The recently enacted Consolidated Appropriations Act, 2021 ("CAA") renewed the focus placed on mental health and substance use disorder benefits offered through insurance contracts and group health plans. Health plan sponsors should be prepared to review and demonstrate evidentiary support for how their health plans provide such benefits at a level that is comparable to medical and surgical benefits.
In 2008, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act ("MHPAEA"), which mandates equal coverage of treatment for mental illness and addiction. MHPAEA requires that group health plans and health insurance issuers that provide mental health and substance use disorder benefits maintain parity between those benefits and the medical or surgical benefits they provide. Parity is required for both financial (quantitative) limits, like deductibles, and for non-quantitative treatment limits ("NQTL") that the plan imposes on mental health or substance use disorder benefits. NQTL's are non-numerical limits on benefits, such as pre-authorization standards, or standards for provider admission to participate in a network.
The CAA requires group health plans and health insurers to perform and document comparative analyses of the design and application of their NQTL's. As of February 10, 2021, they must also make these analyses (as well as additional information) available to a State, the Department of Labor or the Department of Health and Human Services (as applicable), upon request.
Specifically, as it relates to mental health and substance use disorder benefits, plans will have to demonstrate by way of comparison to medical and surgical benefits NQTLs with respect to: (i) medical management standards and determination of medical necessity; (ii) prescription drug formulary design; (iii) network admission standards (e.g., credentialing); (iv) factors used in provider reimbursement; (v) methods of reaching appropriate coverage determinations for new mental health or substance use disorder treatments, such as evidence-based early intervention programs for individuals with a serious mental illness and types of medical management techniques; and (vi) examples of methods of reaching appropriate coverage determinations for which there is an indirect relationship between the covered mental health or substance use disorder benefit and a traditional covered medical and surgical benefit, such as residential treatment or hospitalizations involving voluntary or involuntary commitment.
Some states have already required health insurers to perform these comparative analyses of their NQTL's. The CAA now makes this requirement applicable nationwide, and to self-insured group health plans which are exempt from state regulation under ERISA.
What To Do Next
If you are the sponsor of a self-insured health plan, you should work with your plan's third party administrator ("TPA") to do the formal analysis required by the CAA, and to document compliance with the MHPAEA's requirements around NQTL's. When negotiating TPA contracts in the future, you may consider adding language to the agreement that requires the TPA to perform this analysis as required.
If you are the sponsor of a fully insured health plan, the insurance carrier is responsible for compliance with the CAA. However, you may want your insurance carrier to confirm it has completed the required analysis, and that it will contact you if a MHPAEA violation is found.
The CAA requires that not later than 18 months after the date of enactment of CAA, the Secretary of Labor finalize any draft or interim guidance and regulations relating to mental health parity. The draft guidance will include guidance and clarification with respect to the process and timeline for current and potential participants and beneficiaries to file complaints of such plans being in violation of the law, including guidance, by plan type, on the relevant State, regional, or national office with which such complaints should be filed. Stay tuned and if you have any questions about how this Alert applies to your plan, contact Kelly Smith Hathorn.
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