Many health plan sponsors continue to struggle to comply with the Mental Health Parity and Addiction Equity Act (MHPAEA). It’s a continuing concern because the Department of Labor (DOL) has placed an emphasis on auditing plans for compliance.
Health plans looking for the hurdles that might trip them up can find helpful information in the article “Mental Health Parity Compliance: Hidden Hurdles” in the March/April issue of Benefits Magazine by actuary Stephanie Patrick, FSA, MAAA. Patrick is senior consulting actuary for Horizon Actuarial Services, LLC, based in the Atlanta, Georgia office.
What Is MHPAEA?
In general, the law requires group health plans and health insurance plans offering group or individual health insurance coverage to ensure that the financial requirements and treatment limitations on mental health or substance use disorder (MH/SUD) benefits are no more restrictive than those on medical or surgical benefits. The law originally passed in 2008 and was amended by the Affordable Care Act to apply to individual health insurance coverage.
Both the DOL and the Centers for Medicare and Medicaid Services (CMS) have requirements related to auditing plans for compliance with MHPAEA and the current administration has made enforcing the law a top priority. “For health plans, this prioritization could mean increased risk of mental health audit, nonquantitative treatment limitation (NQTL) comparative analysis audit, or both, as well as increased scrutiny during these audits,” Patrick notes.
Hidden Hurdle 1: Equality Does Not Equal Parity
“One primary part of mental health parity—one that on the surface seems easy to understand—is the concept that a plan cannot charge participants more for mental health services than it does for medical services,” Patrick writes.
Most plans address this requirement by setting mental health cost-share amounts equal to medical cost-share amounts. The catch is that this approach only works if the plan’s benefit structure aligns with the structure required for compliance testing.
Here’s the compliance testing structure: health plans can apply a financial requirement such as deductible or copay or a quantitative treatment limit (QTL) such as a day or visit limits to a mental health benefits if both of the following are true.
A. The financial requirement or QTL applies to “substantially all,” or two-thirds, of medical/surgical benefits in the classification.
B. If A is true, the level of financial requirement or QTL must be the “predominant” one—the one that applies to more than 50% of the medical/surgical benefits in that classification.
She adds that there is a classification structure described in the law. The allowed classifications are:
1. Inpatient, in network
2. Inpatient, out of network
3. Outpatient office visits, in network
4. All other outpatient services, in network
5. Outpatient office visits, out of network
6. All other outpatient services, out of network
7. Emergency care
8. Prescription drugs
Here’s a hypothetical example of how complicated it can be for health plans.
The Peach Plan wants its participants to have strong relationships with their primary care providers (PCPs). As a result, its benefits cover in-network PCP office visits with a low copay requirement and without requiring the participant to meet the deductible (40% of in-network office visit claims fall into this category). In-network specialist office visits are subject to the deductible and the plan’s coinsurance (the remaining 60% of office visit claims).
Can the plan apply deductibles, coinsurance or copays to mental health office visits?
No. The reason is that about 60% of the plan’s office visit claims are for specialist visits; 40% are for PCP visits. Because neither the PCP nor the specialist claims rise to the level of two-thirds of claims, there is not a financial requirement that meets the “substantially all” rule.
Hidden Hurdle 2: When You don’t (and Can’t) Know How Your Plan Is Run
Under the 2021 Consolidated Appropriations Act (CAA, health plans must have a comparative analysis of nonquantitative treatment limitations (NQTLs) available upon request by the DOL or the plan’s participants. NQTLs are any nonnumeric limits on the scope or duration of benefits or treatment, and they include things like exclusions on experimental drugs or medical necessity reviews.
The problem, Patrick explains, is that many NQTLs are not described in plan documents or the methods applied are not described in detail. In addition, most plans rely heavily on their vendors and professional partners for the administration of day-to-day operations. The challenges include the following:
–Lack of plan-specific information. Large medical carriers or pharmacy benefit managers (PBMs) may provide blanket statements in response to requests for NQTL information that are not specific to each plan’s setup or arrangement with the carrier. That’s probably not going to be sufficient for the DOL’s detailed review, Patrick writes.
–Controls and complex coding. Many claims payment systems incorporate numerous controls to help avoid fraud, waste and abuse and may automatically deny claims outside of certain thresholds and flag other for medical necessity review or additional details. “These systems are complex, and the coding developed to review the claims is often multilayered. This makes it difficult to directly map all the NQTLs embedded within the claims system,” Patrick notes.
She advises plans to do their best to build a specific, detailed and well-reasoned written comparative analysis but keep in mind that changes to the document or the plan may still be required after a departmental review.
Hidden Hurdle 3: Didn’t We Exclude That?
Some plans may think they’re in the clear for MHPAEA compliance because they don’t cover mental health benefits at all. Not so fast. Patrick advises such plans to check their prescription drug coverage carefully. “Covering any prescription drug that is used to treat a mental health condition or disorder may require a plan to cover mental health benefits in all classifications, including inpatient and outpatient care,” she writes.
An example would be a plan that excludes mental health and substance abuse treatment but covers certain drugs like fluoxetine (brand name: Prozac®) for uses outside of mental health disorders, including weight loss and headaches. Patrick recommends that such a plan should have management criteria such as prior authorization requirements in place for those medications to ensure that they are being used for conditions other than mental health conditions.
Continue With Best Efforts
Some of these pieces are easy fixes, Patrick writes, but others are more difficult. She concludes “There is no clear road map to help ensure compliance for each component. Awareness of the expectations is one big step, but even after you know what you need to provide, the road to providing it may be complicated. Hang in there.”
More Guidance on the Way
DOL is considering the difficulty that health plans have in getting information from service providers as it develops new mental health parity guidance, according to Lisa Gomez, assistant secretary for the Employee Benefits Security Administration (EBSA). Gomez made her comments during the International Foundation of Employee Benefits Plans Washington Legislative Update in May.
Bloomberg Law News quoted Gomez as saying that DOL is aware that multiemployer plans face “challenges with dealing with service providers and trying to get information” and that the agency is trying to “take that all into consideration and come up with more guidance.” That would include rulemaking and a second report to Congress to provide examples of the dos and don’ts of mental health parity.
Turn to International Foundation resources, including Today’s Headlines and Regulatory Updates for the latest news and up-to-date information on mental health parity. Join us virtually in October for the Mental Health Virtual Conference!
