By: HUB’s EB Compliance Team

The last few years have brought increased focus on Mental Health Parity and Addiction Equity Act (“MHPAEA”) compliance and enforcement. Recently, the Employee Benefits Security Administration (of the Department of Labor) (“EBSA”) and the Centers for Medicare and Medicaid Services (of the Department of Health and Human Services) (collectively, the “Agencies”) released their annual report on MHPAEA enforcement. At the same time, they also announced the release of proposed rules regarding non-quantitative treatment limitations (“NQTLs”) under the MHPAEA. The enforcement report provides good insight into the Agencies’ current priorities.

Enforcement Report

The Agencies’ enforcement report highlights some potential benefit plan violations that employers and their plan service provider should look out for in their own plans. The main areas of concern were primarily the quantitative treatment limitations, such as dollar limits, financial and requirements. The Agencies noted violations in the following categories:

  1. Annual dollar limits on the total amount of specified benefits.
  2. Aggregate lifetime dollar limits on the total amount of specified benefits.
  3. The requirement to provide mental health or substance use disorder benefits in any of the six classifications described in the MHPAEA final regulations (inpatient and both in- and out-of-network; outpatient both in- and out-of-network; prescription drugs; and emergency care) in which medical/surgical benefits are provided if mental health/substance use disorder (“MH/SUD”) benefits are provided under the plan.
  4. Not providing parity (as defined in the rules) for financial requirements like deductibles, copayments, coinsurance, or out-of-pocket maximums.
  5. Imposing disparate limits on benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. This can be either quantitative or an NQTL.
  6. Disproportionate financial requirements and treatment limitations that determine whether or to what extent benefits are provided based on certain accumulated amounts. They include deductibles, out-of-pocket maximums, and annual or lifetime day or visit limits.

EBSA noted 18 violations in 11 investigations, mostly in self-insured plans. The violations included three violations of annual/lifetime limits, two of financial requirements, two involving quantitative treatment limitations, and ten involving NQTLs. One violation involved noncompliance with the comparative analysis requirement imposed in February of 2021.

Sample Violations

Both Agencies also listed examples of various violations uncovered in investigations. Nearly all violations required plan design changes, reprocessing of claims and additional payments by the plans involved, or both. The examples show areas that plan sponsors and their service providers should review when assessing their own plans:

  • EBSA found several plans that contained blanket preauthorization requirements for all outpatient mental health and substance use disorder benefits, while only some outpatient medical/surgical benefits required preauthorization. As a result of their findings, the blanket preauthorization requirement was removed and replaced with a limited list of outpatient MH/SUD benefits requiring preauthorization.
  • One plan excluded coverage for all residential treatment for mental health and substance use disorders but did not include a comparable exclusion for medical/surgical care. The plan also excluded coverage for treatment of chronic mental health or substance use disorder conditions that had achieved the maximum therapeutic benefit, but there was no comparable exclusion for medical/surgical benefits.
  • Another plan limited nutritional counseling coverage to three visits per calendar year. The plan carved out an exception to this limitation for the treatment of diabetes (a medical/surgical condition) but did not include a carve out for any mental health or substance use disorder benefits.
  • A plan imposed a higher copay for outpatient, in-network MH/SUD benefits than the predominant copay applied to substantially all medical/surgical benefits in that same benefit classification.
  • One plan placed improper financial requirements on in-network, outpatient MH/SUD benefits compared to in-network, outpatient medical/surgical benefits, and participants were paying impermissibly high copays.
  • A self-insured plan violated MHPAEA as it contained an impermissible separate treatment limitation for applied ABA therapy, which is a primary treatment for autism. The plan also imposed an additional requirement of a treatment plan prior to the therapy, which was not permitted.
  • During an NQTL investigation, a plan was found to have an impermissible separate treatment limitation for MH/SUD benefits, as it required the treating facility to certify that the patient completed the "full continuum of care necessary and available at that facility." If the patient did not fulfill that requirement, then the plan would not provide coverage. There was no similar requirement applied to medical/surgical benefits in the classification.
  • An NQTL investigation revealed impermissible separate treatment limitations in the form of continued-stay criteria for MH/SUD benefits. The plan required evident progress for continued care coverage. The investigation also revealed discharge criteria for MH/SUD benefits resulting in a possible loss of coverage for the treatment if there was no significant improvement in the member’s condition or the member left a treatment facility (or program) against medical advice. No similar criteria were applied to medical/surgical benefits in the same classification.
  • In its NQTL comparative analysis, one insurance carrier used different distance and time standards for determining if its network was adequate for medical/surgical facilities than were used for MH/SUD inpatient facilities.

Proposed Rules

In addition to the enforcement report, the federal departments responsible for MHPAEA enforcement also issued proposed regulations on the NQTL requirements. The proposed rules address three primary areas. First, they provide proposed definitions for many of the terms pertaining to NQTL analysis, including “factors,” “processes,” “strategies”, and “treatment limitations” as well as “mental health benefits,” “substance use disorder benefits” and even “medical/surgical benefits.”

With regard to NQTLs, the proposed rules also would only allow NQTLs to be imposed on MH/SUD benefits if:

  • the limitation is no more restrictive than those applied to medical/surgical benefits,
  • the plan/insurer satisfies requirements related to the design and application of the NQTL, and
  • the plan/insurer collects, evaluates, and considers the impact of relevant data on access to MH/SUD benefits relative to access to medical/surgical benefits and takes reasonable action to address any material differences.

There is significant nuance underneath those three conditions, as well as examples. The proposed regulations would allow narrow exceptions based on independent professional medical or clinical standards or that are related to fraud, waste, and abuse.

Finally, the proposed regulations would codify the requirement to conduct the NQTL comparative analysis that the agencies first introduced in February 2021. The rules, if finalized, would provide additional details on form and content requirements, which is welcome clarity for plans and issuers. For ERISA plans, a fiduciary would be required to certify they reviewed the analysis and that it does or does not comply with the content requirements.

Along with the proposed rules, the departments also issued a technical release requesting comments on proposed data requirements for network composition as well as an enforcement safe harbor. This suggests additional proposed regulations will be forthcoming.

Takeaways

Because the rules are proposed, they are not effective at this time. Even so, plan sponsors may want to peruse the proposed rules to understand where the departments could ultimately land with their final guidance. Additionally, the enforcement report provides great context for plans on the current enforcement priorities of the Agencies and the potential pitfalls plans may encounter on the road to MHPAEA compliance. Employers should raise the enforcement report with their plan service providers to discuss whether any changes are necessary to their own plans to bring them into MHPAEA compliance.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

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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 or individual'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 or your organization’s particular needs.