Regulators’ First Report on Mental Health Parity Analysis Finds Issues 

A much-anticipated report on group health plan and issuer compliance under the Mental Health Parity and Addiction Equity Act (MHPAEA) details regulators’ findings, specifically with regard to the required comparative analysis of nonquantitative treatment limitations (NQTLs). 

The 2021 Consolidated Appropriations Act (CAA) required agencies to deliver this annual report to Congress, with the first due by Dec. 27, 2021. During 2021, the Department of Labor (DOL) requested comparative analyses from more than 150 plans and issuers. Requests from the Centers for Medicare and Medicaid Services (CMS) went to four nonfederal governmental plans and nine issuers. Interestingly, regulators emphasized that all of the comparative analyses were insufficient when first received. The five main flaws were: 

1. Failing to identify the benefits, classifications or plan terms to which the NQTL applies
2. Failing to describe how the NQTL is designed or applied in practice to mental health or substance use disorder benefits and medical/surgical benefits
3. Providing insufficient detail on the factors, sources and evidentiary standards used for the NQTL
4. Omitting any stringency analysis of how the factors, sources and evidentiary standards are applied
5. Generally failing to show parity in NQTLs as written and in operation

When regulators make a final determination of noncompliance, the report must publicly identify the offending parties. While 45 plans and issuers have received preliminary determinations of noncompliance, the report doesn’t list any offending parties. The review process is ongoing, and how the regulators will treat corrective actions in making final determinations is unclear. Final determinations of noncompliance likely will appear in the next report to Congress.  

The report provides valuable insights into current areas of MHPAEA focus for the agencies, which:

• Selected most organizations for review based on open investigations
• Found deficiencies in most reviews and a general lack of preparedness
• Are increasing staffing and resources to support these reviews 
• Found many employers “erroneously assumed” that service providers had prepared or could prepare a compliant comparative analysis for the employer plan

The regulators identified the 14 most common NQTLs causing problems:

1. Preauthorization/precertification 
2. Network provider admission standards
3. Concurrent care review
4. Limitations on applied behavior analysis and other treatments for autism spectrum disorder
5. Out-of-network reimbursement rates
6. Treatment plan requirements
7. Limitations on medication-assisted treatment for opioid use disorder
8. Provider qualification or billing restrictions
9. Limitations on residential care or partial hospitalization programs
10. Nutritional counseling limitations
11. Speech therapy restrictions
12. Exclusions based on chronicity or treatability of condition, likelihood of improvement, or functional progress
13. Virtual or telephonic visit restrictions
14. Fail-first or step therapy requirements

The CAA requires DOL, Treasury, and Health and Human Services to finalize all NQTL guidance and regulations by June 2022. The departments indicated that they intend to update the self-compliance tool (last updated before the CAA was enacted), continue outreach and education efforts, and increase enforcement activity through the CAA review process as well as litigation. Tellingly, the report doesn’t mention of good-faith efforts or other types of relief, despite otherwise providing a large amount of practical information. 

Starting in 2022, the annual report will be due on Oct. 1, and how these reviews develop will be interesting to see. If some version of the Build Back Better Act is enacted this year, the legislation will likely include a provision permitting DOL to impose penalties for MHPAEA violations. 

As a result, MHPAEA and NQTL compliance remains a top priority for employer-sponsored coverage in 2022. At a minimum, here are some actions employers should take:

• If you have not addressed NQTLs yet, consider this report your wake-up call, and obtain a copy of the comparative analysis from your third-party administrator (TPA) and/or insurer for review.
• If you already have the analysis, review it again in light of the five insufficiencies and 14 common failures. Remember more than 160 entities provided analyses, and none were initially sufficient!
• If you still have limits on applied behavior analysis and medication-assisted treatment for opioid use disorder, consider removing them.
• Review the DOL self-compliance tool, and look for the update later this year.
• Work with your TPA, insurer and legal counsel to address shortcomings and consider corrective actions, if appropriate.

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