Many health plan sponsors continue to struggle to comply with the Mental Health Parity and Addiction Equity Act (MHPAEA), particularly the requirement to conduct a comparative analysis of nonquantitative treatment limitations (NQTLs) that has been effective under the 2021 Consolidated Appropriations Act (CAA) for more than two years (since February 10, 2021).
With the intention of bringing plans into compliance and protecting participants, the Departments of Labor (DOL), Health and Human Services (HHS) and Treasury in late July published an extensive package of guidance. In an announcement, the Departments said the guidance is intended to reinforce MHPAEA’s fundamental goal of ensuring that families have the same access to mental health and substance use disorder (MH/SUD) benefits as they do physical health benefits, make it easier to get in-network mental health care and eliminate barriers to access that keep people from getting the care they need, when they need it.
The package includes proposed rules implementing the NQTL comparative analyses requirements, a technical release that sets out principles with respect to required data submissions for NQTLs related to network composition and a potential enforcement safe harbor, and an enforcement report to Congress detailing how the Employee Benefits Security Administration (EBSA) worked with plan sponsors and the regulated community on coming into compliance with the NQTL comparative analysis requirements.
DOL has requested comments on the proposed rules and the technical release by October 2, 2023. Lisa Gomez, assistant secretary of labor and head of EBSA, said in a recent interview with another International Foundation staff member, “We’re really hopeful that interested parties—like plan sponsors, insurers, advocates for participants—that everybody is taking a very close look at the proposed rules and the report to Congress and comes back to us with comments on what they think works, what doesn’t work and how it can be improved. We’re hopeful that we’re going to get a lot of helpful feedback so that we can move forward with a final rule.”
Lack of Plan-Specific Information Creates Compliance Challenges
DOL is aware of reports that self-insured plans have been unsuccessful in receiving comparative analyses (or the information required to perform and document comparative analyses) from their TPAs.
“Multiemployer plans might be able to build coalitions to work with the service providers so that the service providers understand that these plans want them to pay attention to these issues sooner rather than later, and that they are not waiting until they get a request for an NQTL analysis to address these issues,” Gomez said in the interview.
DOL asked commenters to share ways that TPAs could be further incentivized to facilitate compliance with MHPAEA on behalf of the plans that they design and administer.
The Departments asked for comments on these observations: “Because TPAs and insurance companies providing administrative services only (ASO) overwhelmingly design the plans, administer the networks, manage claims, provide plan services, maintain and hold the data relevant to the comparative analyses, and drive MHPAEA compliance, they are in the best position to conduct comparative analyses and to provide the analyses in an efficient and cost-effective manner. The Departments expect, as reflected in their own direct observations of the comparative analyses process, that TPAs and issuers would perform most of the work associated with the analyses because they can do so at the lowest cost and greatest scale. Particularly for self-insured plans, however, there may be some additional work required by individual plans to complete the comparative analysis prepared by the issuer to address unique plan issues.”
What Does Mental Health Parity Mean?
Mental health parity is the legal requirement that group health plans and group health insurance issuers provide MH/SUD benefits in a similar way as medical/surgical (M/S) benefits. This means that health plans can’t impose barriers on participant access to MH/SUD benefits that don’t apply to M/S benefits. For example, a health plan should provide the same access and level of benefits to someone with depression, an eating disorder or a substance use disorder as the plan would provide for someone with a medical condition, such as diabetes or heart disease.
In general, MHPAEA is the federal law that 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 MH/SUD benefits are no more restrictive than those on medical or surgical M/S benefits. Read this previous blog, Can Your Plan Clear Mental Health Parity Compliance Hurdles? for more background information on financial and treatment limitations.
Under MHPAEA, if the plan offers both M/S and MH/SUD benefits, the financial requirements (e.g., copayments) and treatment limitations (e.g., number of visits) must be treated comparably. In addition, other nonnumeric limits on the duration and scope of treatment—referred to in MHPAEA as NQTLs—must be comparable.
Examples of NQTLs include:
- Criteria to determine whether the treatment or services are medical necessity or appropriate
- Requiring approval from the health plan prior to care
- List of covered prescription drugs
- Step-therapy or fail-first policies (i.e., steps you need to go through before you can get a certain treatment)
- Coverage exclusions based on failure to complete a course of treatment
- Coverage restrictions based on geographic location, facility type, provider specialty.
There’s no exhaustive list of NQTLs. Plans and issuers identify NQTLs based on how the plan is written and operated.
EBSA Reports Some Enforcement Progress
Along with the proposed rules, EBSA also released its 2023 MHPAEA enforcement report. The report provides additional details on the progress the agency has made in gaining compliance from plans and service providers.
Removing or revising noncompliant NQTLs. “Despite the fact that none of the comparative analyses submitted by plans or issuers during the Reporting Period were initially sufficient to satisfy provisions of MHPAEA added by the CAA, 2021, follow-up requests, continued conversations, insufficiency letters, and the possibility of being named as non-compliant in this report eventually incentivized a significant proportion of plans, plan sponsors, and issuers to correct MHPAEA violations, including removing or revising non-compliant NQTLs.”
Working with service providers to correct impermissible exclusions. EBSA has directly contacted service providers before contacting the plans they serve in order to clarify whether the service provider administers plans that have these exclusions and determine which plans are affected. The agency also gathers information on whether the service provider or the plans it serves have conducted a comparative analysis that demonstrates compliance for NQTLs. Depending on the circumstances, EBSA then needed to issue requests for NQTL comparative analyses from some or all of the service provider’s plan clients. In many cases, the service provider agreed to remove potentially impermissible exclusions that applied to many plans, without requiring EBSA to issue requests for comparative analyses to the service provider or its plan clients, the enforcement report said.
