[Congressional Record Volume 143, Number 13 (Wednesday, February 5, 1997)]
[Extensions of Remarks]
[Pages E172-E173]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             NATIONAL MENTAL HEALTH IMPROVEMENT ACT OF 1997

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                      Wednesday, February 5, 1997

  Mr. STARK. Mr. Speaker, today I am introducing the National Mental 
Health Improvement Act of 1997. This bill will provide parity in 
insurance coverage of mental illness and improve mental health services 
available to Medicare beneficiaries. It represents an urgently needed 
change in coverage to end discrimination against those with mental 
illness and to reflect the contemporary methods of providing mental 
health care and preventing unnecessary hospitalizations.
  My bill prohibits health plans from improving treatment limitations 
or financial requirements on coverage of mental illness, if similar 
limitations or requirements are not imposed on coverage of services for 
other health conditions. The bill also expands Medicare part A and part 
B mental health and substance abuse benefits to include a wider array 
of settings in which services may be delivered. It eliminates the 
current bias in the law toward delivering services in general hospitals 
by permitting services to be delivered in a variety of residential and 
community-based settings. Through use of residential and community-
based services, costly inpatient hospitalizations can be avoided. 
Services can instead be delivered in settings which are most 
appropriate to an individual's needs.
  In 1993, as a nation, we spent approximately $67 billion for the 
treatment of mental illness and another $21 billion for substance abuse 
disorders. Medicare expenditures in these areas for 1993 were estimated 
at $3.6 billion or 2.7 percent of Medicare's total spending. Over 80 
percent of that cost was for inpatient hospitalization.
  In addition to the direct medical costs associated with the treatment 
of mental illness, there are significant social costs resulting from 
these disorders. Treatable mental and addictive disorders exact 
enormous human, social, and economic costs--individual suffering, 
breakup of families, suicide, crime, violence, homelessness, impaired 
performance at work, and partial or total disability. It is estimated 
that mental and addictive disorders cost the economy well over $300 
billion annually. This includes productivity losses of $150 billion, 
health care costs of $70 billion, and other costs, e.g. criminal 
justice, of $80 billion.
  Two to three percent of the population experience severe mental 
illness disorders. Many more suffer from milder forms of mental 
illness. Roughly 1 out of 10 Americans suffer from alcoholism or 
alcohol abuse and 1 out of 30, from drug abuse. This population is very 
diverse. With appropriate treatment, the mental health problems of some 
people can be resolved. Others have chronic problems that can persist 
for decades. Indeed, there are those who battle mental illness their 
entire lives. Mental illness and substance abuse disorders come in many 
forms and include many different diagnoses as well as ranges in levels 
and duration of disability. Still, these disorders do not have full 
parity in coverage by insurance plans.
  In the last congressional session, parity in the treatment of mental 
illness was a widely and hotly debated issue. The final version of the 
Departments of Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1997 included Title VII--
Parity in the Application of Certain Limits to Mental Health Benefits. 
This represents a start in creating solutions to address a problem that 
has been ignored far too long. But it's not enough. The act essentially 
states that if a health insurance plan or coverage does not include an 
aggregate lifetime limit on substantially all medical and surgical 
benefits, the plan or coverage may not impose any aggregate annual or 
lifetime limit on mental health benefits. Additionally, in the act, 
``mental health benefits'' refers to benefits with respect to mental 
health services, as defined under the terms of the plan or coverage, 
but does not include benefits with respect to treatment of substance 
abuse or chemical dependency.
  Furthermore, the Act included exemptions in coverage requirements for 
small employers. If an employer has at least 2 but not more than 50 
employees, they can be exempt from the new coverage requirement. 
Finally, if a group health plan experiences an increase in costs of at 
least 1 percent, they can be exempted in subsequent years. The 
inclusion of title VII into the VA--HUD bill is important because it 
represents a starting place. But now we must do more.
  My bill today addresses two fundamental problems in both public, as 
well as private, health care coverage of mental illness today. First, 
despite the prevalence and cost of untreated mental illness, we still 
lack full parity for treatment. The availability of treatment, as well 
as the limits imposed, are now linked to coverage for all medical and 
surgical benefits. Whatever limitations exist for those benefits will 
also apply to mental health benefits.
  Let's not forget the small employers either. If a company qualifies 
for the small employer exemption, the insurance companies will be able 
to set different, lower limits on the scope and duration of care for 
mental illness compared to other illness. This means that people 
suffering from depression may get less care and coverage than those 
suffering a heart attack. Yet, both illnesses are real.
  Additionally, access problems to mental health benefits can result 
from these restrictions. In general, about 50 percent of all health 
plans limit mental illness coverage in some form. Approximately 88 
percent limit hospitalization to 30 to 60 days. Outpatient benefits are 
limited by visit or dollar amounts in 85.5 percent of medium to large 
plans and 70 percent of small plans. About 80 percent of all plans 
limit inpatient care in some form and 99 percent of plans limit 
outpatient coverage.
  Access to equitable mental health treatment is essential. It can be 
done at a reasonable price. The increased costs in insurance premiums 
in the private sector is in the range of 3.2 to 4.0 percent. It is 
estimated that about $2.50 per month is the cost of fully offsetting 
the premium increase by an increase in the deductible. Two dollars and 
fifty cents is a small price to pay for ending health care 
discrimination.
  Second, the diagnoses and treatment of mental illness and substance 
abuse has changed dramatically since the Medicare benefit was designed. 
Treatment options are no longer limited to large public psychiatric 
hospitals. The great majority of people can be treated on an outpatient 
basis, recover quickly, and return to productive lives. Even those who 
once would have been banished to the back wards of large institutions 
can now live successfully in the community. But the Medicare benefit 
package of today does not reflect the many changes that have occurred 
in mental health care.
  This bill would permit Medicare to pay for a number of intensive 
community-based services. In addition to outpatient psychotherapy and 
partial hospitalization that are already covered, beneficiaries would 
also have access to psychiatric rehabilitation, ambulatory 
detoxification, in-home services, day treatment for substance abuse, 
and day treatment for children under age 19. In these programs, people 
can remain in their own homes while receiving services. These programs 
provide the structure and assistance that people need to function on a 
daily basis and return to productive lives.
  They do so at a cost that is much less than inpatient 
hospitalization. For example, the National Institute of Mental Health 
in 1993 estimated that the cost of inpatient treatment for 
schizophrenia can run as high as $700 per day, including medication. 
The average daily cost of partial hospitalization in a community mental 
health center is only about $90 per day. When community-based services 
are provided, inpatient hospitalizations will be less frequent and 
stays will be shorter. In many cases, hospitalizations will be 
prevented altogether.
  This bill will also make case management available for those with 
severe mental illness or substance abuse disorders. People with severe 
disorders often need help managing many aspects of their lives. Case 
management assists people with severe disorders by

