Kevin J. Malone and David Shillcutt, Members of the Firm in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, contributed to the American Health Law Association’s “Top 10 Issues in Health Law 2024,” with the article “Major Expansion of Federal Regulation of Managed Care Through the Mental Health Parity and Addiction Equity Act.”
Following is an excerpt:
In 2008, building on the earlier Mental Health Parity Act of 1996 (MHPA), the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was enacted to prevent group health plans and health insurance issuers (Health Plans) from covering mental health or substance use disorder (MH/SUD) benefits in a discriminatory manner compared to the coverage of medical/surgical (M/S) benefits. MHPAEA is enforced across insurance markets by the applicable primary regulatory authority, such as the Department of Labor (DOL) for self-funded group health plans, state departments of insurance for fully insured commercial group policies (and the DOL to the extent such groups are also covered by the Employee Retirement Income Security Act (ERISA)), the Center for Consumer Information and Insurance Oversight (CCIIO) for individual policies on federally facilitated marketplaces; and the Centers for Medicare & Medicaid Services (CMS) and state Medicaid agencies for Medicaid managed care and the Children’s Health Insurance Program (CHIP). At the time of passage, despite the MHPA, many Health Plans imposed more restrictive limits on MH/SUD benefits or excluded coverage for major categories of services, especially SUD treatments. DOL, HHS, and the Department of Treasury (Tri-Agencies) issued the first commercial market final regulations for MHPAEA in 2013 specifying that the parity requirements apply to financial requirements, quantitative treatment limitations, and non-quantitative treatment limits (NQTLs), which are generally non-numerical requirements that limit the scope or duration of benefits, such as benefit exclusions, prior authorization requirements, step therapy requirements, and standards for provider admission to participate in a network. Since then, although nearly all Health Plans now cover MH/SUD benefits and discriminatory quantitative limits and financial requirements are must less common, research has continued to indicate that patients across markets continue to have more difficulties accessing MH/SUD treatments than M/S services.
In response to these findings, the Tri-Agencies have steadily issued interpretive guidance and increased audit and enforcement activity related to MHPAEA. Despite the agencies’ efforts, Congress made material amendments to MHPAEA through the Consolidated Appropriations Act, 2021 (CAA), adding a provision that formalized and expanded upon the NQTL requirements from the 2013 Final Rule and earlier sub-regulatory guidance and required Health Plans to perform and document comparative analyses to demonstrate parity and provide them to the Tri-Agencies or to an applicable state authority upon request. Since the passage of the CAA amendments, the Tri-Agencies and state insurance regulators have significantly expanded their oversight and enforcement of MHPAEA.
However, more sweeping changes are potentially on the horizon for 2024. On July 23, 2023, the Tri-Agencies proposed regulations and guidance on the MHPAEA flowing from the CAA amendments that would, among other new requirements, impose significant additional restrictions on Health Plans’ medical management techniques and require Health Plans to collect and evaluate network adequacy data and provider reimbursement rates in order to enforce equitable access to providers of MH/SUD services compared to providers of M/S services. The Notice of Proposed Rulemaking (NPRM) goes far beyond simply enshrining the requirements of the CAA and prior Tri-Agency sub-regulatory guidance and represents the most significant expansion of the MHPAEA’s technical requirements as applied to NQTLs since the finalization of the initial MHPAEA regulations in 2013. Arguably, in its application of new sweeping requirements to utilization management, network contracting, and network adequacy, the NPRM represents the most comprehensive federal regulation of managed care practices ever implemented in the United States.
Among other significant proposals, the NPRM, if finalized, would measure differences between in-network access for providers of MH/SUD and M/S benefits. The NPRM was accompanied by Technical Release 2023-01P, which outlines the Tri-Agencies’ current thinking as to technical measures for MH/SUD provider access that they intend to use for the purpose of evaluating whether access to MH/SUD providers is lower than for M/S providers. The NPRM includes a proposed special rule that would require all Health Plans to measure access using measures to be finalized based on the Technical Release. Any “material difference” between access (as defined by those measures) for MH/SUD and M/S services would be a per se parity violation for NQTLs related to network management (including reimbursement methodologies), and the Tri-Agencies would have regulatory authority to mandate changes to the impacted NQTLs on that basis. This could give the Tri-Agencies and the state departments of insurance the right to dictate specific reimbursement rate terms and network contracting requirements for MH/SUD services based solely on data indicating differences in access.
Even if the NPRM is not finalized as proposed, MHPAEA compliance will continue to be one of the most difficult and sweeping regulatory requirements applying to Health Plans across the fully insured and self-funded markets. However, if the NPRM is finalized as proposed, Health Plans may be required to make fundamental and sweeping changes to how they implement and manage most of the core managed care functions they use to manage utilization and network access. Not to be left out, CMS has recently initiated a process to potentially impose corresponding requirements to Medicaid managed care in 2024.
Kevin discusses the article on the AHLA’s special “Speaking of Health Law” podcast, in its second episode, “Major Expansion of Federal Regulation of Managed Care Through the Mental Health Parity and Addiction Equity Act (MHPAEA),” hosted by Kathy Reep, Senior Manager, PYA. Topics include trends and developments related to mental health parity and the MHPAEA, the July 2023 proposed rule related to the MHPAEA and its implications, issues related to non-quantitative treatment limitations, and the nature of comments being submitted on the proposed rule. Watch the video or listen to the podcast above for the full episode.
