New Federal Regulations Strengthening Mental Health Parity Coverage

On September 9, 2024, the U.S. Department of Labor (the “DOL”), the U.S. Department of the Treasury and the U.S. Department of Health and Human Services (“HHS”) jointly released regulations entitled “Requirements Related to the Mental Health Parity” (the “Parity Rule”) in coordination with the Biden-Harris Administration.

The Parity Rule is intended to strengthen the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”), which requires that employer health plans place no greater limitations on mental health care services and substance use disorder treatments than on other medical services.

According to the Biden-Harris administration, the Parity Rule represents the administration’s commitment to providing health care parity by making “the largest investment in youth mental health history and [] transforming how mental health is understood, perceived, and treated for all Americans,” said Vice President Kamala Harris in a statement accompanying the rule’s enactment. Prior to enacting the Parity Rule, HHS released a report revealing that many private insurers were not in compliance with MHPAEA. The report indicated that many insurers had not conducted the required comparative analyses to evaluate how the approval process and network access for mental health services compare to those for other medical benefits.

The Parity Rule stipulates that insurers cannot use Non-Quantitative Treatment Limitations (“NQTL”) that are more restrictive than the predominant NQTLs applied to medical and surgical benefits to determine out-of-network reimbursement rates. See Requirements Related to the Mental Health Parity, at 13. NQTLs are essentially limitations on the scope or duration of treatment, such as prior authorization and other medical management techniques. Id. Additionally, the Parity Rule requires health plans to use similar factors in setting out-of-network payment rates for mental health services.

The Parity Rule also mandates that health plans maintain a sufficient number of mental health providers in their networks. Some insurers have argued that the Parity Rule will result in an increased demand for mental health services that could outpace the number of available providers, potentially resulting in higher costs and decreased standards of care.

More specifically, the Parity Rule: (i)clarifies that insurers and health plans have a responsibility to analyze NQTLs for mental health care versus medical and surgical health care; and (ii) requires health plans and insurers to evaluate data and take action to address “material differences” in access to mental health and substance use disorder benefits compared to medical benefits. “It shouldn’t be harder for you to find a provider that can treat your eating disorder than it is to find a provider who can treat your ulcer” said Lisa M. Gomez, the head of the DOL’s Employee Benefits Security Administrations.

Under the Parity Rule, the DOL has the authority to demand that insurers provide a comparative analysis for each of their NQTLs (e.g., If the DOL finds that a plan is not in compliance with the MHPAEA, the insurer is responsible for submitting a corrective action plan within 45 days to address the noncompliance). However, there are no penalties or other enforcement mechanisms prescribed by the Act for continued noncompliance.

Lastly, the Parity Rule will also help close existing loopholes that allowed state and local government health plans to bypass the Act’s requirements. The Parity Rule now mandates that non-federal governmental health plans offered to state and local government employees meet the same access requirements as their federal and private counterparts. See Requirements Related to the Mental Health Parity, at 12. This means that over 120,000 consumers will now have improved access to mental health care and substance use disorder providers.

Takeaway:

The Parity Rule will require a detailed analysis from employers with self-insured plans to determine whether their mental health benefits comply with MHPAEA. It is the hope and expectation of the regulators that this will help ensure that millions of individuals receive affordable mental health and substance use care across the country.

If you have any questions about the Parity Rule, please contact a member of Shipman's Health Law Practice Group.