[[Page E173]]

making referrals to appropriate providers and monitoring the services 
received to make sure they are coordinated and meeting the 
beneficiaries' needs. Case managers can also help beneficiaries in 
areas such as obtaining a job, housing, or legal assistance. When 
services are coordinated through a case manager, the chances of 
successful treatment are improved.
  For those who cannot be treated while living in their own homes, this 
bill will make several residential treatment alternatives available. 
These alternatives include residential detoxification centers, crisis 
residential programs, therapeutic family or group treatment homes, and 
residential centers for substance abuse. Clinicians will no longer be 
limited to sending their patients to inpatient hospitals. Treatment can 
be provided in the specialized setting best suited to addressing the 
person's specific problem.
  Right now in psychiatric hospitals, benefits may be paid for 190 days 
in a person's lifetime. This limit was originally established primarily 
in order to contain Federal costs. In fact, CBO estimates that under 
modern treatment methods, only about 1.6 percent of Medicare enrollees 
hospitalized for mental disorders or substance abuse used more than 190 
days of service over a 5-year period.
  Under the provisions of this bill, beneficiaries who need inpatient 
hospitalization can be admitted to the type of hospital that can best 
provide treatment for his or her needs. Inpatient hospitalization would 
be covered for up to 60 days per year. The average length of hospital 
stay for mental illness in 1995 for all populations was 11.5 days. 
Adolescents averaged 12.2 days; 14.6 for children; 16.6 days for older 
adolescents; 8.6 days for the aged and disabled; 9.9 days for adults. A 
stay of 30 days or fewer is found in 93.5 percent of the cases. The 60-
day limit, therefore, would adequately cover inpatient hospitalization 
for the vast majority of Medicare beneficiaries, while still providing 
some modest cost containment. Restructuring the benefit in this manner 
will level the playing field for psychiatric and general hospitals.
  The bill I am introducing today is an important step toward providing 
comprehensive coverage for mental health. Further leveling the health 
care coverage playing field to include mental illness and timely 
treatment in appropriate settings will lessen health care costs in the 
long run. These provisions will also lessen the social costs of crime, 
welfare, and lost productivity to society. This bill will assure that 
the mental health needs of all Americans are no longer ignored. I urge 
my colleagues to join me in support of this bill.
  A summary of the bill follows:


