Investing in the behavioral health industry presents both opportunities and challenges for private equity investors.
One benefit to investors are the statutory and regulatory changes over the last 12 years — including The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) and the Affordable Care Act — that increased the number of beneficiaries enrolled in health plans that provide mental health and substance use disorder (MH & SUD) benefits, thereby creating the potential for higher reimbursement rates. Conversely, the MH & SUD market remains highly regulated, at times with substantial barriers to entry.
Regulatory Opportunities Driving Potential Success in Behavioral Health -
Pro #1: Increased Access to Benefits -
Recent statutory and regulatory changes require health plans to offer increased access to MH & SUD benefits. For example, as of 2016, the MHPAEA requires managed care organizations, alternative benefit plans, and the Children’s Health Insurance Program to provide access to MH & SUD benefits at parity with the level at which they provide medical/surgical benefits. Similarly, the U.S. Department of Health and Human Services’ 2013 final rule regarding essential health benefits requires MH & SUD services to be covered as one of 10 essential health benefits categories in non-grandfathered individual and small group plans.
Please see the full Publication for more information.
Please see full publication below for more information.