By: HUB’s EB Compliance Team

The Departments of Labor, Treasury, and Health and Human Services (the “Departments”) recently issued their first report to Congress under their new enforcement authority, enacted as part of the Consolidated Appropriations Act, 2021 (the “Act”) discussed here. Separately, the Department of Labor (“DOL”) issued its annual Mental Health Parity enforcement fact sheet. Both releases provide significant insight into potential Mental Health Parity and Addiction Equity Act (“MHPAEA”) violations and actions plan sponsors can take to avoid them in the future.

By way of background, MHPAEA requires carriers and self-funded group health plans offering mental health/substance use disorder coverage to do so in parity with analogous medical/surgical coverage offered under the plans.

Non-Quantitative Treatment Limitations (“NQTLs”)

Under the Act, self-funded plans and insurance carriers for insured plans are required to provide proof, by way of an analysis of NQTLs, upon request from a federal agencies or certain state authorities. The initial requests for these reports began February 10, 2022.

NQTLs are access-to-care restrictions 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 to be prepared and provided by self-funded plans and carriers must include 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. This is not an analysis that usually can be prepared by the plan administrator but instead typically requires the assistance of the third-party administrator (“TPA”) or a firm that specializes in NQTL analysis (or both).

Departments Report to Congress

The Departments’ first report to Congress highlights significant deficiencies for most employers which include the following:

  • DOL issued 156 letters to plans and insurers requesting analyses. All 156 plans and insurers have responded, although DOL notes that many plans/insurers were unprepared when approached by DOL. This is not surprising considering these plans had roughly 45 days’ notice, following the enactment of the Act that these reports would be requested.
  • Of the 156 letters, 134 were sent to self-insured plans.
  • After analyzing the responses DOL issued 80 letters stating that the analyses were insufficient, requesting additional information, and identifying specific deficiencies.
  • According to the report, none of the comparative analyses reviewed to date have contained sufficient information upon initial receipt. The report describes several “common themes in deficiencies” including, among many others:
    • failure to document comparative analysis before designing and applying the NQTL;
    • conclusory assertions lacking specific supporting evidence or detailed explanation; and
    • lack of meaningful comparison or meaningful analysis.
  • The DOL initially determined that 48 NQTLs it reviewed were noncompliant. The DOL lists each type of NQTL and the number of violations per NQTL. The top 14 types of NQTLs it focused on in its enforcement included:
    • Preauthorization or precertification requirements
    • Network provider admission standards
    • Concurrent care review
    • Limitations on applied behavior analysis or treatment for autism spectrum disorder
    • Out-of-network reimbursement rates
    • Treatment plan requirements
    • Limitations on medication assisted treatment for opioid use disorder
    • Provider qualification or billing restrictions
    • Limitations on residential care or partial hospitalization programs
    • Nutritional counseling limitations
    • Speech therapy restrictions
    • Exclusions based on chronicity or treatability of condition, likelihood of improvement, or functional progress
    • Virtual or telephonic visit restrictions
    • Fail-first or step therapy requirements
  • The DOL has not yet made any final determinations of noncompliance because of the newness of this requirement.
  • So far, 26 plans and insurers have agreed to make prospective changes to their plans. The report provides several examples of corrective action that has been taken. On an issue HUB has highlighted before, some plans have removed an exclusion for applied behavior analysis (ABA) therapy to treat autism spectrum disorder as part of their corrective actions.

DOL Enforcement Highlights

The DOL also released a Fact Sheet showing its MHPAEA enforcement highlights for its most current fiscal year (which ended on September 30). The DOL’s Employee Benefits Security Administration (“EBSA”) closed 148 investigations.  It noted the following examples of violations that it found:

  • Excluding ABA therapy. In this case, the TPA offered to exclude ABA therapy for its self-insured clients. EBSA determined that was not permissible.
  • Provider reimbursement NQTLs that resulted in lower payments to, or were disproportionately applied to, MH/SUD providers and benefits when compared with M/S benefits.
  • Failing to provide detailed information about the NQTLs such that participants and beneficiaries did not have enough information regarding the application of the NQTLs to adequately appeal denials or reductions in benefits.
  • Overly restrictive medical necessity limitations on outpatient drug testing.
  • Excluding coverage for out-of-network residential treatment for MH/SUD benefits when no similar exclusion was applied to M/S benefits.
  • Participants seeking MH/SUD benefits were charged higher co-pays when compared to M/S benefits.
  • Excluding a COBRA beneficiary from employee assistance program (“EAP”) benefits.

The enforcement corrections of these errors resulted in millions of dollars of payments of claims and, in one case, millions of dollars in total penalties.

Takeaways

Employers should take note.  For fully-insured plans, compliance with these rules are the responsibility of the carrier.  However, if an employer learns of complaints or appeals regarding these issues, it should engage with its carrier to get more information.

By contrast, employers with self-insured plans should pay close attention. They should review their plan documents for any potentially impermissible exclusions (such as ABA therapy) and consult with their TPAs on the NQTLs they are applying.  Additionally, if they have not already done so, employers with self-insured plans should work with a reputable NQTL reviewer to generate a report on their plan’s NQTLs so they have it available should the Departments come looking for it.

If you have any questions, please contact your HUB Advisor. 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.