While significant progress has been made in recent years, there are still challenges to obtaining insurance coverage for mental health and substance use disorder treatment. Insurance companies may deny claims for a variety of reasons, including that the care is not “medically necessary.” A recent paper in the Journal of Psychiatric Practice takes a practical look at what is needed for an effective letter of medical necessity and how psychiatrists can help to secure appropriate insurance coverage for mental health treatment.

“While federal and state parity laws should make access to medically necessary treatment more timely and less burdensome, many, probably most, patients still encounter substantial obstacles,” the paper authors write. “However, preemptive use of a medical necessity letter can often make a difference in gaining access to insurance reimbursement.”

The paper authors include Joe Feldman, M.B.A., who, after several denials of continued coverage for mental health treatment for his daughter, was successful in challenging the insurance company in court; Eric Plakun, M.D., medical director of the Austen Riggs Center and member of the APA Board of Trustees; attorney Mark DeBofsky, J.D.; and Cheryl Potts, M.B.A., executive director of The Kennedy Forum-Illinois.

The Mental Health Parity and Addiction Equity Act, passed in 2008, requires that most insurers cover treatment for mental health and substance use disorder treatment in the same way they cover treatment for physical illnesses. The authors of the paper explain that in order for a letter of medical necessity to be effective, it needs to be based on the Mental Health Parity and Addiction Equity Act and the principles of effective care identified in the landmark decision in the Wit v. United Behavioral Health/Optum case.

In order to be considered effective, care must:

• Treat underlying problems and not just the current presenting problem.
• Treat co-occurring conditions.
• Use a multidimensional assessment to determine level of care such as those developed by professional organizations.
• Be individualized and without arbitrary limits on duration.
• May be to maintain functional capacity or prevent deterioration.
• Be both safe and effective.
• Address special needs of children and adolescents when making level of care decisions.
• Err on the side of caution by using a higher level of care when there is ambiguity about the appropriate level of care

The paper includes a template for a medical necessity letter and specific suggested text associated with each of the eight principles of effective treatment.

The medical necessity letter is a tool of empowerment—for psychiatrists and patients, Feldman recently told Psychiatric News. “Clinicians don’t have to wish their patients ‘good luck’ when dealing with an insurance company denial but can change the expectation to one that, in fact, the insurance company will pay for necessary care,” he said.

More information

• More on the Mental Health Parity and Addiction Equity Act: Mental Health Parity (psychiatry.org)
• More on specific state legislation: www.thekennedyforum.org/about/parity-progress