On September 9, 2024, the U.S. Department of Labor (the "DOL"), the U.S. Department of the Treasury and the U.S. Department of Health and Human Services ("HHS") jointly released a regulation entitled "Requirements Related to the Mental Health Parity" (the "Parity Rule") in coordination with the Biden-Harris Administration.
The Parity Rule is intended to strengthen the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA"), which requires that employer health plans place no greater limitations on mental health care services and substance use disorder treatments than other medical services.
According to the Biden-Harris administration, the Parity Rule represents the administration's commitment to providing health care parity by making "the largest investment in youth mental health history and [] transforming how mental health is understood, perceived, and treated for all Americans," said Vice President Kamala Harris in a statement accompanying the rule's enactment. Prior to enacting the Parity Rule, HHS released a report revealing that many private insurers were not in compliance with MHPAEA. According to the report many insurers had not undertaken the required comparative analyses to compare how approval process and network access are applied to mental health services compared to other medical benefits.
Specifically, first, the Parity Rule provides that insurers cannot use Non-Quantitative Treatment Limitations ("NQTL") that are more restrictive than the predominant NQTLs applied to medical and surgical benefits to determine out of network reimbursement rates. See Requirements Related to the Mental Health Parity, at 13. NQTLs are essentially limitations on the scope or duration of treatment such as prior authorization and other medical management techniques. Id. The Parity Rule requires health plans to use similar factors in setting out-of-network payment rates for mental health. Importantly, the Parity Rule also requires that health plans have sufficient mental health providers in their networks. Although, some insurers have argued that the Parity Rule will result in an increase in demand for mental health services that will outpace the number of eligible providers which will result in increased costs and decreased standards of care across the board.
Second, the Parity Rule clarifies that insurers and health plans have a responsibility to undertake an analysis regarding the NQTLs for mental health care versus medical and surgical health care. See Requirements Related to the Mental Health Parity, at 13. The Parity Rule requires health plans and insurers to evaluate data and take action to address "material differences" in access to mental health and substance use disorder benefits compared to medical benefits. "It shouldn't be harder for you to find a provider that can treat your eating disorder than it is to find a provider who can treat your ulcer" said the head of the DOL's Employee Benefits Security Administrations Lisa M. Gomez.
Under the Parity Rule, the DOL has the authority to demand the comparative analysis from insurers for each of their NQTLs. If the DOL finds that a plan is not in compliance with the MHPAEA then the insurer is responsible for submitting a corrective action plan within 45 days to fix the lack of compliance. See Requirements Related to the Mental Health Parity, at 157. If following the corrective action plan an insurer is still out of compliance with the MHPEAEA, then the health plan is required to issue a notice stating ""Attention! The [Department of Labor/Department of Health and Human Services/Department of the Treasury] has determined that [insert the name of group health plan or health insurance issuer] is not in compliance with the Mental Health Parity and Addiction Equity Act." Id. at 215. However, while the expectation is that the health plan will come into compliance with the MHPAEA after issuing this notice, there are no penalties or other enforcement mechanisms prescribed by the act for continued noncompliance.
Lastly, the Parity Rule will also help close existing loopholes that allowed state and local government health plans to forgo the Act's requirements. The Parity Rule now requires that non-federal governmental health plans offered to state and local government employees have the same access requirements as their federal and private counterparts. SeeRequirements Related to the Mental Health Parity, at 12. This means that over 120,000 consumers will now have better access to mental health care and substance use disorder providers.
Takeaway:
The Parity Rule implemented by the Biden-Harris Administration will potentially improve access to mental health and substance use care. The new requirements will require a detailed analysis from employers with self-insured plans to determine whether their mental health benefits comply with MHPAEA. This will help ensure that millions of individuals receive affordable mental health and substance use care across the country.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.