The momentum has been provided by an agreement just before the break between Sens. Edward Kennedy, D-Massachusetts, and Pete Domenici, R-New Mexico, on policy toward pre-emption of state mental health parity laws.

The legislators, in concert with business, insurance and patient groups, decided that the Senate bill would keep in place a law that allows states to regulate insurance, and the federal government to regulate group health plans.
 
This approach essentially would ensure a federal floor for mental health benefits that could then be increased by individual states.

Although business lobbyists preferred previous language that would allow federal law to prevail, they backed the change because it keeps the Senate bill on track for passage.

“In a way, we authored this change,” says E. Neil Trautwein, vice president and employee benefits counsel at the National Retail Federation. “It is a standard we know and can live with.”

Both the Senate version and a similar House measure would require equity between mental health and medical/surgical benefits on treatment limitations, costs — such as deductibles and co-payments — and out-of-network coverage. Neither mandates mental health coverage.

The House and Senate labor committees have both approved their respective bills. Two more House committees must work on that chamber’s version. Each measure has enough co-sponsors—268 in the House and 57 in the Senate—to ensure floor passage.

Business groups oppose the House bill because it would require that mental health plans cover all diseases included in the Diagnostic and Statistical Manual-IV. Employers worry that they would have to cover substance disorders like caffeine addiction. They also are concerned that the House bill would curtail managed care.

Proponents assert that using the DSM would end discrimination by diagnosis and dispute that the House bill would limit medical management. About 44 million Americans suffer from mental illness, but only a third receive treatment.

Although the Senate and House approaches vary widely, advocates of the Senate bill believe that a potentially difficult conference committee featuring two Kennedy generations could be avoided. The House version was co-written by Rep. Patrick Kennedy, D-Rhode Island.

“There is some hope that the House would adopt the Senate-passed bill and then we can all enjoy a Rose Garden signing ceremony,” Trautwein says.

Such a celebration might be a harbinger for increased cooperation between business and the Democratic majorities on Capitol Hill.

The participation of a wide range of interest groups in cobbling together the Senate bill “allowed for the vetting of the concerns that all these stakeholders brought to the table,” says Kathryn Wilber, health policy legal counsel at the American Benefits Council.

The process might be viable in the future when Congress tackles larger health care issues.

“This is a model that would work going down that road,” Wilber says.

—Mark Schoeff Jr.