On August 3, 2023, the U.S. Departments of Labor (“DOL”), Health and Human Services (“HHS”), and the Treasury (collectively, the “Agencies”) published proposed rules related to the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) in the Federal Register. If finalized, the proposed rules will amend the existing MHPAEA regulations and implement new requirements for the nonquantitative treatment limitation (“NQTL”) comparative analysis required under the Consolidated Appropriations Act, 2021 (the “CAA”).
MHPAEA generally requires that group health plans and health insurance issuers that provide coverage for mental health and/or substance use disorder (“MH/SUD”) benefits ensure that the financial requirements (e.g., coinsurance and copayments) and treatment limitations (e.g., visit limits) on MH/SUD benefits are no more restrictive than those that apply to medical/surgical benefits. Additionally, the existing MHPAEA regulations prohibit a plan or issuer from imposing an NQTL on MH/SUD benefits unless, under the plan 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, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL to medical/surgical benefits. NQTLs impose non-numerical limits on benefits, such as medical necessity requirements, precertification requirements, and standards for provider reimbursement rates, amongst others.
The CAA amended MHPAEA to require plans and issuers to perform and document a comparative analysis of the design and application of NQTLs under the plan. Upon request, a plan must provide its comparative analysis to the Agencies. The CAA outlined the information which must be included in each plan’s comparative analysis and the Agencies released further guidance on the content requirements for the NQTL comparative analysis in April of 2021. Plan sponsors and fiduciaries of self-insured group health plans have struggled to prepare comparative analyses that comply with the Agencies’ guidance, in part due to the complexity of the guidance and in part due to the fact that most of the information necessary to prepare the analysis is in the possession of third party claims administrators (“TPAs”) and pharmacy benefit managers (“PBMs”) that process claims under the plan. According to the Department of Labor, none of the comparative analyses they collected from employers in 2021 and 2022 satisfied the content requirements of the CAA and the Agencies’ previously published guidance.
The proposed rules formalize and expand upon the comparative analysis requirement. Notably, the proposed rules would require a plan fiduciary to certify that upon review, it found the comparative analysis to comply with the content requirements of the rules. Presumably, this new plan fiduciary certification requirement is an attempt by the Agencies to get plan sponsors and fiduciaries to pay more attention to the NQTL comparative analysis requirement, given the reported universal failure of collected analyses to satisfy the Agencies’ requirements.
In addition to the new certification requirement, the proposed rules apply the “substantially all” and “predominant” requirement to NQTLs – previously this requirement only applied to MHPAEA’s quantitative/financial requirements. An NQTL cannot be applied to MH/SUD benefits that is more restrictive than the “predominant” NQTL that applies to “substantially all” medical surgical benefits in the same benefit classification. For example, if a plan does not apply a precertification requirement to “substantially all” (i.e., 2/3rds of) medical/surgical benefits in the in-network in-patient classification it would not be able to apply a precertification requirement to any MH/SUD benefit in that classification. This requirement is applied based on the expected dollar amount of a plan’s claims payments for the plan year being tested.
The Agencies are seeking comments on the proposed rules through October 2, 2023. Although these rules, if finalized, will not be effective until 2025, plan sponsors and fiduciaries should begin taking steps to ensure compliance. Compliance with MHPAEA is a top priority for the Agencies. Ensuring compliance under the proposed rules will take greater engagement than has previously been undertaken by plan sponsors and fiduciaries.
As noted, for employers who self-insure their group health plan benefits, TPAs and PBMs largely hold the necessary information to prepare the comparative analysis. Those employers should reach out to their TPAs and PBMs to request assistance in preparing the NQTL comparative analysis. TPAs and PBMs are typically willing to provide a copy of their “standard” or “template” NQTL comparative analysis and provide assistance to the employer in connection with Agency inquiries and requests. Employers with insured plans should contact their insurance carriers to discuss how the carrier intends to comply with the proposed rules if finalized.