State and federal regulators, Congress, and the plaintiffs' bar are increasingly focused on compliance with the Mental Health Parity and Addiction Equity Act (MHPEA), particularly given the opioid epidemic and COVID-19's impact on mental health. MHPAEA compliance and enforcement is a top priority for the United States Department of Labor (DOL) and the National Association of Insurance Commissioners (NAIC) with market conduct exams, state attorneys general investigations, and DOL investigations and subpoenas focused specifically on MHPAEA. A recent amendment to MHPAEA requires DOL, the Department of Health and Human Services, and the Treasury (collectively, the Departments) to audit MHPAEA compliance for at least 20 health plans each year, beginning February 10, 2021.
Buried in the Consolidated Appropriations Act, 2021, enacted in late December 2020, Congress formalized longstanding MHPAEA compliance "best practices" giving them the force of law. Beginning February 10, 2021, health plans must make available upon request to the Departments the following information:
- The specific terms of coverage regarding each non-quantitative treatment limitation (NQTL) and all medical or surgical (med/surg) and mental health and substance use disorder (MH/SUD) benefits to which each NQTL applies in each benefit classification;
- The factors used to determine whether an NQTL will apply to med/surg and MH/SUD benefits;
- The evidentiary standards used to define, evaluate, and apply the factors and any evidence or source used to design and apply the NQTL;
- Comparative analysis demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply each NQTL to MH/SUD benefits, both as written and in operation, are comparable to and applied no more stringently than those used to apply each NQTL to med/surg benefits in the same benefit classification; and
- The specific findings and conclusions reached by the plan or issuer regarding compliance or non-compliance.
If the Departments determine that a plan or issuer is not in compliance, the plan or issuer would have 45 days to correct the issue. If the Departments conclude that the plan or issuer has not sufficiently corrected the deficiency, then they will provide notice of the noncompliance to all of the plan's or issuer's members within 10 days. The Departments also will share the findings with state regulators in the state where the plan is located or the issuer is licensed to do business.
Although the statutory compliance requirements are based on elements in the DOL's MHPAEA Self-Compliance Tool, there is no uniform standard for how the comparative analysis should be formatted or conducted. On April 2, 2021, the Departments issued guidance explaining that carefully applying the Self-Compliance Tool should put plans and issuers "in a strong position to comply with the . . . comparative analyses" requirement. That guidance also outlined additional elements that the Departments expect "at a minimum, sufficient analyses must include," such as:
- An explanation of whether there is any variation in the application of a guideline or standard used by the plan or issuer between MH/SUD and med/surg benefits and, if so, the process and factors used for establishing that variation;
- If the application of the NQTL turns on specific decisions in administration of the benefits, the plan or issuer should identify the nature of the decisions, the decision maker(s), the timing of the decisions, and the qualifications of the decision maker(s);
- If the plan's or issuer's analyses rely upon any experts, the analyses, as documented, should include an assessment of each expert's qualifications and the extent to which the plan or issuer ultimately relied upon each expert's evaluations in setting recommendations regarding both MH/SUD and med/surg benefits;
- Citations to any specific evidence considered and any results of analyses indicating that the plan or coverage is or is not in compliance with MHPAEA; and
- The date of the analyses and the name, title, and position of the person or persons who performed or participated in the comparative analyses.
Even with this additional information, however, the Departments note that, "[t]he precise information needed to support an NQTL analysis will vary depending on the type of NQTL and the processes, strategies, evidentiary standards, and other factors used by the plan or issuer." This is cold comfort for plans and issuers given the lack of a specific, standardized format and requirement for the level of detail and type of information required to demonstrate compliance. Leaving aside some of the challenges presented with demonstrating compliance "as written," the operational compliance component often relies on quantitative analysis of claims, reimbursement, wait time, and other data. The guidance leaves open that a plan's or issuer's in operation analysis may include necessary, but insufficient information to establish compliance.
The Departments will publish an annual report to Congress that names and shames plans and issuers that were not in compliance after a final determination, whether each plan or issuer provided sufficient information for the Departments to review, what additional information (if any) the Departments requested, what actions the plans or issuers had to take to become compliant, and other information.
Mental health coverage is a popular, bi-partisan issue in Congress. We may see additional legislation on MHPAEA compliance and enforcement, including establishment of civil monetary penalties for MHPAEA violations (in addition to existing penalties available under ERISA for breach of fiduciary duty), increased damages for private litigation, and other measures.
Finally, the Departments are gathering information on in-network reimbursement and network adequacy to develop additional guidance.
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