OneDigital Benefits Compliance Consulting

What is new about MHPAEA? 

The 2021 Consolidated Appropriations Act (CAA) included an amendment to the Mental Health Parity and Addiction Equity Act (MHPAEA). Broadly, MHPAEA requires group health plans that cover mental health and substance use disorder benefits (MH/SUD) provide coverage on par with medical/surgical (MED/SURGE) benefits. This does not mean a plan needs to cover all mental health treatment, only that any coverage guidelines, exclusions, provider networks, and claims practices must not be applied more restrictively to MH/SUD benefits than to MED/SURGE benefits. 

Increased Enforcement

The Department of Labor (DOL) has identified MHPAEA compliance as a top enforcement priority, with vigorous investigations now underway. The DOL considers MHPAEA enforcement essential to ensuring access to mental health treatment. Participant litigation on denied MH/SUD claims also remains a substantial risk for group health plans.

MHPAEA enforcement has long been a challenge. One particularly slippery concept pertains to non-quantitative treatment limitations (NQTLs). 

What are NQTLs? 

NQTLs are, in simplest terms, limitations on benefits that cannot be expressed numerically. A typical NQTL is a coverage guideline under which claims for outpatient psychotherapy are reviewed more frequently or paid at lower rates than a comparable MED/SURGE benefit like physical therapy. Unlike many quantitative treatment limitations (or “QTLs”) found in comparing benefits like the maximum number of outpatient visits per plan year, assessing NQTLs requires information which may not be readily available to the employer sponsor. NQTLs frequently related to the inner workings of claim administration and may result in MH/SUD claims being reviewed more frequently or restrictively than MED/SURGE claims. 

What is MHPAEA Comparative Analyses?

Starting February 10, 2021, group health plans must perform and record Comparative Analyses of the NQTLs imposed on covered MH/SUD benefits. Health plans consider certain factors when designing coverage limitations. These may include excessive utilization, recent medical cost escalation, lack of clinical efficiency, high variability in cost, lack of adherence to quality standards, or claims with high occurrence of fraud. NQTLs that may be deployed to address these factors include things like prior authorization, medical necessity management, and step therapy protocols (i.e., “fail first” requirement). 

MHPAEA does not prohibit the use of NQTLs in plan design; rather, it requires that any NQTL that is applied to MH/SUD claims not be designed or applied more stringently than how it is applied to MED/SURGE claims. 

To make the parity comparison, any differences in coverage must be based on consistent and coherent factors. Permissible sources of factors used to design NQTLs include internal claims analysis, medical expert reviews, national accreditation standards, market analysis, Medicare physician fee schedules, and evidentiary standards (e.g., published research studies, professional standards, or clinical trials). 

The Departments’ 2022 MHPAEA Report to Congress

In early 2022, the DOL, along with the Departments of Treasury and Health & Human Services issued a MHPAEA Report to Congress on investigations into plans’ and issuers’ Comparative Analyses. All were unprepared. Across 86 investigations, none of the Comparative Analyses contained sufficient information, meaningful analysis, or initial demonstration of compliance. The Report described obtaining sufficient information from plans and issuers as complex and time-consuming. 

Though no final determinations of compliance had been made at the time of the Report, the Departments shared initial impressions, identified common NQTLs analyzed for compliance, and described common ways in which a Comparative Analysis fell short. Analyses must represent a “robust discussion” of the plan’s NQTLs; general declarations of compliance and broadly-stated practices are insufficient. The Departments intent to undertake further rulemaking to clarify these compliance obligations. To Congress, the Departments recommended amendments to MHPAEA by adding monetary penalties for noncompliance, authorizing the DOL to directly pursue TPAs for parity violations, expanding access to telehealth services, and defining objective and uniform MHPAEA benchmarks. What’s clear for now is that the MHPAEA compliance bar is high, and plans need to prepare. 

Transparency and MHPAEA Compliance Go Hand-In-Hand

The DOL’s enforcement actions have also targeted transparency. Any NQTLs should be explained in claims decisions with easy-to-understand language and not hidden from members (or plan sponsors). Plan sponsors should inquire into what documents their carriers and third-party administrators (TPAs) are providing in response to employees’ requests for information on MH/SUD treatment limitations or claims guidelines. For these types of MHPAEA and ERISA document requests, the scope of information required to be produced goes well beyond the plan document and summary plan description. 

Document disclosure breakdowns leave plans vulnerable to penalties for failing to provide requested documents within 30 days. Recently, a federal court awarded the maximum $110 per day in penalties totaling $123,000 against the self-funded employer and TPA for failing to disclose claim criteria and plan documents.[1] All employers, but especially those with self-funded plans, should verify they have adequate procedures in place to respond fully and timely to any ERISA or MHPAEA document requests.

How do plan sponsors comply with the Comparative Analyses requirement?

DOL investigations and legislative action on MHPAEA compliance demand employers take necessary action. For self-funded groups relying on a TPA to decide claims and design plan coverage terms (including level-funded groups), it is impractical to complete Comparative Analyses with a sufficient level of detail. As a result, self-funded employers must work with their TPAs on MH/SUD claims review and out-of-network reimbursement practices, while keeping an ear to the ground for employee MH/SUD coverage complaints. Fully-insured groups may rely on their carriers to complete Comparative Analyses. 

Unfortunately, OneDigital cannot complete the Comparative Analyses. If a carrier’s or TPA’s responses indicate noncompliance or if they are uncooperative in sharing the requested information, please contact your legal counsel to review carrier and administrative services agreements. If areas of concern are identified, plan sponsors will want to take corrective action. 

Best Practices 

Because the Comparative Analysis is a relatively new requirement, it may not be addressed in existing administrative services agreements. Going forward, plans sponsors will want to ensure that responsibility for conducting MHPAEA Comparative Analyses, making timely disclosures to participants, and responding to any DOL audits is clearly addressed in carrier and third-party administrative services agreements.

The Comparative Analyses requirement is ongoing. Plan sponsors may also consider initiating a MHPAEA Compliance Program with training, record keeping, and policies to document ongoing Comparative Analyses efforts, respond to employee parity complaints, flag compliance issues with quarterly claims audits, and influence plan design choices.  

Last updated January 2022