New Law Strengthens Parity for Mental Health and SUD

By February 10, 2021 (45 days after the law was signed), plan sponsors must be prepared to provide certain information related to the analyses of NQTLs to the DOL or HHS, upon request.

This insight provides background, summarizes the new requirements and suggests possible action items for plan sponsors.

Background

MHPAEA requires plans that provide benefits for mental health and SUD benefits to provide those benefits in parity with benefits provided for medical/surgical benefits.

The MHPAEA generally prohibits a plan or an insurer from imposing NQTLs on MH/SUD benefits in any classification unless, under the terms of the plan or coverage as written and in operation, any processes, strategies, evidentiary standards or other factors used in applying the NQTL to MH/SUD benefits are comparable to and applied no more stringently than those for medical/surgical benefits.

Examples of NQTLs include:

• Prior authorization or ongoing authorization requirements
• Concurrent review standards
• Formulary design for prescription drugs
• For plans with multiple network tiers (such as preferred providers and participating providers), network tier design
• Standards for provider admission to participate in a network, including reimbursement rates
• Plan or issuer methods for 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 (also known as “fail-first” policies or “step therapy” protocols)
• Medical-management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative
• Exclusions of specific treatments for certain conditions
• Restrictions on applicable provider billing codes
• Standards for providing access to out-of-network providers
• Exclusions based on failure to complete a course of treatment
• 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

The new requirements

Under the new law, upon request, plan sponsors must give the DOL or HHS comparative analyses related to NQTLs that include the following information:

• Specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all mental health or SUD and medical/surgical benefits to which each NQTL applies in each respective benefits classification
• Factors used to determine that the NQTLs will apply to mental health or SUD benefits and medical or surgical benefits
• Evidentiary standards used to design and apply the NQTLs to mental health or SUD benefits and medical/surgical benefits
• Comparative analyses demonstrating that application of NQTLs to mental health or SUD benefits, as written and in operation, are comparable to and no more stringent than for medical or surgical benefits
• Specific findings and conclusions reached by the group health plan or health insurer with respect to the health insurance coverage, including any results of the analyses described in this subparagraph that indicate that the plan or coverage is in compliance with the requirements of this section

What the departments may and must do

The Act permits the DOL and HHS to request these analyses in any circumstances the department finds appropriate. It requires the departments to collect them in instances of potential noncompliance or complaints regarding noncompliance. The departments are required to collect at least 20 NQTL analyses per year.

Consequences of noncompliance

If the DOL or HHS identify NQTL noncompliance, the plan sponsor begins a “corrective action period” and must submit a revised comparative analysis to the relevant department reflecting compliance. This must occur within 45 days of an initial determination of noncompliance by the secretary of the DOL or HHS.

If compliance is not achieved during the corrective action period and the secretary provides the plan with a final determination of noncompliance, the plan will have seven days to notify individuals covered under the plan that the plan is not in compliance.

Guidance on the MHPAEA amendments is expected

The DOL, HHS and the Treasury Department are required to issue rules implementing the new provisions by June 27, 2022 (18 months after the law was signed). The Act directs the departments to include guidance regarding the process and timeline for current and potential participants and beneficiaries (and their authorized representatives and health care providers) to file complaints of plans being in violation. The guidance should cover, by plan type, the relevant state, regional or national office with which such complaints should be filed.

The departments are expected to issue guidance updates at least every two year, during which findings of noncompliance in NQTL analyses will be reported.

The departments are also required to issue a Compliance Program Guidance Document to help improve compliance. Congress instructs the departments to consider the DOL/HHS 2016 publication Warning Signs — Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance.

Plan sponsor considerations

Plan sponsors will need to perform and document NQTL comparative analyses. For plans with one or more third-party administrators, this will require coordination to confirm and collect the analyses.

Until the expected regulatory guidance is issued to provide greater detail about the analyses expected by the departments, plan sponsors should make every effort to comply in good faith with the new requirements.

The new requirements may create an increase in complaints by plan participants regarding parity NQTL noncompliance. Plans that receive participant of beneficiary complaints should work diligently to resolve them. Any complaint that reaches a federal department will increase the likelihood that an NQTL comparative analyses will be requested. Plans under federal audit should expect that the oversight department may request these analyses.

Plans that are found in noncompliance and required to notify enrollees will face increased litigation risk.