On July 25, 2023, the Departments of Labor, Health and Human Services and Treasury (the “Departments”) published proposed regulations intended to clarify the obligations of health plans and health insurance issuers under the Mental Health Parity and Addiction Equity Act (“MHPAEA”). The proposed regulations, if finalized in their current form, would place additional data collection and evaluation responsibilities on health plans that impose non-quantitative treatment limitations (“NQTLs”) on mental health or substance use disorder (“MH/SUD”) benefits and would require such plans to evaluate the overall impact of NQTLs on participants’ access to MH/SUD benefits. Along with the proposed regulations, the Departments released the 2023 MHPAEA Comparative Analysis Report to Congress (“Congressional Report”), which details the Departments’ enforcement efforts under the MHPAEA during the prior year.
Enacted in 2008, the MHPAEA prohibits health plans and health insurance issuers that provide MH/SUD benefits from imposing limitations on MH/SUD benefits that are more restrictive than the limitations imposed on medical or surgical (“M/S”) benefits. Such benefit limitations include quantifiable limits, such as cost-sharing requirements and visit limits, as well as NQTLs such as prior authorization and concurrent review requirements. The Consolidated Appropriation Act of 2021 (“CAA”) added a requirement for health plans to complete and submit to the Departments upon request a comparative analysis of NQTLs to demonstrate parity between MH/SUD and M/S benefits. The Departments then report the results of their NQTL comparative analysis reviews to Congress annually.
In the 2023 Congressional Report, the Department of Labor added two new items to its priority areas of enforcement: (1) impermissible exclusions of key MH/SUD treatments such as applied behavioral analysis (“ABA”) therapy for autism spectrum disorder and nutritional counseling for eating disorders; and (2) adequacy standards for MH/SUD provider networks. The Departments reported that they are particularly concerned about NQTLs related to network adequacy, including provider network composition and provider reimbursement rates.
The proposed regulations, if finalized, would establish minimum standards for comparative analyses to assess whether an NQTL, as written and in operation, complies with the MHPAEA. These standards would require plans to collect and evaluate data related to the overall impact of NQTLs on participants’ access to MH/SUD benefits as compared to M/S benefits. If the data reveals “material differences” in such access, a plan would be required to take reasonable action to address the differences. For example, with respect to autism spectrum disorder, a plan would be deemed noncompliant if it imposes a requirement, as part of its medical necessity review for ABA therapy, that a participant’s caregiver actively participate in the ABA therapy but does not impose a similar requirement as part of the predominant medical necessity requirements for substantially all M/S benefits in the same classification (in-network, outpatient benefits).
Separately, under a rule specific to network composition, plans would be required to collect and evaluate additional data, including in-network and out-of-network utilization rates, time and distance data and data on providers accepting new patients to demonstrate compliance with the parity requirements. In evaluating such data, the Departments would view higher rates of network usage for M/S benefits as compared to MH/SUD benefits as a sign of noncompliance. The Departments also state their intention to create a potential safe harbor with respect to network composition NQTLs, whereby plans that meet certain data-based standards will not be subject to enforcement action for such NQTLs for a period of time.
Additionally, the proposed regulations identify six items that would be required to be in plans’ written NQTL comparative analyses: (1) a description of the NQTL; (2) the identification and definition of the factors used to design or apply the NQTL; (3) a description of how factors are used in the design or application of the NQTL; (4) a demonstration of comparability and stringency, as written; (5) a demonstration of comparability and stringency in operation; and (6) findings and conclusions. For plans subject to the Employee Retirement Income Security Act of 1974 (“ERISA”), a comparative analysis would also be required to include a certification by one or more named fiduciaries of the plan confirming that they have reviewed the comparative analysis and found it to comply with these requirements. Finally, the proposed regulations would sunset the option for self-funded, non-federal government plans to elect to opt out of compliance with the MHPAEA.
The Departments have invited public comments on the proposed regulations, which must be submitted by October 2, 2023. The Departments are particularly interested in comments regarding the proposed data collection and evaluation requirements related to network composition NQTLs as well as the potential safe harbor.
We will continue to monitor this issue, including any changes that may be adopted as part of a final rule. Please contact Slevin & Hart for more information on the MHPAEA and how the proposed regulations could affect your plan.
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