By: HUB’s EB Compliance Team

In our prior article back in February 2021, we wrote about a new non-quantitative treatment limitation (“NQTL”) analysis that was required by the year-end 2020 COVID-19 relief bill. The relevant federal agencies have now issued FAQs that provide more guidance on this requirement. The short summary is that the analysis is required to be quite detailed, but there is a self-compliance tool that may help.

Background

Under the Consolidated Appropriations Act, 2021 (the “Act”), self-funded plans and insurance carriers for insured plans are required to provide an analysis of NQTLs on request to federal agencies or certain state authorities, starting February 10 of this year.

NQTLs are items like prior authorizations, written treatment plan requirements, step therapy/fail first protocols, medical necessity reviews, or other limitations or conditions for someone to receive care that are not tied to a number (in contrast to items that are tied to a number, like copayments or day/visit limits). In general, a group health plan offering mental health or substance use disorder (“MH/SUD”) benefits cannot apply more restrictive NQTLs than it applies for medical/surgical benefits. The NQTLs do not have to be identical for both MH/SUD and medical or surgical (“M/S”) benefits, but the processes, strategies, evidentiary standards, and other factors underlying those NQTLs must be comparable.

Under the Act, the analysis provided must include the following information:

  1. The specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all MH/SUD and M/S benefits to which each term applies in each of the classification of services (e.g., inpatient, outpatient, prescription drugs, etc.);
  2. The factors used to determine that the NQTLs will apply to MH/SUD benefits and M/S benefits;
  3. The evidentiary standards used for the factors identified, when applicable, provided that every factor shall be defined, and any other source or evidence relied upon to design and apply the NQTLs to MH/SUD benefits and M/S benefits;
  4. The comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to MH/SUD benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to M/S benefits in the classification; and
  5. The specific findings and conclusions reached by the plan or issuer, including any results of the analyses that indicate that the plan or coverage is or is not in compliance with the MHPAEA requirements.

This is a significant amount of detailed information that is separate and apart from the quantitative analysis that looks almost exclusively at plan design or plan spending.

The FAQs

The recently-released FAQs provide additional detail on the reporting requirement. Of key importance for employers with self-funded plans are:

  • The FAQs confirm that a general statement of compliance with little analysis is insufficient to meet the standard. The FAQs note that completing the self-compliance tool (which is updated every two years) will go a long way to meeting this requirement. The self-compliance tool was last updated earlier in 2020 and says that documenting the comparative analysis is a “best practice”, but the FAQs confirm that this is now required.
  • The agencies confirm that the report must contain a “detailed, written, and reasoned explanation” of the plan terms and practices and the basis for the conclusion that they comply with the Mental Health Parity requirements. FAQ-2 lists nine items that must receive a “robust discussion” in the report.
  • The agencies also note in FAQ-3 some practices to avoid, such as producing large volumes of information with little explanation or analysis or merely identifying processes, standards, or strategies without looking at how they are applied in practice or discussing them. Additionally, an old, outdated analysis that does not reflect current plan terms or practices will not be sufficient.
  • The FAQs refer to the self-compliance tool for the types of records and documents that plans may need to make available in response to a request for the analysis. These are detailed records documenting processes, guidelines and standards, including how they were developed and how they are applied, as well as samples of covered and denied claims.
  • The FAQs hint that if the initial submission is insufficient, the federal agencies at least will ask for additional, specific information. They also lay out the enforcement process.
  • FAQ-6 confirms that participants and beneficiaries are entitled to a copy of the analysis as well.
  • FAQ-8 states that the Department of Labor intends to focus on the following NQTLs in its near term enforcement efforts:
    • Prior authorization requirements for in-network and out-of-network inpatient services;
    • Concurrent review for in-network and out-of-network inpatient and outpatient services;
    • Standards for provider admission to participate in a network, including reimbursement rates; and
    • Out-of-network reimbursement rates (plan methods for determining usual, customary, and reasonable charges).

The FAQs do acknowledge that this requirement was on an “expedited time frame,” but they offer no consolation that the requirement will be delayed.

Takeaways

Employers with self-funded plans should review the guidance and the self-compliance tool closely and discuss these requirements with their third-party administrators/administrative services only providers to determine if they can provide the required analysis with the necessary detail.  At the present time, HUB is reviewing potential vendors to identify those that can truly meet these robust audit requirements. Perhaps this guidance will help provide a framework for additional providers to join the marketplace.

If you have any questions, please contact your HUB Advisor. You can also view more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only, and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.