Following the recent passage of Mental Health Parity (MHP) legislation in the House, the Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424), and Sept. 2007 passage of the Senate version, the Mental Health Parity Act of 2007 (S. 558), a compromise appears to be on the horizon. The lead sponsors of the two bills, Reps. Patrick Kennedy (D-R.I.) and Jim Ramstad (R-Minn.), and Sens. Edward Kennedy (D-Mass.), Michael Enzi (R-Wyo.) and Sen. Pete Domenici (R-N.M.), have been working on crafting compromise language to bridge the gap between the two bills.

Among the several key sticking points is House language that mandates employers to provide coverage on all illnesses listed in the Diagnostic and Statistical Manual of Mental Disorders, 4th Edition (DSM-IV), published by the American Psychiatric Association. Another issue between the two bills is medical management—the Senate bill allows plans to use their own medical management criteria whereas the House does not. Additionally, the Senate bill does not stipulate that individuals can qualify for out-of-network coverage if their in-network coverage is inadequate, and shall be priced at in-network copayment levels—something the House bill outlines.

Both bills exempt companies with fewer than 50 employees from having to comply, and provide a cost exemption for businesses whose health plans that are projected to incur increased exceeding 2 percent of the total plan cost during the first year, or 1 percent each subsequent year. The high number of part-time employees in certain industries that typically are not eligible for insurance vs. the insurance industry definition of a small-group as 50 or fewer individuals (not necessarily eligible employees) is likely to cause confusion.

The Senate’s compromise would have eliminated the controversial House language mandating employers to provide coverage on all illnesses listed in the DSM-IV, instead requiring employers to cover all illnesses listed in a provider manual. The Kennedy-Domenici compromise also includes House language regarding out-of-network coverage.

Senate and House MHP leaders have been meeting to discuss the Senate’s initial compromise offer as well as the House’s counteroffer. It is unclear what the timeline is for consideration of the House’s counteroffer. Domenici has stated that the compromise offered by the Senate is likely as far as the Senate is willing to go.

The recent movements on MHP legislation—coupled with the pending retirements of Domenici and Ramstad after the 110th Congress—have reinvigorated the MHP debate, making enactment this year more likely than the past several years.