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July 19, 2021
The Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted in 2008 and saw to it that if MH/SUD benefits are offered in any classification – they must be provided in all classifications.
Financial requirements (FR) stipulate there may not be lifetime or annual dollar limits that create a lesser benefit–than those imposed on med/surg benefits. Also, quantitative treatment limitations (QTLs) such as day of visit limits must be no more restrictive than the predominant treatment limitations applied to “substantially all” med/surg plan benefits.
The Act aimed to facilitate access to MH and addiction treatment by eliminating discriminatory restrictions on MH/SUD coverage or other barriers to treatment. This became more critical given the opioid crisis. The DOL, HHS, and Treasury ( “the departments”) have enforcement with respect to employer sponsored plans.
While FRs and QTLs are straightforward nonquantitative treatment limitations (NQTLs) are more challenging. NQTLs are limitations on the scope or duration of the benefits for treatment -such as preauthorization, medical necessity determinations, provider network design and standards to join and the like. NQTLs are generally non-numerical. The Department of Labor communicated the following concerning NQTLs: “processes, strategies, evidentiary standards or other factors used in applying a nonquantitative treatment limitation to MH/SUD benefits must be comparable to, and applied no more stringently than, those used with respect to med/surg benefits in the same classification.”
CAA Amended MHPAEA Disclosure Rules
Beginning February 10, 2020 (45 days after enactment) the Consolidated Appropriations Act (CAA) of 2021, section 203, established that employer plans and insurers “must perform and document their comparative analysis of the design and application of nonquantitative treatment limitations (NQTLs).” And, upon request must make theses analysis available to participants ( ERISA 104). Finally, plans must submit this information to the DOL-EBSA , or State authorities upon request.
Outline of Disclosure Elements
Terms – specific plan and coverage terms on NQTL and M/S benefits and a description of these, and include which category the benefit is in. The six major categories impacted by the rules are inpatient, in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care and prescription drugs.
Factors — factors used to determine that the NQTLS should apply to the benefits.
Evidentiary standards — the evidentiary standards and any other sources on which the plan relied to back up the factors used to design the NQTL and justify its application to a benefit (see chart below for examples)
Comparative analysis — a separate analysis of each NQTL for benefits in each classification “demonstrating that the processes, strategies, evidentiary standards and other factors used to apply the NQTLs” to MH/SUD benefits (in written terms and plan operations) are “comparable to and applied no more stringently” than those used to apply NQTLs to M/S benefits
Findings and conclusions — the results of the comparative analysis giving the plans or issuer’s specific findings on what is and is not in compliance with the parity law.
While previously defined the DOL /EBSA emphasized that Nonquantitative Treatment Limitations include (but are not limited to) the following:
- Medical Management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;
- Formulary design for prescription drugs;
- Plans with multiple network tiers (preferred provider and participating providers), network tier design;
- Standards for provider admission to participate, including reimbursement rates;
- Plan methods or determining usual, customary and reasonable charges;
- Refusal to pay for higher cost therapies until it can be shown that a lower cost therapy is not effective (known as fail-first policies or step therapies; and
- Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage.
Under the Cures Act and PHSA the DOL, HHS and Treasury Dept are to jointly issue a compliance program guidance document. The CAA follows these requirements for guidance. The DOL self- compliance tool is helpful, but not updated to reflect CAA rules. The first guidance was due June 2022. The most challenging NQTLs no due date established for guidance.
Questions and Obstacles
While the employer plan is liable for MHPAEA compliance, most of the various decisions made are at the administrator level (TPA, PBM) based on criteria they have developed. The employer sponsor is almost totally reliant on their third party administrators for the comparative analysis being required under CAA. Meanwhile, it is unlikely an employer plan has the brand new CAA requirements covered within their current service agreements with TPAs and PBMs. Will the comparative analysis provided by a TPA be sufficient? How will the plan sponsor know? If a comparative analysis is not sufficient, how with the plan sponsor supplement the information to the satisfaction of the DOL?
Next Steps for Self -funded Employer Plans
Perform and document a comparative analysis of plan NQTLs as written –and applied—to both MH/SUD benefits –and med/surg benefits. In the DOL’s words, a comparative analysis for each NQTL imposed must include a robust discussion of the following elements:
- Review the most recent Q&A released regarding MHPAEA
- Prepare an NQTL comparative analysis.
- Contact your TPA and PBM, ask them what their process and fees are to conduct the analysis.
- New contracts with these vendors –consider this analysis a prerequisite .
- If the TPA or PBM cannot provide the analysis –make some sort of good faith effort to comply;
- Focus on NQTLs in the plan document (for now)and prepare a strategy and timeline –to assess which will require the TPA or clinical experts;
- Start with the NQTLs the DOL says they intend to focus on first, to review:
- Prior authorization requirements for inpatient services;
- Concurrent review for inpatient and outpatient services;
- Standards for provider admission to participate in a network; and
- Out-of-network reimbursement rates.
The compliance directions for the quantitative treatment limitation requirements have been straightforward. On the other hand, compliance with the MHPAEA’s NQTL requirements has been elusive, in part due to a lack of clear guidance from regulators on how plan sponsors and administrators can take steps to ensure compliance.
The CAA directed the Departments (DOL, HHS, IRS) to issue and finalize additional regulations and guidance on MHPAEA compliance by June 27, 2022. The Department must provide stakeholders at least 60 days after the issuance of any proposed guidance to submit comments.
Under the CAA, sponsors and administrators must now bring their plans into compliance. The rules are complex and cannot be met without help from the employer’s health plan vendors. Consultation with your benefits counsel regarding the mandated mental health parity comparative analyses is encouraged.