The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, which was originally independent from the Affordable Care Act (ACA), requires health insurers and group plans that already offer mental illness coverage to provide the same level of benefits as they would for medical and surgical care.
Beginning in 2014, the ACA extended the reach of the MHPAEA by requiring all qualified health plans offered through the health insurance marketplaces to include coverage for mental and addiction disorders as one of the 10 categories of Essential Health Benefits. It also states that the coverage must comply with the federal parity requirements set forth in the MHPAEA.
The uncertainty surrounding repeal of the ACA and the subsequent impact on the behavioral health care sector doesn’t seem to be scaring away investors. As of March 13, 2017, nine behavioral health deals were announced, up nearly 30% from the same period last year. Nearly all the acquirers in 2017 have been strategics operating in the behavioral health space. In 2016, two private equity acquirers as well as a home health acquirer had moved into this space in the first quarter.
The one exception is the most recent behavioral health deal. On March 10, 2017, MTS Health Investors LLC acquired privately held, Colorado-based Trumpet Behavioral Health LLC for an undisclosed price. Trumpet offers evidence-based behavioral health services to children and adults with autism spectrum disorder and other developmental disabilities, based on the principles of Applied Behavior Analysis.
For more insight into this sector, join our Interactive Webinar on March 23, 2017, featuring industry experts Chris Rogers, Managing Director at Ziegler, and Jerry Rhodes, CEO of CRC Health, as we discuss the current state of the behavioral health care M&A market, and the outlook for 2017.