New Rules Seek to Provide Clarity, Improve Compliance
Increasing compliance with the NQTL content and administration requirements is one of the major focuses of the proposed rules.
Following are some highlights from the Departments’ summary.
- Make clear that MHPAEA requires that individuals can access their MH/SUD benefits in parity with M/S benefits.
- Make clear that plans and issuers cannot use more restrictive prior authorization and other medical management techniques (i.e., NQTLs) for MH/SUD benefits, standards related to network composition for MH/SUD benefits and factors to determine out-of-network reimbursement rates for MH/SUD care providers.
- Require plans and issuers to collect and evaluate outcomes data and take action to address material differences in access to MH/SUD compared with M/S benefits.
- Codify the requirement that plans and issuers conduct meaningful comparative analyses to measure the impact of NQTLs. This includes evaluating standards related to network composition, out-of-network reimbursement rates and prior authorization NQTLs.
Focus on Outcomes Data
The Departments are seeking information beyond the design of NQTLs to include participants’ actual experiences. This includes:
How NQTLs apply in operation. Many comparative analyses lacked any specific information showing consideration of how the NQTLs would actually apply in operation, the report to Congress said. For example, some prior authorization NQTL comparative analyses described how prior authorization was designed to work but did not provide any information on how prior authorization requirements were applied to MH/SUD benefits as compared with M/S benefits analyses, and also did not explain significant disparities in the application of prior authorization requirements between M/S and MH/SUD benefits.
Information sufficient to show what a plan is doing in practice. DOL has highlighted that plans and issuers should be prepared to provide samples of covered and denied MH/SUD and medical/surgical benefit claims.
What would outcomes data look like? In many insufficiency letters addressing a prior authorization NQTL, EBSA sought the following types of information, broken out by MH/SUD and M/S benefits within a classification, in order to assess how an NQTL was applied in operation:
- Number of preservice claims received
- Number and rate of preservice denials
- Turnaround times for processing preservice claims
- Number and rate of preservice claims involving peer review
- Outcome of preservice claims involving peer review.
The precise information needed to support an NQTL analysis will vary depending on the type of NQTL. For example, the nature of the NQTL required such information to be further itemized by benefit type in order to meaningfully show how the NQTL was applied in operation, the enforcement report said.
Other Proposed Rule/Enforcement Report Highlights
Plans should make sure they are aware of issues including fiduciary responsibility, deadlines for providing the comparative analysis and participant rights to information.
Fiduciary responsibility. For plans that are subject to ERISA, a plan fiduciary would be required to certify in writing that they reviewed the comparative analysis. The fiduciary would state whether they believe the plan is in compliance with the regulations.
Quick turnaround time to provide the comparative analysis upon request. Plans must provide the analysis in 30 calendar days upon request from a participant, beneficiary or other authorized representative and within ten business days upon receiving a DOL audit request.
Participant rights to information. DOL will continue to conduct participant assistance and educate workers and other interested parties about rights and benefits safeguarded under MHPAEA.
DOL’s guide for employees, “Understanding Your Mental Health and Substance Use Disorder Benefits,” provides the following instructions:
- Ask your health plan if it has any prior authorization or medical necessity requirements for mental health benefits. If it does, ask how the criteria for these mental health benefit limitations were developed in comparison to those for medical/surgical benefits.
- Request copies of all information your health plan uses to decide about co-payments, yearly limits, lifetime limits, medical necessity, and prior authorization.
DOL provides a template for participants to use to request the information from their health plan. Employers should consider reviewing this template so that they know what “upon participant request” looks like.
Where Plan Sponsors Can Start Coming Into Compliance
In the interview, Gomez pointed out that there are some more basic pieces of coming into compliance that may be easier to achieve than others. For example, plans might begin to look at eliminating exclusions for treatments for certain conditions.
Two red flags identified in the enforcement report were exclusion of applied behavioral analysis (ABA) therapy for autism spectrum disorder and exclusion of nutritional counseling for eating disorders.
More red flags were identified in the DOL guide for employees:
- The health plan requires preauthorization or concurrent review for all mental health benefits (for example, only approving a few days of benefits at a time before requiring another preauthorization).
- The plan’s network of providers of mental health treatment is much less complete than its network of medical providers, making it far harder or impossible for you to find providers who will give you covered treatment at in-network rates.
- The plan requires preauthorization every three months for medications prescribed to treat mental health conditions.
- The plan refuses to cover mental health treatment because you failed to complete previous treatment or because there is no “likelihood of improvement.”
- The health plan requires that your treatment plan must be updated and submitted every six months or it will not be covered.
“EBSA reminds plans and issuers that the requirement to perform and document a comparative analysis is not dependent upon a request by EBSA,” the proposed rule says. This means that plan sponsors should confirm that an NQTL comparative analysis has been performed and documented or begin working the TPAs and service providers on data collection efforts and getting the analyses completed and reviewed. Based on the NQTL comparative analysis, identify and remove or revise any identified violations in their plans.
EBSA expects that plans and issuers will increasingly begin to submit compliant analyses from the outset when the plan or issuer receives a request for a comparative analysis.
Stay turned for updates, and visit the mental health toolkit for additional resources.
- New Mental Health Parity Guidance – Considerations Every Health Plan Sponsor Should Know [Reinhart]
- New Guidance Emphasizes Focus on Access to Mental Health and Substance Use Disorder Benefits: Group Health Plans Should Prepare – and Potentially Revisit NQTL Comparative Analyses [Michael Best]
- Proposed Mental Health Parity and Addiction Equity Act Rules Clarify Technical Compliance Requirements, But Practical Challenges Remain [Troutman Pepper]
- The ‘No More Restrictive’ Requirement for NQTLs Under the Proposed MHPAEA Regulations [Mintz Levin]
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.