On April 2, 2021, the Departments of Labor, Health and Human Services, and Treasury (Departments) released FAQs on the new mental health parity comparative analysis requirement passed under the Consolidated Appropriations Act of 2021 (CAA). The CAA requires plans and issuers perform an analysis that documents compliance with the non-quantitative treatment limitation provisions of the Mental Health Parity and Addiction Equity Act of 2008. Further, the CAA requires plans and issuers to provide this analysis to plan participants, the Departments, or relevant state agencies, upon request.
- As of February 10, 2021, plans and issuers must provide a comparative analysis if requested by plan participants, the Departments, or relevant state agencies.
- Employers may want to check with their carrier (if fully insured) or third party administrator (if self-insured/level funded) to determine what steps are being taken to comply with the new requirements, to request a copy of the latest comparative analysis and supporting documentation (if any), and to request a new comparative analysis be completed.
- If a comparative analysis is requested, employers should work with their insurance carrier (if fully insured) or third-party administrator (if self-insured/level funded) to produce the analysis and relevant documentation.
The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prohibits group health plans sponsored by employers with more than 50 employees from imposing higher financial requirements (such as insurance and copays) or stricter treatment limitations (such as visit limits) on mental health and substance use disorder (MH/SUD) benefits as compared to medical/surgical benefits. As such, plans and issuers are prohibited from imposing more restrictive non-quantitative treatment limitations (NQTLs) on MH/SUD benefits that may result in MU/SUD claims being reviewed with more scrutiny and more frequently than medical/surgical claims.
On December 27, 2020, the CAA was passed, which amended the MHPAEA to expressly require group health plans that offered MH/SUD benefits to perform and document a comparative analysis on the design and application of NQTLs on MH/SUD benefits. The NQTL comparative analysis must look at the internal process that plans use to review and approve MU/SUD claims and compare it to the process used for medical/surgical claims to ensure they are “in parity.” As of February 10, 2021, plans and issuers must make this comparative analysis available to plan participants and applicable federal or state agencies upon request.
In addition, the CAA requires the DOL to request a comparative analysis from at least 20 plans each year, beginning in 2021. The DOL has indicated that MHPAEA compliance is an enforcement priority and that they intend to focus on NQTLs related to prior authorization requirements for in- and out-of-network inpatient services, concurrent review for in- and out-of-network inpatient and outpatient services, standards for provider admission into a network, and in- and out-of-network reimbursement rates.
Frequently Asked Questions
How is the CAA NQTL comparative analysis requirement different from previous MHPAEA requirements?
The CAA now explicitly requires plans and issuers to conduct and document a NQTL comparative analysis and provide that analysis upon request. Prior to the CAA amendment, MHPAEA required plans and issuers “to comply” with NQTL requirements but plans were not specifically required to perform a comparative analysis.
To help plan sponsors and carriers determine whether a plan complies with MHPAEA, the DOL provides a MHPAEA Self-Compliance Tool. Among other guidance, the MHPAEA Self-Compliance Tool outlines a process for analyzing whether a particular NQTL meets the MHPAEA requirements.
Which plans are subject to the NQTL comparative analysis requirement?
Group health plans that are sponsored by employers with more than 50 employees that offer MH/SUD benefits and impose NQTLs on those benefits must complete and document the comparative analysis.
What is a non-quantitative treatment limitation (NQTL)?
NQTLs are generally limitations on the scope or duration of benefits for treatment that cannot be expressed numerically. NQTLs include, but are not limited, to the following:
- Medical management standards limiting or excluding benefits for medical necessity;
- Prior authorization requirements;
- Plan or issuer methods for determining usual, customary, and reasonable charges;
- Restrictions on applicable provider billing codes;
- Standards for accessing out-of-network providers;
- Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective.
How can plans conduct the NQTL comparative analysis?
The Departments point out that the information gathered when using the DOL MHPAEA Self-Compliance Tool’s process for determining NQTL compliance closely aligns with the information that must be included in the CAA comparative analysis. Therefore, plans and issuers that use the Self-Compliance Tool to analyze and document NQTL compliance will be in a strong position to comply with the CAA comparative analysis requirements.
Specifically, the Self-Compliance Tool outlines a four-step process for analyzing whether a particular NQTL meets the MHPAEA requirements. For each step, the Self-Compliance Tool identifies certain information needed to support the analysis and the conclusions reached on whether the plan complies with MHPAEA. The Self-Compliance Tool also provides examples and compliance tips on how to conduct the comparative analysis of NQTLs, as well as potential warning signs that may indicate non-compliance.
