Friends, lately we’re fixated on mental health parity. Specifically the part of the Consolidated Appropriations Act of 2021 that addresses assessing how employer plan sponsors and health insurance carriers are keeping up with the non-quantitative treatment limitation requirements outlined in the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). We just keep thinking about how extensive the new compliance requirements are, how difficult it will be for self-funded group health plans in particular to meet them, how high a priority this is for the Biden administration, and what we can do to help.
If you aren’t sure what we are even talking about, here’s a little background. The goal of the MHPAEA is to make sure that health plans cover mental health and substance use disorders (MH/SUD) fairly. This includes parity for non-quantitative treatment limitations (NQTLs)—think medical management and utilization review, etc. As we’ve discussed before, that’s a pretty complicated endeavor.
The recently passed COVID-19 stimulus law (aka the CAA) makes it even trickier. It says that as of February 10, 2021, all applicable plans need to have a detailed analysis on-hand to show how they meet NQTL requirements. Not only that, they must be prepared to make this and other parity compliance information available to the federal Departments of Health and Human Services (HHS) and Labor (DOL) upon request.
The new requirement applies to all group health plan sponsors subject to MHPAEA rules (aka practically every employer out there offering group health plan coverage, except some small groups of less than 50 employees who offer level or self-funded coverage). Each group’s written MHPAEA NQTL report needs to include, for each plan option offered:
Since analyzing NQTLs is so difficult, many entities subject to the MHPAEA glossed over ensuring NQTL parity in the past, with honestly very few consequences. So we know what all of our rebellious friends are thinking right about now—this new requirement sounds like it’s a nightmare to document, and what are the chances that anyone is going to ask for an NQTL parity report anyway? The thing is, friends, the odds are a lot higher than they’ve ever been before.
We recently were involved in a conversation with Department of Labor officials. They made it exceedingly clear that MHPAEA compliance and the new NQTL analyses are at the top of their 2021 enforcement list. Some of the phrases they tossed out included “be ready,” “this obligation isn’t new,” and “it’s past time to get to work on this.” The officials explained their expectation is that each employer plan sponsor will be able to produce an organized and thorough report with evidence and a soundly reasoned conclusion. They do not want a general compliance statement and a bunch of attached documents to sift through.
Another thing the DOL officials mentioned was that they “try to do things in a way that maximizes the positive impact.” When it comes to parity enforcement, the DOL already likes to practice “global correction”. So, if they find one group health plan that is out of compliance, the DOL will approach the group’s service providers (such as their third-party administrator, care management provider, or the managed behavioral health organization) to find all of the other non-compliant plans within the vendor’s clientele. We got every indication from our conversation that the DOL will be using the “economies of scale strategy” when it comes to NQTL analysis enforcement too.
Now, some of our risk-averse friends are probably hyperventilating about now, but we know others are still wondering what’s the worst thing that will happen if they stick their fingers in their ears and sing “can’t hear you!” at us annoying compliance types. Unfortunately, quite a few undesirable things could befall employers who ignore this requirement. If federal regulators think your plan is out of compliance, they will attempt to right the ship. However, getting to that point can involve making the employer plan do things like review previously denied claims, allow enrollees to file retroactive claims, and make appropriate repayments if necessary. Also, there can be financial penalties as high as $100 per participant per day of noncompliance. Besides all of that, the new law stipulates that if a plan does not come into compliance after an initial warning, then they must notify all plan participants of their non-compliant status. The DOL and HHS also have to send an annual report to Congress detailing all of their enforcement efforts.
The CAA requires the DOL and HHS to prepare rules and sub-regulatory guidance to help implement increased parity compliance requirements within the next 18 months. These rules and related guidance must include updated resources for employers and insurers, such as examples and methodologies for them to use to guide their analyses. But employers that self-fund their coverage, and the third-party administrators and other vendors that help offer their employees health benefits, can’t afford to wait 18 months before acting. If that sounds like a nightmare to you, don’t worry—MZQ can help. After all, that’s what we do!
We’re currently accepting new MHPAEA NQTL audit clients. We will work with agencies, TPAs, care management entities, and employers directly to prepare NQTL audit reports. Our analyses will follow the framework outlined in the CAA and indicate if a plan is, or is not, in compliance with MHPAEA NQTL requirements. If a plan needs to complete some action steps to meet NQTL parity standards, we’ll include detailed recommendations to enhance compliance too. Reach out right away if you think you or your employer group clients could use some friendly help in this area!