cause of death for people 10 to 24 years 
old. More than 90 percent of people who die by suicide have a history 
of mental illness.
      Adults with serious mental illness die 25 years younger 
than other Americans. A man with serious mental illness is likely to 
die by age 53, compared with the average male life expectancy of 78 
years.
      Approximately 50 percent of students with a mental 
disorder age 14 and older drop out of high school; this is the highest 
dropout rate of any disability group.
      Twenty-four percent of State prison and 21 percent of 
local jail inmates have a recent history of a mental health disorder. 
An alarming 65 percent of boys and 75 percent of girls in juvenile 
detention have at least one mental disorder.
      Between 2000 and 2003, emergency department (ED) visits 
with a primary diagnosis of mental illness increased at four times the 
rate of other ED visits.
      The annual economic, indirect cost of mental illnesses is 
estimated to be $79 billion. Most of that amount--approximately $63 
billion--reflects the loss of productivity as a result of illnesses.
NAMI Strongly Supports H.R. 1663
    Chairman Stark, NAMI would like to congratulate you and your 
colleagues for bringing the Medicare Mental Health Modernization of 
2007 (H.R. 1663) forward. For many years you have been the leader in 
Congress in pushing for equitable coverage for mental illness treatment 
in the Medicare program. As you know, Medicare has perhaps the out-of-
date and discriminatory benefit for mental illness and substance abuse 
treatment of any public or private sector program. The most widely 
recognized restrictions are the discriminatory limit of 190 lifetime 
days on inpatient care under Part A and the 50% cost sharing 
requirement for outpatient services under Part B.
    These restrictions--which apply only to mental illness treatment--
were unacceptably intolerable in 1965, and are even more troubling in 
2007. Over the past 40 years we have witnessed enormous advances in 
treatment for mental illness. Treatment for disorders such as 
schizophrenia, bipolar disorder and major depression rival those for 
heart disease and hypertension in terms of efficacy and effectiveness. 
More importantly, the public health burden associated with major mental 
illnesses far exceeds that for many other medical disorders. It is 
simply unacceptable for the Medicare program--a critical public sector 
program that serves the most vulnerable and disabled individuals in our 
Nation--to impose discriminatory limits on mental illness treatment.
    Mr. Chairman, H.R. 1663 contains a number of important provisions 
that you have championed for years:

      Reduction of the discriminatory 50% copayment for 
outpatient mental health services to 20%, and
      Elimination of the arbitrary 190-day lifetime limit on 
inpatient psychiatric care.

    As in the past, NAMI strongly supports your leadership in moving to 
eliminate these outdated and unfair limits on treatment coverage. In 
addition, NAMI would also like to express support for long overdue 
improvements to the Medicare program in H.R. 1663 designed to update 
the program and make it consistent with evidence-based practice for 
treatment of mental illness. Among these critical improvements is the 
addition of new community-based residential and intensive outpatient 
mental health services.
    These important community-based services are part of the most 
widely recognized evidence-based, recovery-oriented service delivery 
model, programs of Assertive Community Treatment (ACT). Many States are 
currently using the Medicaid program to finance ACT services for the 
most disabled individuals living with mental illness. Unfortunately, 
changes to the Medicaid Rehabilitation Option now actively under 
consideration at the Centers for Medicare and Medicaid Services (CMS) 
would devastate the ability of States to fund these critical services. 
These changes have not been endorsed by Congress and NAMI would urge 
you and your colleagues to continue oversight efforts to hold CMS 
accountable for enacting these unauthorized and destructive changes. In 
the meantime, passage of H.R. 1663 will go a long way toward broadening 
access to intensive community-based services for Medicare 
beneficiaries--both elderly and non-elderly people with disabilities 
receiving SSDI--living with severe mental illness. Finally, NAMI also 
applauds the efforts of this legislation to address the shortage of 
mental health professionals in rural and medically underserved regions.
Parity for Private Sector Health Insurance Plans Should Be a Top 
        Priority for the 110th Congress
    Mr. Chairman, as you know Congress has been debating enactment of a 
Federal standard for equitable coverage of mental illness treatment in 
group health insurance plans since the early 1990s. This has included 
enactment of the Mental Health Parity Act in 1996 that required parity, 
but only for annual and lifetime dollar limits. Since 1996, various 
bills have been introduced--some of which made progress--to require 
full parity, i.e. by adding durational treatment limitations (limits on 
inpatient days and outpatient visits that apply only to mental illness) 
and financial limits (higher cost sharing, deductibles and out-of-
pocket limits that apply only to mental illness).
    Mr. Chairman, as you know there are separate House and Senate 
parity bills (S. 558 and H.R. 1424) that have broad bipartisan support. 
While there are differences between the bills, they are remarkably 
similar.
    The separate House and Senate bills contain a number of major 
similarities. Both bills:

