House conferees on Wednesday, May 21, dropped a controversial provision from mental health parity benefits legislation, significantly increasing the chances a final agreement will be reached, observers say.

The conferees, in an offer to the Senate, deleted a provision in the parity bill the House passed last year that would require group plans to provide coverage for all mental health care services listed in the most recent edition of a diagnostic treatment manual published by the American Psychiatric Association.

That provision, opposed by employer groups, is not included in the mental health care benefits parity bill the Senate passed last year.

Observers earlier said that the Senate would not accept the House provision, knowing that business support for its measure would vanish if it did, eliminating any chance of an agreement being reached on a compromise bill.

"It was a deal-breaker," said Frank McArdle, a consultant with Hewitt Associates in Washington.

With House conferees dropping support of the provision, the likelihood of a deal between the two braches being worked out on a compromise bill is much greater, McArdle said.

While a huge obstacle preventing a final agreement is gone, conferees still have to resolve numerous other differences between the two bills, such as a House provision not directly related to mental health care parity that would impose certain restrictions on physician-owned hospitals.

The core of the House and Senate bills, though, is identical: requiring group health care plans to provide the same coverage for mental disorders as they do for other medical conditions.

That would be a change from current law that only bars discriminatory annual and lifetime dollar limits on coverage for mental disorders. But other coverage differences are allowed. For example, it is legal for a health plan to limit the number of annual outpatient visits for treatment of mental disorders it will cover, while not imposing a comparable limitation for other medical conditions.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.