A word of warning for grandfathered health plans
The Consolidated Appropriations Act and No Surprises Act create numerous new burdens that health plans must comply with.
The passage of the Consolidated Appropriations Act (CAA), which contains the No Surprises Act (NSA) as part of it, means big changes for most health plans. If your plan, or plans you service, haven’t updated their documents and processes yet, now is the time.
Another major aspect of 2021-2022 compliance is the Mental Health Parity and Addiction Equity Act (MHPAEA); compliance with the parity rules is nothing new, of course, but the Department of Labor has stated its intent to ramp up its compliance auditing. This comes in the shadow of the new rule to provide an annual analysis of a health plan’s nonquantitative treatment limitations, or NQTLs.
What do both of these new legal paradigms have in common? Aside from being a huge burden on health plans, each has implications on the federal External Review requirement, which gives claimants the right to appeal certain final internal adverse benefit determinations to an Independent Review Organization (IRO).
Consumer protections
Historically, consumer enforcement mechanisms have typically included filing complaints with regulatory bodies (which can quickly overload typical government resources and can take an inordinate amount of time) and filing a civil suit in court (which is often not a practical solution and can also take many months, if not years, to resolve to finality).
When Congress passed the CAA and NSA, lawmakers recognized a need for an additional model of consumer enforcement; the Acts include some clear consumer enforcement mechanisms within them, and in a more direct manner than usual. Congress decided to essentially piggyback off the federal External Review requirement created by the Affordable Care Act (ACA).
Grandfathered plan changes
It’s 2021, and the vast majority of health plans are not grandfathered into immunity from certain ACA mandates. For the rare plan that is still grandfathered, however, one benefit that it has continued to enjoy is the ability to essentially ignore the federal External Review requirements. In other words, non-grandfathered plans have been required to allow claimants to request External Review after the exhaustion of internal appeals for certain claims, while grandfathered plans have not been required to offer this additional layer of review.
Until now, that is. The CAA has waived the full external review immunity that grandfathered plans previously enjoyed; grandfathered plans are still not subject to the full gamut of external review regulations, but there are now certain aspects that all health plans – whether grandfathered or not – will need to abide by.
No Surprises Act compliance
The CAA provides that all claimants, regardless of a health plan’s grandfathered status, enjoy the benefit of being able to appeal a final internal adverse benefit determination to an Independent Review Organization if the continued dispute involves a question of whether the health plan is compliant with the patient protection aspects of the NSA.
Prior to these new rules, External Review was only available in very limited circumstances, typically to challenge denials based on medical necessity, a service being experimental, or certain other clinical factors. Given the breadth of the NSA’s consumer protections, this may be a very large expansion, and can even potentially spill into the portion of the NSA related to disputes between health plans and medical providers.
As one example, the NSA created the concept of the QPA, or Qualified Payment Amount, upon which patient responsibility must be based, and which will typically serve as an arbitrator’s benchmark for “correct” reimbursement (in the event the health plan and provider disagree about appropriate reimbursement and end up in the NSA-created Independent Dispute Resolution). As a result, the QPA may potentially be reviewed by an IRO and an IDR entity – perhaps even simultaneously – since it is relevant to both patient responsibility (which is subject to External Review under the new rules) and the plan’s payment to a provider (subject to IDR under the new rules). The practical effects of that overlap remain to be seen.
Mental Health Parity and Addiction Equity Act Compliance
The CAA has modified MHPAEA enforcement in two ways. One way is similar to the NSA, whereby health plans are required to allow claimants to appeal perceived MHPAEA violations via External Review. That applies to grandfathered as well as non-grandfathered plans. While the parity requirement is not new, consumers’ ability to enforce the MHPAEA via External Review is a new legal development.
The other new enforcement mechanism comes in the form of a new reporting requirement; the CAA now requires all health plans to complete and submit to the Department of Labor an annual analysis of their NQTLs, or nonquantifiable treatment limitations, to ensure and document the health plan’s compliance with the parity requirements of the MHPAEA. That is, plans must show in writing that they do not apply more stringent limitations to mental health or substance abuse benefits as are applied to medical and surgical benefits.
Although the MHPAEA does not necessarily require health plans to cover mental health or substance abuse disorder benefits, the MHPAEA provides that if a plan does cover such benefits, those benefits cannot be subject to restrictions greater than restrictions placed on analogous medical and surgical benefits. That’s the P in MHPAEA. As a couple of simple examples, NQTLs include limitations such as applying pre-certification requirements to mental health claims but not to analogous medical claims, or even if there are comparably few mental health or substance abuse disorder providers in the plan’s network compared to many more medical and surgical providers.
The NQTL analysis and the data needed to inform it are quite nuanced, suffice it to say that the analysis must be comprehensive and account for not just plan language, since the regulators acknowledge that plan language is not always a good barometer of what actually happens in real life. Rather, the analysis will need to take into account plan processes as well, whether such processes are set or used by the plan itself, its TPA, a network, a utilization management vendor, or any other entity that might cause mental health or substance abuse disorder benefits to be limited to a greater extent than medical and surgical benefits.
In sum, there are now two potential areas of enforcement: providing benefits in parity (which is not a new requirement), and performing the analysis to prove that benefits are offered in parity (which is new with the CAA).
What does it all mean?
The Consolidated Appropriations Act and No Surprises Act create numerous new burdens that health plans must comply with. Practically speaking, many of those will fall to TPAs since health plans are often ill-equipped to ensure their own compliance. Health plans should check with their TPAs to see if there are any compliance “gaps”, and TPAs should check their processes (and Administrative Services Agreements) to make sure everything is in order for 2022.
In addition to the time and resources that the self-funded industry is going to have to spend to try and keep up with these new complex and still-evolving rules, External Review has been expanded as well, so health plans, TPAs, and vendors are going to need to modify their processes accordingly. Since grandfathered plans have never had to worry about the federal External Review requirements before, this will all be new – but luckily, many TPAs take care of the IRO contracting and External Review appeal submission process, so grandfathered plans may already have that infrastructure available to them.
One way or the other, the NSA and CAA mean major changes for health plans, and the ones discussed here are just the tip of the iceberg. Buckle up; 2022 is going to be a bumpy ride.
Jon Jablon joined The Phia Group’s team in 2013. As the director of Phia Group Consulting’s Provider Relations Team, Jon assists TPAs, brokers, stop-loss carriers, and other entities with disputes related to both in- and out-of-network claims, various claims payment methodologies (including reference-based pricing), appeals, medical bill negotiation, and much more.
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