What information must a NQTL comparative analysis contain?
The comparative analysis must contain a written detailed explanation of whether processes, strategies, evidentiary standards, or other factors that apply a NQLT to MU/SUD benefits are comparable and are not applied more stringently than to medical/surgical benefits. The CAA requires, at a minimum, that the comparative analysis contain a robust discussion of 9 elements:
- A clear description of the specific NQTL, plan terms, and policies at issue;
- Identification of the specific MH/SUD and medical/surgical benefits to which the NQTL applies;
- Identification of any factors, evidentiary standards, or processes considered in the application of the NQTL to MH/SUD and medical/surgical benefits;
- If any factors, evidentiary standards, strategies, or processes are defined in a quantitative manner, the precise definitions used;
- Explanation of whether there is any variation in the application of a guideline or standard between MH/SUD and medical/surgical benefits;
- If the application of the NQTL turns on specific decisions, the nature of the decisions, the decision makers, the timing of the decisions, and the qualifications of the decision makers;
- If the plan relies on experts, the experts’ qualifications and the extent to which the plan relies on the experts’ evaluations when setting recommendations for MH/SUD and medical/surgical benefits;
- A discussion of the plan’s findings and conclusions as to the comparability of the process, strategies, evidentiary standards, and factors of the above categories and the plan’s compliance with MHPAEA; and
- The date of the analysis and the name, title, and position of the persons who performed the comparative analysis.
What documentation may be requested from the Departments to support the comparative analysis?
Plans and carriers should be prepared to provide documents that support the conclusions of the NQTL comparative analysis. The DOL highlights the following documents that it may request from a plan to support a comparative analysis:
- Records documenting NQTL processes and how NQTLs are applied to medical/surgical and MH/SUD benefits;
- Any materials that have been prepared for compliance with any applicable reporting requirements under state law;
- Documentation (e.g., guidelines, claims processing policies and procedures) the plan or issuer relied upon in determining the NQTLs are applied no more stringently to MH/SUD benefits that medical/surgical benefits;
- Samples of covered and denied MU/SUD and medical/surgical claims; and
- Documents related to MHPAEA compliance from the plan’s service providers/vendors (if the plan delegates management of some or all MU/SUD benefits to another entity).
What if the Departments determine a plan is non-compliant?
If the Departments determine the plan or issuer has not submitted sufficient information for the comparative analysis, the Departments will specify the information the plan or issuer must provide.
If the Departments determine a plan is non-compliant after reviewing the comparative analysis, the CAA requires the plan to specify the actions it will take to come into compliance. Specifically, the plan or issuer must submit an additional comparative analysis to demonstrate compliance within 45 days of the initial determination. Following the 45 days, if the Departments still determine the plan is non-compliant, the plan must notify all enrollees that the plan is not compliant with MHPAEA within 7 days. The Departments will also share the finding of compliance or non-compliance with the state where the plan is located or where the issuer is licensed to do business.
Employers should be prepared to furnish a comparative analysis and supporting documentation if requested by plan participants, the Departments, or relevant state agencies. Since the DOL has indicated that MHPAEA compliance is an enforcement priority, employers may want to proactively conduct or obtain a comparative analysis (or have a plan in place to do so) in the event they receive a request by the DOL.
Employers may want to reach out to their carrier (if fully insured) or their third-party administrator (if self-insured/level funded) to ask what steps are being taken to comply with the new comparative analysis requirements and to request a new comparative analysis be completed. Employers may also ask whether a comparative analysis has been conducted on their plans (some carriers may have already been conducting this type of analysis to check MHPAEA compliance for fully insured plans), and if so, request a copy of the most-recent analysis. In addition, employers may want to ask for documentation that they may be required to provide to the DOL (as outlined above). If a NQTL comparative analysis is requested, fully insured employers should work with their carrier and self-insured/level funded employers should work with their third-party administrator to produce the analysis and associated documents.
- FAQs About Mental Health and Substance Use Disorder Parity Implementation and the Consolidated Appropriations Act, 2021
- The Department of Labor MHPAEA Self-Compliance Tool
- Sequoia Foreword: The Consolidated Appropriations Act of 2021
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2021 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved