For the first time in U.S. history, overdose deaths have exceeded 100,000 per year and one person dies by suicide every 11 minutes. The U.S. continues to experience a mental health (MH) and substance use disorder (SUD) (behavioral health) crisis of unprecedented proportions.

In a powerful move, government agencies reunited to collectively address the long-standing challenges to balancing patient behavioral health treatment needs with health plan and insurer fiduciary financial responsibilities to its insured population by proposing a new rule to enforce the Mental Health Parity and Addiction Equity Act (MHPAEA).

Treatment Limitations

Treatment limitations on behavioral health benefits may create barriers to receiving care. A July 2023 report from the U.S. Department of Labor Employee Benefits Security Administration describes these treatment limitations as:

exclusions of specific treatments for covered mental health conditions or substance use disorders, disparate ways of determining reimbursement rates for MH/SUD providers than for medical/surgical providers, plan practices … that prevent MH/SUD providers from joining a plan’s network, and stricter prior authorization or medical necessity reviews for MH/SUD coverage.

Treatment limitations can occur in the form of quantitative treatment limitations (QTL), financial limitations, or nonquantitative treatment limitations (NQTL).

MHPAEA’s Purpose

MHPAEA requires covered individual and group health plans and issuers of health insurance to identify, collect, and evaluate data concerning financial limitations, QTLs, and NQTLs, as well as mitigate the material differences that occur when MH/SUD benefits are compared to medical and surgical benefits.

MHPAEA’s purpose is to ensure that health plan members who seek MH/SUD treatment do not face greater barriers than health plan members who seek medical or surgical treatment.

2023 Proposed Rule Has Significant Changes

On Aug. 3, 2023, the federal departments of Labor, Health and Human Services, and Treasury, the IRS, the Employee Benefits Security Administrations and the Centers for Medicare & Medicaid Services jointly released a comprehensive proposed rule to amend the MHPAEA.

The proposed rule regulates the financial requirements, QTLs, and NQTLs that health plans use when designing and administering plan benefits, and provides crucial instruction to the state departments of insurance and regulated health plans on how the departments plan to facilitate and guide increasing enforcement of MHPAEA’s requirements and stricter penalties for noncompliance.

The 2023 Proposed Rule is comprehensive, and addresses a number of significant challenges. The Proposed Rule:

• describes the statutory requirement that Health Plans conduct meaningful comparative analyses to measure the impact of NQTLs including prior authorization, provider rates, and network composition;

• outlines six elements that must be included in a health plan NQTL comparative analysis:

  • a description of the NQTL;

  • identification and definition of the factors used to design or apply the NQTL;

  • a description of how factors are used in the design or application of the NQTL;

  • a demonstration of comparability and stringency, as written;

  • a demonstration of comparability and stringency in operation; and

  • findings and conclusions;

• establishes form requirements for the comparative analysis including the date of the analysis, the title and credentials of all relevant participants, an assessment of any experts' qualifications, and signature by a health plan fiduciary;

• adds new definitions, amends existing definitions, and clarifies when and how a NQTL may be used on MH/SUD benefits. Commentary to the Rule discusses the need for increased guidance, noting that the Departments have consistently found that none of the NQTL comparative analyses reviewed contained enough information or documentation;

• affirms that provider rates and network composition are NQTLs subject to MHPAEA’s comparability requirements;

• prohibits health plans from relying on factors or evidentiary standards that discriminate against MH/SUD benefits;

• requires health plans to measure the data collected and evaluate the outcomes resulting from the application of a NQTL to MH/SUD benefits;

• outlines the timeframes and processes for how health plans should submit the required NQTL comparative analyses to the departments, applicable state regulatory authority, health care provider, or health plan member;

• discusses potential penalties for third-party administrators (TPAs) who do not comply with MHPAEA.

Conclusion: Effective Dates in 2025 and 2026

The comment period for the 2023 Proposed Rule ended Oct. 17, 2023. Once the rule is finalized, the effective date for group health plans will be Jan. 1, 2025, and the effective date for individual health plans will be Jan. 1, 2026.

If finalized as drafted, the 2023 Proposed Rule will substantially change current MHPAEA regulations and require health plans to move quickly to attain compliance.

This article was originally published on the State Bar of Wisconsin’s Health Law Blog. Visit the State Bar sections or the Health Law Section webpages to learn more about the benefits of section membership.