Mental Health Parity and Addiction Equity Act, part 2: non-quantitative treatment limitations

This is the second in a four-part series from MZQ Consulting Benefits Compliance that will appear each Tuesday on BenefitsPRO (read part one here). The series examines the long and ongoing journey to achieving better outcomes for mental health and addiction in the U.S. health care systems. The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) is a federal law that generally prevents group health plans and health insurance issuers that provide mental health and substance use disorder (MH/SUD) benefits from imposing less favorable benefit limitations on those benefits than on medical/surgical coverage.

As easy as that is to articulate, achieving those objectives continues to be challenging. In particular, it can be daunting and confusing for employers and plans to understand and to report on, especially since the process seems to be ever-changing.

As defined in the previous article, non-quantitative treatment limitations (NQTLs) are strategies, standards, processes, and other criteria that an insurer might use to limit the scope of benefits a plan provides.

With the enactment of the Consolidated Appropriations Act, 2021(CAA) on December 27, 2020, Division BB, Title II, Section 203 expressly required that group health plans or issuers provide both M/S and MH/SUD benefits and that impose NQTLs on MH/SUD benefits perform and document a comparative analysis of both the design and the application of those NQTLs.

This specific part of the law was enacted in February of 2021. It required that issuers make those comparative analyses available to the Secretary of Health and Human Services upon request.

CMS will request at least 20 annual comparative analyses from issuers in those states where the MHPAEA is being directly enforced.

So, what’s involved in preparing these comparative analyses? Well, the following information needs to be included:

• The specific plan or coverage terms or other relevant terms regarding the NQTLs and a description of all MH/SUD and medical or surgical benefits to which each such term applies in each respective benefits classification
• The factors used to determine that the NQTLs will apply to MH/SUD and medical or surgical benefits.
• The “evidentiary standards” used for the factors identified, as well as a definition for every factor
• The comparative analyses must demonstrate that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to MH/SUD benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to medical/surgical benefits in the benefits classification.
• The specific findings and conclusions reached by the plan or issuer, including any results of the analyses, must indicate that the plan or coverage is or is not in compliance with the MHPAEA requirements.

Several action steps were implemented to assist plan sponsors in conforming with the new requirements. Issuers and health plans were now responsible for ensuring these comparative analyses were done correctly. Especially in the case of self-funded plans, employers made this a top priority. A third party, MZQ Consulting, has stepped up to assist with these written analyses, ensuring they align with the plan’s specific terms.

As with most regulations issued by the federal government, there comes a time when those regulations are updated and/or amended. Such is the case with the implementation of the NQTLs comparative analysis requirements. Proposed rules, as published in the Federal Register on August 3, 2023, would:

• Amend existing NQTL standards to prevent plans and issuers from using NQTLs to place greater limits on access to mental health and substance use disorder benefits as compared to medical/surgical benefits.
• Require plans and issuers to collect and evaluate relevant data in a manner reasonably designed to assess the impact of NQTLs on access to mental health and substance use disorder benefits and medical/surgical benefits.
• Set forth a special rule about network composition.
• Amend existing examples and add new examples on applying the rules for NQTLs to clarify and illustrate the protections of MHPAEA.
• Set forth the content requirements for NQTL comparative analyses and specify how plans and issuers must make these comparative analyses available to the Treasury Department, DOL, and HHS.
• Implement the sunset provision for self-funded, non-federal governmental plan elections to opt out of compliance with MHPAEA, as adopted in the Consolidated Appropriations Act, 2023.

These proposed rules have come about mainly because of the Department’s disappointment with the low level of compliance, as noted in the 2022 and 2023 Report to Congress.

Next week, in part three of this series, we’ll look at some obstacles employers and plan sponsors have encountered so far, as well as potential solutions. We’ll also examine how employers must select the proper vendor/partner to ensure compliance.

Dave Mordo is senior compliance advisor at MZQ Consulting. For questions or more information, please email us at engage@mzqconsulting.com.