    1.  Expand on the limited 1996 Mental Health Parity Act that 
requires equitable coverage for mental illness only with respect to 
annual and lifetime dollar limits. Both expand on these requirements by 
requiring parity for treatment limitations (limits on inpatient days 
and outpatient visits that apply only to mental illness and substance 
abuse) and financial limitations (higher cost sharing, copayments or 
deductibles that applied to mental illness or substance abuse 
treatment).
    2.  Impose a parity standard as a coverage condition, i.e. neither 
bill mandates coverage of mental health or substance abuse treatment, 
but instead requires that if mental health and substance abuse benefits 
are offered, they must be on equal terms with medical surgical 
benefits. In other words, both bills allow employers and health plans 
to avoid the parity requirement by simply dropping mental health and 
substance abuse coverage altogether.
    3.  Amend the laws governing self-insured ERISA plans and fully 
insured plans regulated by the States. This means that parity would 
reach the 82 million covered lives in self-insured plans that are 
beyond the reach of State parity laws. Likewise, both bills amend the 
Federal Public Health Services Act (PHSA) to reach fully insured plans 
in States that have not passed parity laws. By amending both ERISA and 
the PHSA will ensure that parity reaches an estimated 130 million 
Americans (82 million covered lives in ERISA plans and 45 million in 
State regulated plans under the PHSA, 25 million of whom are in the 42 
States with parity laws).
    4.  Achieve parity for both mental illness and substance abuse 
disorders, a major step forward for individuals with co-occurring 
mental illness and substance abuse disorders.
    5.  Exempt group health plans sponsored by small employers, those 
with 50 or fewer workers, from the requirements of parity coverage.
    6.  Allow for employers or group health plans to seek an exemption 
if costs rise more than 2% as a result of compliance with the parity 
requirement. Both require health plans to first comply with the law for 
6 months before seeking this cost increase exemption, and both would 
require plans getting an exemption to come back into compliance the 
following year.

    At the same time, there are differences between the House and 
Senate bills on a number of important issues. These differences 
include:

      Scope of Benefits--Whether or not to define a list of 
required mental health and substance abuse diagnoses that must be 
covered by all health plans, or whether to defer to health plans and 
employers to define mental health and substance abuse benefits as under 
current law.
      State Preemption--How a new Federal standard for mental 
health and substance abuse parity should interact with the existing 42 
State parity law, i.e. whether or not a new Federal standard should 
displace all or part of a State law.
      Out-of-Network Coverage--Both bills require parity for 
out-of-network benefits (i.e., equal treatment limits and equal cost 
sharing). However, the House bill goes further and requires plans to 
have an out-of-network benefit for mental health and substance abuse if 
it exists on the medical-surgical side.

    Mr. Chairman, NAMI has endorsed the Senate bill. It is a product of 
significant work by all sides in this debate and has already been 
reported by the Senate Health, Education, Labor and Pensions (HELP) 
Committee by an 18-3 vote. The Senate bill also has the support of 
groups representing employers and health plans that have fiercely 
resisted parity legislation in the past. The House bill also has broad 
support, with more than 250 cosponsors.
    In NAMI's view, these circumstances create an enormous opportunity 
for agreement from all sides--

      Democrats and Republicans in both the House and Senate,
      President Bush,
      Groups representing employers and health plans, and
      NAMI's colleagues among the advocacy groups representing 
consumers, families, providers and professionals.

    This is the moment for mental illness and substance abuse insurance 
parity. The differences between the House and Senate bills are narrow 
and can easily be bridged if the political will is there among all 
sides. More importantly, the broad bipartisan support for this 
legislation exceeds that for any other major health care proposal in 
the 110th Congress. Enactment of mental illness parity will 
demonstrate that Congress and the President can come together to 
produce meaningful health care reform for the American people. It is 
imperative that equitable coverage for mental illness treatment reach 
the 82 million Americans in ERISA self-insured plans that are beyond 
the reach of the 42 State parity laws.
Conclusion
    Mr. Chairman, thank you for convening this important hearing. NAMI 
looks forward to working with you to achieve enactment of both H.R. 
1663 and S. 558-H.R. 1402 this year.
                                 

