On Tuesday, the U.S. Departments of Labor, Health & Human Services, and the Treasury (the Departments) issued their joint report to Congress on the Mental Health Parity and Addiction Equity Act (MHPAEA). The Consolidated Appropriations Act (CAA) amended MHPAEA in 2021, and this report—the first since the CAA was enacted—confirms that increased agency enforcement actions and investigations against health plans, plan sponsors and issuers are on the way in 2022. Secretary of Labor Marty Walsh told reporters that the Departments plan to use “every tool that we have … to enforce and push this law forward.”1
The Departments Found No Plan Was Ready to Meet New Compliance Challenges
MHPAEA requires issuers and group health plans offering mental health/substance use disorder coverage to do so at parity with analogous medical/surgical coverage offered under the plans. Among other things, MHPAEA requires any plan-imposed limitations on the scope or duration of behavioral or mental health coverage such as preauthorization requirements or reimbursement rates (referred to as “non-quantitative treatment limitations,” or NQTLs) to be no more restrictive than the NQTLs applied to medical/surgical benefits under the same plan.
The joint report indicates that the NQTLs most commonly the subject of an inquiry from the Departments were:
- Preauthorization and precertification requirements
- Network provider admission standards
- Concurrent care review
- Limitations on applied behavior analysis or treatment for autism spectrum disorder
- Out-of-network reimbursement rates
- Treatment plan requirements
- Limitations on medication assisted treatment for opioid use disorder
- Provider qualification or billing restrictions
- Limitations on residential care or partial hospitalization programs
- Nutritional counseling limitations
- Speech therapy restrictions
- Exclusions based on chronicity or treatability of condition, likelihood of improvement, or functional progress
- Virtual and telephonic visit restrictions
- Fail-first or step therapy requirements2
Spurred in part by the increase in mental health service needs brought on by the COVID-19 pandemic, and the staggering rise of opioid overdose deaths, MHPAEA was amended by Section 203 of the CAA. The amendments include new obligations making it easier to enforce MHPAEA . Section 203 requires plans to conduct comparative analyses of NQTLs on medical/surgical and mental health/substance use disorder benefits imposed by their plans, and to have those analyses available to submit to regulators upon request. Acting under its new Section 203 authority, between February and October 2021, the Department of Labor’s Employee Benefits Security Administration NQTL Task Force issued 156 letters to plans in 86 investigations asking for comparative analyses of 1,112 distinct NQTLs.3 The joint report found that no plan was able to produce comparative analyses that satisfied the Departments by the initial deadline.4
According to the joint report, the initial analyses submitted by the plans were noncompliant on a variety of fronts, including that the plans failed to adequately:
- Identify the benefits, classifications or plan terms to which the NQTL applies
- Describe in sufficient detail how the NQTL was designed
- Describe how the NQTL is applied in practice to medical and mental health benefits
- Define the factors, sources and evidentiary standards used in designing and applying the NQTL to medical and mental health benefits
- Analyze the stringency with which factors, sources and evidentiary standards are applied
- Demonstrate parity compliance of the NQTL at issue as written and in operation5
The Departments warned that plans should not wait for a letter from a regulator to begin building their comparative analyses: “A number of plans stated that they were unable to comply … because they erroneously assumed that service providers would prepare a comparative analysis for the plan, or that service providers would have prepared their own comparative analysis upon which the plan could rely …. In other instances, plans requested lengthy extensions because they needed time to find someone to draft a comparative analysis for them.”6 Given that plans were required to have comparative analyses available upon a regulator’s request by February 10, 2021, plans that have not already prepared comparative analyses should do so as soon as practicable.7
The joint report illustrates that meaningful compliance presents challenges for plans, plan sponsors, issuers and third-party plan administrators. Common pitfalls included: failure to demonstrate compliance of NQTLs and factors in application, failure to specify which benefits or benefit classifications were affected by an NQTL, and analyses that were nonresponsive.8
Beyond Enforcement: Regulation and Legislation Also on the Horizon
The joint report leaves little doubt that increased enforcement is likely in 2022. But the Departments also note that “additional tools” may be required, and that they “intend to issue additional rulemaking to further clarify MHPAEA’s protections for individuals and the obligations it imposes on plans and issuers.”9 The Departments conclude the report by jointly recommending to Congress an amendment to MHPAEA revising the act’s standards to be less subjective and more similar to the preventive care requirements of the Affordable Care Act.10 The Departments suggest that external, independent and nationally recognized standards such as the Diagnostic and Statistical Manual of Mental Disorders (DSM) or the International Classification of Diseases (ICD) “could provide greater transparency for the scope of conditions that are covered under parity.”
1 See Marketplace Morning Report, Labor Department Outlines Unlawful Imbalance in Coverage Between Mental, Physical Care Services, Marketplace (Jan. 25, 2022), https://www.marketplace.org/2022/01/25/labor-department-outlines-unlawful-imbalance-in-coverage-between-mental-physical-care-services/
2 U.S. Departments of Labor, Health & Human Services, and the Treasury, 2022 MHPAEA Report to Congress, at 11 (2022) [hereinafter “Report”]. Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf
3 Report at 8.
4 Report at 8. CMS, which oversees MHPAEA enforcement with respect to health insurance issuers in Missouri, Texas and Wyoming and over nonfederal governmental health plan sponsors in all states, requested 21 distinct NQTL analyses. Fifteen were found to be noncompliant, while two were determined to reveal impermissible treatment limitations. State insurance regulators are responsible for enforcing MHPAEA with respect to health insurance issuers in other states.
5 Report at 28–29; the MHPAEA lists six benefit classifications: 1) inpatient, in-network; 2) inpatient, out-of-network; 3) outpatient, in-network; 4) outpatient, out-of-network; 5) emergency care; and 6) prescription drugs.
6 Report at 14–15.
7 See Department of Labor, Q1, FAQs About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021 Part 45 (April 1, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-45.pdf
8 Report at 4.
9 Report at 9.
10 Report at 53.