ISSUED 03/15/21
Group health plans that provide medical/surgical benefits and either mental health or substance use disorder benefits are subject to the “mental health parity” requirements per the Mental Health Parity Act (MHPA) and the Mental Health Parity and Addiction Equity Act (MHPAEA). Three different mandates apply:
• Annual or lifetime limits
• Parity as to Financial Requirements and Quantitative Treatment Limitations
• Parity as to Nonquantitative Treatment Limitations (NQTLs)
At the end of 2020, Congress passed the Consolidated Appropriations Act, 2021, which requires group health plans that impose NQTL on mental health or substance use disorder benefits must perform and document a comparative analysis on the NQTL’s design and application.
Requirements
Upon request from the applicable state or federal agency, plans shall perform comparative analysis about the design and application of NQTLs and immediately supply documentation of the comparative analysis and other information. Plans may be asked to provide the following:
• Specific plan or coverage terms regarding NQTLs and a description of all mental health or substance use disorder and medical or surgical benefits to which each term applies in each respective benefits classification;
• Factors used to determine that the NQTLs will apply to mental health or substance use disorder benefits and medical or surgical benefits;
• Evidentiary standards and any other sources relied upon to design and apply the NQTL;
• Comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to mental health or substance use disorder benefits (as written and in operation) are comparable to and applied no more stringently than those used to apply NQTLs to medical or surgical benefits; and
• Specific findings and conclusions as to whether the plan is or is not in compliance with the parity requirements.
A self-compliance tool covering many of these items is available on the Department of Labor’s website and may assist plans in compiling the required information.
Examples of Nonquantitative Treatments Limitations
• medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;
• formulary design for prescription drugs;
• standards for provider admission to participate in a network, including reimbursement rates;
• plan methods for determining usual, customary, and reasonable charges;
• refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective (also known as
• exclusions based on failure to complete a course of treatment;
• network tier design, for plans with multiple network tiers (such as preferred providers and participating providers);
• restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan;
• limitations on inpatient services for situations where the participant is a threat to self or others;
• exclusions for court-ordered and involuntary holds;
• experimental treatment limitations;
• place-of-service coding;
• exclusions for services provided by clinical social workers; and
• network adequacy.
Initiated Requests
Beginning February 10, 2021, request may be made by the Department of Labor (DOL), Health and Human Services (HHS)
or a state agency. Requests may be made in response to a complaint alleging a parity violation or via random sample.
If the agency’s review indicates a parity violation, the plan will have 45 days in which to provide additional analysis or specify the actions it will take to correct the violation. If the agency makes a final determination that the plan is still out of compliance, the plan will be required to notify all enrollees of the noncompliance within seven days of the determination.
Recommended Actions
The NQTL comparative analysis is complex. Plan sponsors will need to work with their insurance carriers and/or third-party administrators (TPA) to perform the analysis. Several options to prepare for compliance are listed below, ranging from “most to least conservative.” The consultant will have to determine which level is appropriate.
1. Request that the carrier/TPA provide current documentation before request from a state or federal agency. Plan sponsors should retain such documentation in the event they are audited in the future. Changes to NQTLs should be tracked and documented.
• This approach is suggested for self-insured groups where the TPA/Carrier is not a fiduciary for this liability.
2. Request documentation with each appropriate carrier that they “represent” they are complaint with MHPAEA’s NQTLs compliance requirements and they will supply required documentation to effectively respond to an audit. The representation should be applicable to when the group was covered with the carrier, not whether the group is currently a customer at the time of the audit request. If possible, request a representation from the carrier; they will be the fiduciary.
3. Obtain a general agreement that information and documentation needed to perform the comparative analysis will be supplied upon request for any client as described in Action 2 above.
• This may be the most practical approach for fully insured groups.