 Statement of National Association of Anorexia Nervosa and Associated 
                               Disorders
    The National Association of Anorexia Nervosa and Associated 
Disorders (``ANAD'') is the Nation's oldest nonprofit organization 
dedicated to education, early detection, and prevention of anorexia 
nervosa, bulimia nervosa, binge-eating disorder, and obesity. ANAD was 
founded in 1976 by Vivian Meehan, RN, DSc. At that time, there was 
literally no information for sufferers or families and no support 
systems for people with eating disorders.
    Over the past 30 years, ANAD has grown into a national and 
international association with education and support systems in 50 
States and several foreign countries. ANAD responds to over 5,000 
hotline calls yearly, provides counseling and referrals, sponsors a 
national network of free support groups, and offers education and 
prevention programs to promote self-acceptance and healthy lifestyles. 
Together with over 250 support groups, victims, families, laypersons, 
and health care professionals, ANAD advocates on behalf of the 
countless individuals and families who have been or will be impacted by 
eating disorders in their lifetimes.
    Eating disorders are at epidemic levels in America. An estimated 
seven million women and one million men suffer from eating disorders, 
and they impact all segments of society--the young and old, the rich 
and poor, and all ethnic groups including African American, Latino, 
Asian and Native American. Eating disorders cause tremendous suffering 
for victims and families. Anorexia nervosa has the highest mortality 
rate of any mental illness; the most frequent causes of death, 
according to the NIMH, are complications of the disorder, including 
cardiac arrest or electrolyte imbalance and suicide. Eating disorders 
are treatable and sufferers can recover provided that they receive 
adequate treatment.
    ANAD receives hundreds of calls from individuals and their families 
who have been denied health insurance coverage and are desperately 
seeking access to appropriate treatment for their illnesses. If not 
properly treated, victims, like Amy Kuehn, Co-leader of ANAD's Indiana 
Eating Disorders Coalition, suffer irreparable harm and find themselves 
requiring more and more costly health services throughout their lives.
    Amy Kuehn actively suffered from eating disorders for over 20 
years. Her personal account illustrates how discriminatory insurance 
practices pose major barriers to appropriate mental health treatment. 
All too often the burden of inequitable mental health coverage is 
unfairly borne by individuals like Amy resulting in devastating 
personal and financial losses. Amy may have been more fortunate than 
people in the majority of States in the U.S. who have no health care 
coverage for their eating disorders. But if Amy had access to 
appropriate care at the onset of her illnesses, she may have avoided 
more than 20 years of costly and inadequate treatment for her eating 
disorders.
    With the overwhelming number of personal tragedies that occur 
absent or with unequal mental health coverage, ANAD urges passage of 
H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act of 
2007. Federal mental health parity now can make the difference between 
life and death for a person with an eating disorder. The inclusion of 
eating disorders under the Paul Wellstone Mental Health and Addiction 
Equity Act of 2007 means the removal of major restrictions and 
limitations throughout the Nation to early detection and access to 
treatment, which offers the best chance for recovery and prevention of 
the lifelong effects of these potentially chronic and disabling 
illnesses.
  A Personal Account: How Inequitable Mental Health Coverage Creates 
      Major Barriers To Appropriate Treatment for Eating Disorders
    My name is Amy Kuehn. I am 36 years old, a mother of two, college 
graduate, and in recovery from anorexia nervosa and bulimia nervosa. I 
actively suffered from my eating disorders for over 20 years before I 
started my long-term recovery. My eating disorders have caused short-
term and chronic medical complications. I have suffered from kidney 
failure, bleeding ulcerations in my esophagus and stomach, and 
extremely low blood pressure and heart rate. I was diagnosed with 
osteoporosis at age 30, and with chronic anemia, chronic GERD, gastric 
ulcers, dental erosion, and heart conditions.
    My eating disorders began when I was 10 years old. Under my 
parents' insurance, I received treatment that was misguided and 
inadequate as a result of existing discriminatory insurance practices. 
I entered an adolescent psychiatric inpatient facility for 6 weeks 
during my senior year of high school. I spent that time with other 
adolescents who carried diagnoses of conduct disorder, drug addiction, 
alcohol addiction, oppositional-defiant disorder, and depression but 
nobody else there shared my diagnoses of anorexia and bulimia, except 
for one nurse who confided in me that she often vomited after eating.
    While in college in 1991, I was no longer eligible for my parents' 
insurance and had to obtain my own. Between 1991 and 2003, when I 
started my long-term recovery, I had numerous psychiatric 
hospitalizations for anorexia nervosa, bulimia nervosa, severe 
depression with and without suicidal ideation, and suicide attempts. 
Insurance dictated whom I could see which meant that at times, I still 
had to settle for extremely unqualified psychiatrists and doctors and 
inpatient psychiatric hospitalizations designed for persons with 
bipolar, schizophrenia and other mental illnesses unrelated to my 
eating disorders.
    While my insurance covered parts of those hospitalizations, there 
were enormous expenses that were not covered. I was married in 1993 so 
this became marital debt. I also had my children in 1995 and 1998 so 
finances became difficult to manage. Finally, in January 2001, we had 
no choice but to file for bankruptcy on my approximately $200,000 of 
bills related to care, however inadequate, for my eating disorders.
    I can only imagine how things could have been different for me if 
my insurance would have covered eating-disorders specific treatment 
when I was young. The enormous personal and financial costs incurred 
for years of suffering from my illnesses, expensive, unnecessary, and 
inappropriate psychiatric hospitalizations, physical deterioration 
caused by my anorexia and bulimia, and the emotional toll of fighting 
with my insurance company could have been avoided if only I had 
insurance coverage that provided access to treatment for eating 
disorders.
    I do not consider my own story to be better or worse than others' 
stories, just representative. I am one of many persons who either have 
no health insurance coverage for eating disorders or insurance coverage 
that restricts access to treatment for my life-threatening conditions. 
While I cannot regain over 20 years of disability or reverse the 
permanent physical effects of my eating disorders, this Federal mental 
health parity legislation before you can offer the increasing number of 
victims, including children as young as 6 years of age, equitable 
access to early and specialized care and the promise of early recovery 
that was so unavailable to me.
    For more information, please contact Mary Elsner, ANAD's Director 
of Advocacy and Government Affairs.

                                 
Statement of National Association of Health Underwriters, Arlington, VA
    The National Association of Health Underwriters (NAHU) is the 
leading professional trade association for health insurance agents and 
brokers, representing more than 20,000 health insurance producers and 
employee benefit specialists nationally. Our members service the health 
insurance policies of millions of Americans and work on a daily basis 
to help individuals and employers purchase health insurance coverage. 
As such, we know first-hand how much the cost of health insurance 
coverage is impacting our Nation's employers and the overall economy. 
NAHU feels that any measure to expand Federal mental health parity 
requirements should take into consideration the impact that such 
legislation could have on the cost of group health insurance and the 
ability of employers to continue to provide coverage for their 
employees.
    NAHU believes that the current Federal law for mental health parity 
has served group plans well. The current efforts in Congress to craft a 
new parity requirement, however, have come a long way to bridge the 
differences that have stifled passage of changes to the current parity 
requirements in the past. We are particularly pleased with the 
provisions in both S. 558 and H.R. 1424 to preserve plan medical-
management practices and the exemption for individual and small-group 
plans from the proposed requirements.
    However, NAHU is concerned about provisions in H.R. 1424 that 
differ from the Senate bill and would use the DSM-IV for purposes of 
coverage determinations. We believe such a Federal coverage mandate on 
employers would drive up costs, and is unprecedented in terms of other 
medical specialties. The DSM-IV was developed as a teaching tool; it 
was never intended to be a diagnostic coding guide for reimbursement. 
Furthermore, many of the most comprehensive plan designs maintain 
differences between categories of mental health conditions, and only 
provide coverage to biologically-based mental illnesses, as opposed to 
some of the more arbitrary problems outlined in the DSM-IV like 
caffeine addiction and jet-lag. Employer-sponsored health plans need 
the flexibility to experiment with differing coverage options to 
control costs, and mandating coverage like this would take this needed 
flexibility from employers. NAHU feels that the language in S. 558, 
which allows insurers and employers to decide which mental health 
benefits they will cover, is far preferable.
    As you consider this important legislation, please keep in mind 
that employers are struggling to continue to provide health insurance 
benefits to employees, as costs continue to increase each year. Parity 
requirements will not benefit consumers if their cost creates a barrier 
to entry and causes employers to drop coverage. The language in S. 558 
reflects a fair and carefully crafted compromise involving all 
interested parties, including employers, insurers and mental health 
parity advocates. It provides needed consumer protections in a way that 
won't cause excessive cost increases. NAHU urges the Committee to 
consider making changes to H.R. 1424 so that it will more closely 
mirror its counterpart legislation, S. 558.
    Thank you for the opportunity to provide comment on H.R. 1424. If 
you have any questions, or if NAHU could be of further assistance, 
please do not hesitate to contact me.

                                 

              National Association of Pediatric Nurse Practitioners
                                                     March 27, 2007

The Honorable Pete Stark, Chairman
Ways and Means Health Subcommittee
1136 Longworth House Office Building
Washington, D.C. 20515-6349

    Dear Chairman Stark:

    The National Association of Pediatric Nurse Practitioners (NAPNAP) 
represents approximately 7,000 members as the professional association 
for pediatric nurse practitioners and other advanced practice nurses 
who care for children. Pediatric nurse practitioners are registered 
nurses with advanced education and clinical experience and provide 
primary care services to children from birth to 21 years of age.
    We write to you today to provide support for the Subcommittee's 
March 27 hearing on mental health parity. Although the hearing's focus 
was predominantly on mental health and substance abuse parity for the 
Medicare program, we understand all too well that Medicare coverage 
decisions often have a profound effect on commercial health coverage 
decisions.
    The incidence of children and adolescents with mental health 
problems in the United States is significant--with as many as one in 
five children with a diagnosable mental, emotional or behavior 
disorder. An estimated two-thirds of all young people with mental 
health problems are not receiving the help they need. The National 
Association of Pediatric Nurse Practitioners is working to raise public 
awareness of these problems, correct common misperceptions, and 
implement preventive interventions targeted in children through its 
KySS\sm\ Program (Keep your children/yourself Safe and Secure).
    NAPNAP strongly values educational-behavioral interventions to 
teach children, youth, and their parents all aspects of physical and 
emotional safety and to build self-esteem, as well as other 
developmental assets. The KySS\sm\ Program promoted the mental health 
of children and adolescents through:

      integration of mental health promotion, screening, and 
early evidence-based interventions;
      health care that includes prevention, early recognition 
and treatment of mental health problems in childhood;
      promotion of optimal level of functioning and development 
that will form the foundation for productive adult years.

    We have not yet had the opportunity to review your legislation, 
H.R. 1663 to address mental health parity, but look forward to offering 
our support. We support H.R 1367 by Representative Patrick Kennedy, a 
bill that requires equity in the provision of mental health and 
substance-related disorder benefits under group health plans.
    If we can be of assistance to the Committee on this issue, please 
feel free to contact our Washington Representative, Amy Demske.

            Sincerely,

                             Patricia Clinton, PhD, RN, ARNP, FAANP
                                                          President

                                 
             Statement of Kathleen Grant, Portland, Oregon
    The Research Society on Alcoholism (RSA) welcomes the opportunity 
to submit this statement in support of Congress' consideration of the 
``Paul Wellstone Mental Health and Addiction Equity Act'' (H.R. 1424) 
to improve the overall health of all Americans. RSA is a professional 
research organization whose 1,600 members conduct basic, clinical, and 
psychosocial research on alcoholism and alcohol abuse. RSA's 
physicians, scientists, researchers, clinicians, and other experts work 
closely with National Institutes of Health (NIH) and National Institute 
on Alcohol Abuse and Alcoholism (NIAAA) to stimulate critical and 
innovative research initiatives in an effort to address this Nation's 
myriad of health problems that are directly attributable to heavy 
alcohol use, alcohol abuse, and alcoholism.
    Alcoholism is a serious disease that affects the lives of millions 
of Americans, devastates families, compromises national preparedness, 
and burdens the country's health care systems. It is beyond cavil, that 
each dollar spent on alcoholism research will pay huge dividends for 
all Americans. RSA applauds the efforts by Congressmen Patrick Kennedy 
(D-RI) and Jim Ramstad (R-MN) to require health plans offering mental 
health benefits to cover an array of mental health and addiction 
disorders. By increasing access to care, the costly toll on society and 
the hindrance it places on families can be reduced.
    Epidemiologic studies have shown that substance abuse affects an 
estimated 25 million Americans. The monetary cost to the public and the 
economy because of reduced productivity, property damage, accidents, 
and health care are astounding. For this reason, RSA respectfully urges 
Members of the Ways and Means Committee to ensure that sufficient steps 
are taken to prevent and treat alcoholism and the illnesses, injuries, 
and personal loss associated with the abuse of alcohol.
    Parity is needed for the coverage of both mental health and 
substance use services, because people in all stratums of the 
population are at risk for serious mental illnesses and alcohol 
problems. According to the National Conference of State Legislatures, 
42 States now offer some form of limited parity for the treatment of 
mental health disorders. Although, only 21 of those States include 
coverage for substance abuse, alcohol or drug addiction.
    Alcoholism is a tragedy that touches virtually all Americans. More 
than half of all adults have a family history of alcoholism or problem 
drinking. One in ten Americans will suffer from alcoholism or alcohol 
abuse and their drinking will impact their families, the community, and 
society as a whole. Untreated addiction costs America $400 billion 
annually and recent research indicates that alcoholism and alcohol 
abuse alone, cost the Nation approximately $185 billion annually. One-
tenth of this pays for treatment; the rest is the cost of lost 
productivity, accidents, violence, and premature death.
    The Centers for Disease Control and Prevention (CDC) ranks alcohol 
as the third leading cause of preventable death in the United States. 
Heavy drinking, for example, defined as having five or more drinks at 
least once a week, contributes to illness in each of the top three 
causes of death: heart disease, cancer, and stroke.
    The CDC also links excessive alcohol use, such as heavy drinking 
and binge drinking, to numerous immediate health risks that pose a 
menace not only to those consuming alcohol, but those surrounding them 
including traffic fatalities, unintentional firearm injuries, domestic 
violence and child maltreatment, risky sexual behaviors, sexual 
assault, miscarriage and stillbirth, and a combination physical and 
mental birth defects that last throughout the life of a child. As a 
case in point, fetal alcohol syndrome is the leading known cause of 
mental retardation.
    Statistically, alcohol is a factor in 50 percent of all homicides, 
40 percent of motor vehicle fatalities, 30 percent of all suicides, and 
30 percent of all accidental deaths. The long-term effects of alcohol 
abuse are just as extreme, leading to chronic organ diseases, bone 
loss, neurological and cardiovascular impairment as well as social and 
psychiatric problems including depression, suicidality and anxiety.
    The NIAAA, along with the National Institute on Drug Abuse (NIDA), 
and the Substance Abuse & Mental Health Services Administration 
(SAMSHA), have conducted research that demonstrates that substance 
abuse is particularly problematic in younger adolescents because it is 
the time when individuals are most vulnerable to addiction. According 
to the CDC, people aged 12 to 20 years drink almost 20% of all alcohol 
consumed in the United States. The NIAAA's National Epidemiologic 
Survey on Alcohol-Related Conditions (NESARC) states that 18 million 
Americans (8.5% of the population age 18 and older) suffer from alcohol 
use disorders (AUD), and only 7.1% of these individuals have received 
any treatment for their AUD in the past year. According to SAMHSA, in 
2005, 20.9 million Americans needed treatment for AUD but did not 
receive it.
    The U.S. scientific community is addressing alcoholism and 
addiction disorders at many different levels, starting at the earliest 
stages of human development. For instance, the NIAAA's NESARC survey 
sampled across the adult lifespan to allow researchers to identify how 
the emergence and progression of drinking behavior is influenced by 
changes in biology, psychology, and in exposure to social and 
environmental inputs over a person's lifetime. Scientists at NIH are 
supporting research to promulgate preemptive care for fetuses, early 
childhood, and adolescents; since children who engage in early alcohol 
use also typically display a wide range of adverse behavioral outcomes 
such as teenage pregnancy, delinquency, other substance use problems, 
and poor school achievement.
    NIAAA has been working closely with SAMHSA to play a leading role 
for the work of the Interagency Coordinating Committee for the 
Prevention of Underage Drinking established under the Sober Truth on 
Preventing Underage Drinking Act or STOP Act (P.L. 109-422), and for 
the forthcoming Surgeon General's Call to Action on underage drinking.
    The data on alcohol abuse are particularly disquieting in a 
subsection of the population that is unique for observing the effects 
of alcohol over a large cross-section of individuals. In the military, 
the costs of alcoholism and alcohol abuse are enormous. The 2005 
results of the Department of Defense's (DoD) 2005 Survey of Health 
Related Behaviors among Active Duty Military Personnel demonstrate that 
the rates of heavy drinking remain elevated among U.S. military 
personnel. This was the first time that this survey series has 
evaluated behaviors related to mental well-being, work stress and 
family stress associated with deployment to Iraq, Afghanistan, and 
other theaters of operation.
    The prevalence of heavy drinking is higher in the military 
population (16.1%) than in the civilian population (12.9%). About one 
in four Marines (25.4%) and Army soldiers (24.5%) engages in heavy 
drinking; such a high prevalence of heavy alcohol use may be cause for 
concern about military readiness. Furthermore, each individual Service 
branch showed an increasing pattern of heavy drinking from 2002 to 
2005. These patterns of alcohol abuse, which are often acquired in the 
military, frequently persist after discharge and are associated with 
the high rate of alcohol-related health disorders in the veteran 
population.
    The Department of Veterans Affairs (VA) states that 10 to 33 
percent of survivors of accidental, illness, or disaster trauma report 
problematic alcohol use, especially if they are troubled by persistent 
health problems or pain. Also, individuals with a combination of 
posttraumatic stress disorder (PTSD) and alcohol use problems often 
have additional mental or physical health problems. According to the 
VA, as many as 10 to 50 percent of adults with alcohol use disorders 
and PTSD also have one or more of the following serious disorders: 
anxiety disorders (such as panic attacks, phobias, incapacitating 
worry, or compulsions), mood disorders (such as major depression or a 
dysthymic disorder), disruptive behavior disorders (such as attention 
deficit or antisocial personality disorder), addictive disorders (such 
as addiction to or abuse of street or prescription drugs), and chronic 
physical illness (such as diabetes, heart disease, or liver disease).
    While the high rates of use and abuse of alcohol are alarming, the 
good news is that this Nation is poised to capitalize on unprecedented 
opportunities in alcohol research, opportunities which must be seized. 
Scientists are currently exploring new and exciting ways to prevent 
alcohol-associated accidents and violence. Importantly, prevention 
trials are developing methods to effectively address problem alcohol 
use. Further, scientists have identified discrete regions of the human 
genome that contribute to the inheritance of alcoholism. Our improved 
genetic research will accelerate the rational design of medications to 
treat alcoholism and also improve our understanding of the interaction 
and importance of heredity and environment in the development of 
alcoholism.
    The field of neuroscience is another important and promising area 
of alcohol research. The development of more effective drug therapies 
for alcoholism requires an improved understanding of how alcohol 
changes brain function to produce craving, loss of control over 
drinking behavior, tolerance to alcohol's effects, and the alcohol 
withdrawal syndrome. NIAAA is testing therapeutic agents that target 
different neurobiological substrates of alcohol dependence.
    The Research Society on Alcoholism believes that enactment of the 
legislation proposed by Congressmen Kennedy and Ramstad will provide 
the appropriate health coverage for those individuals who are in need 
of urgent care and treatment of alcohol use disorders.

                                 

                                 Therapeutic Communities of America
                                                     March 27, 2007

The Honorable Fortney ``Pete'' Stark, Chairman
U.S. House of Representatives
Committee on Ways and Means
Subcommittee on Health
Room 1102 LHOB
Washington, DC 20515

The Honorable Dave Camp, Minority Ranking Member
U.S. House of Representatives
Committee on Ways and Means
Subcommittee on Health
Room 11139 LHOB
Washington, DC 20515

    Dear Chairman Stark and Representative Camp:

    As you know, only 18.2% of all Americans over the age of 12 needing 
treatment actually receive it. This is a startling statistic and shows 
the need for public policy and community efforts to end discrimination 
and provide access to quality care earlier for individuals with 
substance use and mental health disorders. Equity legislation can 
assist with closing this treatment gap.
    Thank you for holding the hearing on March 27, 2007 on Mental 
Health and Substance Abuse Parity. Therapeutic Communities of America 
(TCA) provides the following comments for your consideration. The 
introduction of the bill last week, to require parity in mental health 
services for Medicare beneficiaries and eliminate a 190-day limit on 
inpatient treatment and lowering the copay requirements will improve 
access for seniors to receive needed services that are client-based and 
will allow for better outcomes. It confirms the necessity to establish 
in publicly-funded programs equity for access and effectiveness.
    TCA member programs are mostly publicly funded through an array of 
public programs that weave and leverage public funding to provide 
client-based holistic addiction and mental health services to low 
income Americans. TCA member programs treat low income Americans from 
pregnant women to seniors in need of mental health and addiction 
services. TCA appreciates the importance of equity for mental health 
coverage for Medicare recipients and is respectful of the efforts of 
your Committee.
    Therapeutic communities receive limited third party private payer 
reimbursement and although not directly impacted by health plan parity 
bills our members through their experience know the importance to 
develop consistent bills that would not place additional limitations or 
consequence on public services by permitting reimbursement to be based 
on costs and not be based on patient-based clinical criteria and 
quality indicators. TCA has attached a list of safeguards that should 
be considered as any legislation is advanced for private health plan 
parity bills. Those concerns include preemption, medical necessity 
criteria, managed care, disclosure, and equity. The Paul Wellstone 
Mental Health and Addiction Equity Act of 2007 recently introduced 
addresses those concerns and we hope that the bill is not amended to 
weaken any of its current safeguards, and as such, those provisions in 
the bill remain through final passage. Your hearing demonstrates the 
Committee's understanding for policy that advances appropriate care to 
all our citizens.
    We respectfully request that as you work toward equity for mental 
health and substance abuse treatment and prevention services that you 
consider the principles of the National Institute on Drug Abuse (NIDA) 
for drug treatment effectiveness. NIDA research shows the importance of 
length of stay in treatment and other principles that should be 
protected to assure equity with other chronic illnesses. Some of those 
principles include:

      No single treatment is appropriate for all individuals.
      Effective treatment attends to multiple needs of the 
individual, not just his or her drug use.
      Remaining in treatment for an adequate period of time is 
critical for treatment effectiveness.
      Recovery from substance abuse can be a long process and 
frequently requires multiple episodes of treatment.
      Treatment of addiction is as successful as treatment of 
other chronic diseases such as diabetes, hypertension and asthma.
      Substance abuse treatment programs should be constructed 
on evidence-based methodologies that are outcome based and meet 
performance measures.\1\
---------------------------------------------------------------------------
    \1\ Based in part on Principles of Drug Addiction Treatment--A 
Research-Based Guide, National Institute on Drug Abuse, National 
Institutes of Health, and NIH Publication No. 004180.

    Depending on the stability and support an individual with a 
substance use disorder has within their environment; and the 
progressive stage of their disease, a patient will need criteria that 
understands the type, kind, duration, and multiple treatment needed by 
that person for recovery. It is important that a skilled service 
provider with specific training in addiction should do assessment, 
referral, placement, clinical determinations, and treatment of an 
individual with substance use disorders. Substance abuse treatment is a 
process that moves from motivation and stabilization to recovery as it 
is with other chronic diseases.
    TCA appreciates your commitment and your leadership on this 
important issue. Please contact us if we can provide additional 
information at (202) 296-3503.

            Sincerely,

                                                 Linda Hay Crawford
                                                 Executive Director

                               __________

    Therapeutic Communities of America (TCA), founded in 1975, 
represents over 600 programs across the country dedicated to serving 
those with addiction and mental health disorders. Therapeutic 
Communities provide a comprehensive continuum of care to patients, many 
of whom have multiple barriers to recovery, such as co-occurring mental 
illness, the homeless, adolescents, pregnant women, and HIV/AIDS. 
Therapeutic Communities also strive to help individuals secure family 
unification and successful welfare-to-work outcomes.
    The Therapeutic Community methodology of treatment was established 
in the late 1950's, addressing the entirety of social, psychological, 
cognitive, and behavioral factors in combating alcohol and drug abuse. 
Traditionally, Therapeutic Communities have been community-based long-
term residential substance abuse treatment programs.
    In recent years, TCA members have expanded their range of services, 
providing outpatient, prevention, education, family therapy, 
transitional housing, vocational training, medical services, and case 
management in addition to long-term residential programs. Additionally, 
many therapeutic communities are involved with drug courts, in-prison 
programs, offender re-entry programs, and continuing care.
                              Attachment 1
 Safeguards for Equity for Mental Health and Addiction Prevention and 
                               Treatment

Preemption
    Approximately 42 States have current laws that require some form of 
addiction and/or mental health coverage which mostly focus on addiction 
treatment protection and coverage. TCA strongly recommends that any 
legislation not preempt any State law or State provision that provides 
greater protection than Federal language. Such assurance needs to be 
correctly stated in Federal language. The House of Representatives, 
Paul Wellstone Mental Health and Addiction Equity Act of 2007 bill, 
currently has language that safeguards for preemption so that any State 
laws that provide greater consumer protections, benefits, rights or 
remedies are not impaired or deemed not enforceable.
Medical Necessity
    Criteria for medical necessity should be based on uniform clinical 
criteria to be developed based on quality indicators, patient 
assessment, and effectiveness of care and not cost alone. Managed Care 
plans should not be given the discretion to define uniform criteria as 
part of their authority. It is recommended that uniform clinical 
patient placement criteria are developed and that other criteria 
currently used by a State or the American Society of Addiction Medicine 
(ASAM) should be considered as a floor and a minimum in any 
legislation.
Managed Care
    Any policy that does not recognize the unique nature of addiction 
and our experience with the difficulty of providing necessary services 
for individuals covered under managed care plans or schemes, which 
cause delays, denials, and have negative consequences to individuals 
needing help, should not be considered. Equity legislation should 
include safeguards to protect individuals with mental disease and 
substance use disorders from delays and denials.
Transparency and Disclosure
    Any legislation should require that all plans be made available to 
providers and plan participants' with copies of their medical necessity 
criteria, procedures, appeal process, and exclusions under such plans 
publicly available in advance to providers considering coverage under 
the plan, employers considering coverage with a plan, and participants 
considering or currently within a plan.
Disease Equity
    Any legislation should require group health plans to provide mental 
disease and substance use disorder treatment benefits in parity with 
other diseases, illnesses and medical conditions. The timeliness of 
treatment can impact the early identification and recovery of an 
individual seeking treatment. Unfortunately, TCA members often see 
clients after they have lost their jobs and families. An individual 
with access to treatment earlier in their addiction should be given 
every chance to be treated with equity and without clinical 
discrimination.

                                 
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