                           title i provisions

       The bill prohibits health plans from imposing treatment 
     limitations or financial requirements on coverage of mental 
     illness if similar limitations or requirements are not 
     imposed on coverage of services for other conditions.
       The bill amends the tax code to impose a tax equal to 25 
     percent of the health plan's premiums if health plans do not 
     comply. The tax applies only to those plans who are willfully 
     negligent.


                          title ii provisions

       The bill permits benefits to be paid for 60 days per year 
     for inpatient hospital services furnished primarily for the 
     diagnosis or treatment of mental illness or substance abuse. 
     The benefit is the same in both psychiatric and general 
     hospitals.
       The following ``intensive residential services'' are 
     covered for up to 120 days per year: residential 
     detoxification centers; crisis residential or mental illness 
     treatment programs; therapeutic family or group treatment 
     home; and residential centers for substance abuse.
       Additional days to complete treatment in an intensive 
     residential setting may be used from inpatient hospital days, 
     as long as 15 days are retained for inpatient 
     hospitalization. The cost of providing the additional days of 
     service, however, could not exceed the actuarial value of 
     days of inpatient services.
       A facility must be legally authorized under State law to 
     provide intensive residential services or be accredited by an 
     accreditation organization approved by the Secretary in 
     consultation with the State.
       A facility must meet other requirements the Secretary may 
     impose to assure quality of services.
       Services must be furnished in accordance with standards 
     established by the Secretary for management of the services. 
     Inpatient hospitalization and intensive residential services 
     would be subject to the same deductibles and copayment as 
     inpatient hospital services for physical disorders.


                           Part B Provisions

       Outpatient psychotherapy for children and the initial 5 
     outpatient visits for treatment of mental illness or 
     substance abuse of an individual over age 18 have a 20% 
     copayment. Subsequent therapy for adults would remain subject 
     to the 50% copayment.
       The following intensive community-based services are 
     available for 90 days per year with a 20% copayment (except 
     as noted below): partial hospitalization; psychiatric 
     rehabilitation; day treatment for substance abuse; day 
     treatment under age 19; in home services; case management; 
     and ambulatory detoxification.
       Case management would be available with no copayment and 
     for unlimited duration for ``an adult with serious mental 
     illness, a child with a serious emotional disturbance, or an 
     adult or child with a serious substance abuse disorder (as 
     determined in accordance with criteria established by the 
     Secretary).''
       Day treatment for children under age 19 would be available 
     for up to 180 days per year.
       Additional days of service to complete treatment can be 
     used from intensive residential days. The cost of providing 
     the additional days of service, however, could not exceed the 
     actuarial value of days of intensive residential services.
       A non-physician mental health or substance abuse 
     professional is permitted to supervise the individualized 
     plan of treatment to the extent permitted under State law. A 
     physician remains responsible for the establishment and 
     periodic review of the plan of treatment.
       Any program furnishing these services (whether facility-
     based or freestanding) must be legally authorized under State 
     law or accredited by an accreditation organization approved 
     by the Secretary in consultation with the State. They must 
     meet standards established by the Secretary for the 
     management of such services.

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