Mental Health Parity and Addiction Equity Act, part 3: NQTL obstacles and solutions

This is the third in a four-part series from MZQ Consulting Benefits Compliance that will appear each Tuesday on BenefitsPRO (read part one and part two). 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.

It is no secret that many, if not most, health plan sponsors continue to struggle to comply with the Mental Health Parity and Addiction Equity Act (MHPAEA), and specifically, the requirement to conduct a comparative analysis of nonquantitative treatment limitations (NQTLs) that has been effective under the 2021 Consolidated Appropriations Act. (CAA)

With the original and ongoing intention of bringing plans into compliance, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury published significant guidance in late July. The guidance was intended to reinforce the fundamental goal of ensuring that families have the same access to mental health and substance use disorder (MH/SUD) benefits as they do physical health benefits, make it easier to get in-network mental health care and eliminate barriers to access that keep people from getting the care they need when they need it.

Along with the guidance came some proposed rules laying out the NQTL comparative analyses requirements. This technical release addressed required data submissions for NQTLs related to network composition and a potential enforcement safe harbor. There was also an enforcement report to Congress detailing how the Employee Benefits Security Administration (EBSA) worked with plan sponsors to help come into compliance with the NQTL comparative analysis requirements.

DOL had requested comments on the proposed rules and the technical release by October 2, 2023. The hope was that plan sponsors, insurers, and advocates for participants would look closely at the proposed rules and the report to Congress and provide helpful feedback to help develop a final rule.

The DOL was and is keenly aware that self-insured plans have yet to be successful in preparing or receiving comparative analyses due to a lack of information needed to comply with the requirements. The lack of access to relevant information has also handcuffed many TPAs. Even with the request for information and the templated disclosure request forms that are out there, information has yet to be forthcoming.

It had been suggested that there were ways to incentivize TPAs and insurance carriers to help facilitate compliance for the plans they design and administer. They are in the best position to conduct comparative analyses and provide them efficiently and cost-effectively. As such, the departments expected that TPAs and issuers would perform most of the work associated with the analyses because they could do so at the lowest cost and greatest scale. That has not panned out, as information gathering has been slow, incomplete, and insufficient, leaving employers in flux regarding compliance.

In the July 2023 enforcement report, where 21 reviews were done for both 2021 and 2022, the departments noted a whole host of deficiencies, which included, among other things:

• Failure to identify the benefits, classifications, or plan terms to which the NQTL applies.
• Failure to describe in sufficient detail how the NQTL was designed or applied in practice.
• Failure to identify or define in sufficient detail the factors, sources, and evidentiary standards used in designing and applying the NQTL.
• Failure to sufficiently analyze the stringency with which factors, sources, and evidentiary standards are applied.
• Failure to demonstrate parity compliance of NQTLs as written and in operation.

How can the process be remedied so that compliance and enforcement become smoother? We know that the final regulations that are eventually issued will not take effect until 2025, but there are a few things plan sponsors can do now to address proper preparation:

• Utilize the 2021 NQTL Comparative Analysis requirement as a starting point. Employers should have held on to their data from 2021. The reliance on all third parties (TPAs, PBMs, other vendors) to provide past and future data should not be assumed.
• Plan sponsors should consider creating a game plan for updating NQTL data based on current guidance. Constant communication with vendors regarding the need for data is of paramount importance. It is a key to ensuring a smooth process.
• Select a vendor with the experience, personnel, and knowledge to help you navigate the process. With more rigid enforcement in 2024 and 2025, having the right compliance partner alleviates the potential for inadvertent non-compliance and the accompanying negative ramifications.

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