The two of us are always talking about mental health parity. We try not to be the type of friends who dominate conversations and hone in on topics that are not of general interest because we don’t want to be rude. It’s a struggle, though, because: (1) we genuinely want all Americans to have access to non-discriminatory mental health and substance use disorder care; and (2) for the past year, there is always something crazy interesting going on in parity-world. By crazy-interesting, we are referring to the arcanely detailed developments that only about 132 humans in the world care about (that estimation is courtesy of our husbands and children, all of whom are quite proudly NOT part of our select nerd group). However, if you are reading this, there is a very good chance you are part of our elite little group. Even if you are not, you might still want to hear about the latest twist in the tale of the federal government’s ongoing effort to fully enforce the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). It involves a dream, money, and power, so you know it’s a good one!
First, the dream. Every year the President gives Congress a proposed federal budget for the next fiscal year. This document is never reality-based because, quite frankly, Congress does not like being told what to do, particularly when it relates to their power of the purse. So, every presidential administration loads their budget proposals up with all types of fantastical policy and expenditure requests, knowing full well that they’ll be lucky if a fraction of the wish list is granted. Put another way, each Presidential budget request is the political equivalent of a seven-year-old girl asking for a unicorn for her birthday. She hopes against hope her parents can perform magic, or at least that they will spring for a birthday party featuring an aggrieved white pony with a gold horn strapped to its head. All she really expects, though, is a sparkly pink and purple unicorn-shaped cake. And honestly, she will accept a vanilla cupcake served on a unicorn-themed paper plate.
President Biden released his Fiscal Year 2023 budget a few weeks ago, and he mostly played to the “go big or go home” type. In just the health policy sections, he dreamily asked for things like a 27% increase to the Health and Human Services budget, a Medicaid-like public option, permanent increases to the ACA premium tax credits subsidies, and lowering the Medicare eligibility age to 60.
However, the money part of the Biden budget includes practical components too, particularly when it comes to MHPAEA enforcement. It would allot $125 million to the states to help them with parity enforcement, which is critical since state regulators are the ones responsible for approving the plan designs of fully insured group and individual health plan options. It also would give the Department of Labor (DOL) $275 million more over 10 years to ramp up parity audits. While these numbers seem huge to everyday Americans, and they would represent a significant cash influx towards carrying out regulatory authority, they are modest requests when it comes to federal expenditures. So, when it comes to parity, President Biden is asking for the cupcake he’s likely to get and not the pony.
However, what really strikes us is the power part of his parity requests. The budget asks Congress to amend ERISA to both let health plan participants and beneficiaries better record losses due to MHPAEA violations and also to allow the Department of Labor to go after third-party contractors for MHPAEA parity issues in addition to group plan sponsors. As President Biden likes to say, these requests are a big flipping deal. We analyze group health plans and their potential for parity violations all of the time—trust us when we say no plan is immune to risk. There are probably millions of people out there who have paid more in out-of-pocket costs than they should have for big-ticket mental health and substance use disorder treatment expenses. Increasing plan participants’ ability to recover losses would be huge for both patients and the plaintiff’s bar.
Even more interesting is the request to allow the DOL to go after the vendors responsible for designing and applying quantitative and non-quantitative treatment limitations (QTLs and NQTLs) for self-funded group plans. Right now, ERISA limits the DOL’s enforcement authority to the group plan sponsor, aka the employer. However, based on our experience in doing lots of NQTL and QTL analyses over the past year—including handling many cases under active DOL audit—the entities which create and are directly applying plan provisions that are not in parity are primarily plan vendors. Plan sponsors hire these vendors to conduct utilization management, provide access to a provider network, pay claims, and run the prescription drug benefit. Yes, the plan sponsor signs contracts with those entities, but they are largely contracts of adhesion. Generally, the employer has no control whatsoever over things like network adequacy, what criteria the utilization management entity used to develop and apply their prior authorization list, and how different drugs appear on which tier of the formulary. Not only that, but plenty of third-party vendors out there are refusing to even give employer plan sponsors all the information they legally need to completely evaluate whether or not NQTLs like these are constructed in parity. Yet right now, the only entity the DOL can hold responsible for MHPAEA compliance is the self-funded plan sponsor. Giving the DOL a broader enforcement authority would be a MHPAEA game-changer.
So how does this tale end? We’re not sure friends. The story is still unfolding. Congress is currently mulling over the budget, and if they decide to dedicate more money to MHPAEA enforcement, it will be through the appropriations bills for the Departments of Labor and Health and Human Services, which usually get merged with other appropriation bills and passed as part of a giant omnibus measure at the end of the calendar year. A perfect example of this phenomena is the Consolidated Appropriations Act of 2021, which is the law that started all of this mad activity in parity-world to begin with by requiring all group health plan sponsors to maintain up-to-date, plan-specific NQTL analyses. The proposed amendments to ERISA are something that could get tucked into such an appropriations measure, or they could get tacked onto another piece of moving legislation. We’ll certainly be on the lookout for any future developments, and you can be sure that we will keep our friends informed the next time there is a development in this story!