The Consolidated Appropriations Act, 2021 (CAA) added a requirement for health plans to document their compliance with nonquantitative treatment limitations (NQTLs) under the Mental Health Parity and Addiction Equity Act (MHPAEA). NQTLs are non-dollar or non-numerical limits, such as medical necessity or prior authorization requirements, standards for in-network provider admission, formulary design, step-therapy protocols, etc. MHPAEA generally requires that NQTLs applicable to mental health and substance use disorder (MH/SUD) benefits are comparable to and no more stringent than those applied to medical and surgical benefits. For additional information about MHPAEA, the CAA’s written NQTL analysis requirement, and additional guidance on this matter since the CAA, refer to Foley’s prior articles on these topics, available here and here.
While the requirement to maintain a written analysis of the parity of a plan’s NQTLs is currently in effect, the Department of Labor (DOL), Department of the Treasury (Treasury) and Department of Health and Human Services (HHS and together with DOL and Treasury, the “Departments”) have expressed disappointment with the level of compliance with this requirement, both in the 2022 MHPAEA Report to Congress (available here) and in the more recent 2023 MHPAEA Report to Congress (available here). In part to help address the general insufficiency of written NQTL analyses, the Departments released proposed rules on July 25, 2023 (the “Proposed Rules”), which provide additional detail and guidance on the written NQTL analysis.
Though these rules are in proposed form, they make clear where the Departments believe health plans are failing to comply when preparing their written NQTL analysis. In addition to providing details regarding what needs to be included in the written NQTL analysis, the Departments take the time in the Proposed Rules to highlight several problematic plan terms and areas of common noncompliance. The following are several action steps that health plans should take today, before the Departments issue final rules, to avoid compliance issues down the road.
1. Create and Maintain a Written NQTL Analysis
For plan sponsors of self-insured health plans who have not yet gone through the process of creating a written NQTL analysis for their plans, consider making this a top priority in the coming months. The Departments have made clear they are serious about the written NQTL analysis requirement and consider MHPAEA compliance a top priority. Plan sponsors need to ensure that they have a written NQTL analysis that aligns with the terms of the health plan and must maintain the analysis, updating it as appropriate when plan terms change or as otherwise necessary to meet requirements to demonstrate that NQTLs are in parity in operation and not just as written.
Since the CAA was passed, it has become common practice in the industry for third party administrators to provide a sample or template NQTL analysis to self-insured plans, which requires customization and additional analysis by plans to finalize. Several vendors have arisen in this area to assist plans in helping create a complete written NQTL analysis which aligns with the specific terms of the plan. The Proposed Rules provide a large amount of detail expanding upon the core requirements of the CAA and impose data-heavy evaluations. While this additional detail might be helpful to the Departments for a more robust analysis, it also makes the process more complex, such that plans that did not use a vendor initially may want to consider using a vendor to help incorporate all requirements once the Proposed Rules are finalized. Do not wait until the Departments come knocking to start your NQTL analysis. Take steps now to demonstrate your plan’s NQTL compliance.
2. Remove Red Flags From Health Plans
The Departments have consistently highlighted certain types of plan exclusions or limitations as problematic or out of compliance and addressed these areas again in both the 2023 MHPAEA Report to Congress and the Proposed Rules. The following plan exclusions or limitations are some of the red flags called out by the Departments:
- Exclusion of ABA therapy;
- Exclusion of medication-assisted treatment or medications for opioid use disorder;
- Exclusion of nutritional counseling for MH conditions (i.e., counseling for eating disorders);
- Provider experience requirements beyond licensure only applicable to MH/SUD providers for network admission;
- Exclusion of residential care or partial hospitalization for MH/SUD conditions;
- Differing methods of reimbursement for MH/SUD providers than comparable medical/surgical providers that result in lower reimbursement rates for MH/SUD providers;
- Medical management techniques (e.g., prior authorization) imposed on MH/SUD benefits but not comparable medical or surgical benefits (e.g., autism therapies v. occupational and physical therapies); and
- Exclusions for MH/SUD telehealth services when other telehealth services are covered.
These are just some of the potential plan exclusions or limitations that a health plan may have that cause it to fall out of compliance with MHPAEA under current guidance. Plan sponsors should review their plans carefully for these red flags and confer with their service providers regarding removing or revising these exclusions or limitations. Plan sponsors should also consider performing a more general MHPAEA compliance review of their group health plans, with an emphasis on the Department’s six areas of focus:
- Prior authorization requirements for in-network and out-of-network inpatient services;
- Concurrent care review for in-network and out-of-network inpatient and outpatient services;
- Standards for provider admission to participate in a network, including reimbursement rates;
- Out-of-network reimbursement rates (methods for determining usual, customary, and reasonable charges);
- Impermissible exclusions of key treatments for mental health conditions and substance use disorders; and
- Adequacy standards for MH/SUD provider networks.
A few years into the CAA’s NQTL written analysis requirement, the Departments continue to make MHPAEA compliance an enforcement priority. The Departments have expressed frustration that some plans fail to start their written NQTL analysis until after a DOL request for the analysis and that health plans continue to include exclusions and limitations that the Departments have consistently flagged as problematic under MHPAEA. While self-insured plan sponsors may contract with service providers and vendors to assist with their MHPAEA compliance, the ultimate legal responsibility falls on the plan sponsor. Plan sponsors should take steps now and work with their service providers to bring plans into compliance with MHPAEA, including maintenance of a written NQTL analysis. Plans that take steps now will be ahead of the curve when the Proposed Rules are finalized.
Plan service providers should closely examine their off-the-shelf benefits offerings to determine if their standard health plan might contain some of the red flags discussed above and, if so, perform a global correction (to its entire book of business) to avoid bigger issues with the Departments in the future, as the Departments have already previously required some third party administrators to work with all of their plan customers to essentially perform global corrections. Plan service providers should also get very familiar with the Proposed Rules now, because if they become finalized, there will be several new data assessments and evaluations that will need to be completed, and likely new software or other resources will be needed in order to satisfy the requirements set forth in the Proposed Rules.
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