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Mental Health Parity – Why Is Something So Important So Hard?  Part Two of a Two-Part Series!

September 10, 2020

How are you doing this week, friends? Cry at all? Yell at anyone whose crime was being a bit annoying? Wake up in the night and get sucked into watching an all-news channel for hours instead of calmly counting sheep? If you've answered no to these questions, you are doing much better on the mental health front than we are.

Which brings us back to the question we posed last week in the first part of this two-part series. Why, when we all need access to mental health and substance abuse services more than ever, is it so hard for employers to understand the relevant laws and make sure that they offer compliant coverage meets their workforce's needs?

Last week we reviewed what laws and rules are involved, and which kind of people and employers had to comply with what.  This week, we're focused on what's needed to meet the Mental Health Parity and Addiction Equity Act (MHPAEA) standards. As we noted in the first part of this series, any fully-insured group plan needs to be aware of their state's MH/SUD requirements too, but every one of those is MH/SUD is different.  So, for this blog post, we are going to stick with just the federal MHPAEA, which in one way or another, touches almost every group health insurance plan.

To meet the terms of MHPAEA, the employer group and any health insurance carrier involved need to ensure their plan’s financial requirements and coverage scope and limitations for MH/SUD benefits are no more restrictive than the requirements related to substantially all medical/surgical services. Easy-peasy, right? Turns out, not so much, so we’ve broken it all down for you.

Coverage Scope

The MHPAEA outlines six benefit coverage categories.  They are:

  1. Inpatient, In-Network
  2. Inpatient, Out-of-Network
  3. Outpatient, In-Network
  4. Outpatient, Out-of-Network
  5. Emergency Care 
  6. Prescription Drugs

Groups of 50 or more employees are not required to offer MH/SUD benefits.  But if a plan provides any MH/SUD benefits, it must cover MH/SUD services in each category where it provides medical or surgical benefits.

How does this work in practice?  Say a plan includes antidepressants on its prescription drug formulary. Then that plan can't refuse to cover an emergency room visit for suicidal ideation.  If the plan covers emergency care for suicidal ideation and provides inpatient in-network coverage cardiac care, then the plan must cover inpatient in-network hospital stays for depression.  As you can probably tell, providing coverage for MH/SUD is pretty much an all or nothing proposition. 

Coverage Limitations – Financial and Otherwise

Compounding that, a plan needs to ensure that it does not put more restrictions on MH/SUD benefits than other covered services. There are two types of conditions that plans have to look out for—quantitative treatment limits and non-quantitative treatment limits. In MHPAEA compliance circles (yes, that is a thing), we call them QTLs and NQTLs.

Quantitative Treatment Limits (QTLs)

QTLs are numbers-based. They include the health plan's financial requirements (aka copays or deductibles, etc.) and treatment limits that can be counted (aka visit limits or durational limits, etc.).  The first step in determining if a plan meets the MHPAEA standards is to identify all QTLs. If any apply just to MH/SUD benefits and accumulate separately, that is a problem. For example, a plan can't have a separate deductible for these services.

If a QTL applies to "substantially all" of the plan's medical/surgical benefits (at least two-thirds), the plan can't put a more significant limit on a MH/SUD benefit.  Example: If 75 percent of the plan's medical benefits have an 80/20 coinsurance requirement after the deductible, there cannot be a 70/30 coinsurance rate for a MH/SUD service. Or, if the plan charges a $200 copay for an inpatient hospital admission for medical services, the copay for inpatient admission to a substance abuse treatment facility can't be $500. 

Non-quantitative Treatment Limits (NQTLs)

NQTLs are all of the treatment limitations that do not involve numbers and math. Think pre-authorization requirements, provider network limitations, formulary design, and medical necessity standards, to name a few. Plans can't apply NTQLs for MH/SUD differently or more stringently than the NQTLs applied to medical/surgical benefits in the same classification. For example, if a plan doesn't require a care plan before approving an inpatient hospital stay for a hip replacement, they can't require a care plan before an inpatient psychiatric stay.   

NQTL standards can be subjective and tough to measure. Also, not all NQTLs are appropriate for all types of covered services. So, what's a plan to do? First, review the benefit design and plan documents and see if there are any NQTLs that obviously need to be adjusted. For example, does step-therapy only apply to MH/SUDs?  If so, it's a problem. Second, look for NQTLs that may apply to all types of services, like pre-authorization. Then, review the standards the plan used to pick which benefits are subject to the NQTL, who picked them, why these benefits were selected, and the criteria used. When you are doing so, make sure that none of the NQTLs are arbitrary and that your plan is not applying them more stringently or using more challenging criteria relative to MH/SUDs. 

An example of this would be evaluating how the plan implements pre-authorization rules in practice.  Are substantially similar standards applied to all stays/procedures above a certain cost threshold?  Probably okay.  Is pre-authorization only required for more involved or longer MH/SUD services or visits?  Likely not okay.  And the space in between these all or nothing approaches is where MHPAEA compliance gets harder.  In many cases, it's a judgment call—but in all cases, the analysis needs to be guiding by an understanding of the underlying goal—creating parity between MH/SUD benefits and medical/surgical benefits.

Disclosure Requirements

The MHPAEA also contains a disclosure requirement. If a plan participant asks, the plan administrator and the health insurance carrier needs to disclose all treatment limitations that may impact MH/SUD benefits. They also have to identify all policies the plan uses to create and enforce those limits, as well as MH/SUD claims denial information within 30 days.  The Department of Labor has a model form for employees to use to request this information. While the disclosure form is intended for employees to help them request the "right" information, plan sponsors can also use it in reverse. Look at it as a checklist of information an employer will need to produce if a beneficiary asks for it.

MHPAEA Seems Like A Lot of Work. Who Is Responsible?

Our answer to this one should come as no surprise. It's always the employer plan sponsor. Every single time, group health compliance liability traces back to the employer eventually.

When a business offers fully-insured coverage, the carrier does share in the responsibility too. Carriers attempt to ensure that all fully-insured offerings comply with the MHPAEA and any applicable state laws. Plus, if they did not, the state insurance department should have detected it when they approved the policy terms, but mistakes happen.  Nevertheless, ultimately, the business that sponsors the group plan needs to check and make sure their coverage is compliant. All MH/SUD benefits and EHB compliance terms need to be part of the employer group's ERISA plan documents. Furthermore, if the Department of Labor comes calling, or an unhappy beneficiary sues the group plan over a MH/SUD coverage issue, you better believe the employer will be involved.

Compliance is more challenging for sponsors of self-funded group plans subject to the MHPAEA and its related rules. There is no health insurance carrier to help share the load. It is not enough for a self-funded group to rely on their third-party administrator (TPA) or a health plan that offers them administrative services only (ASO) either. Self-funded plan designs do not need to be directly approved by any regulator, so there is no authority to check them for MHPAEA adherence other than the employer group sponsor. Plus, at the end of the day, the business sponsoring the group plan (i.e., the employer) is the one with fiduciary and compliance responsibility concerning parity rules (along with) everything else that comes with offering group coverage to employees.  

My Head Is Spinning. Is There Any Help Available?

The answer is yes. There are some resources out there. The federal Department of Labor, which is in charge of MHPAEA enforcement for group health plans, has a self-compliance assessment tool for employer group plans. Honestly, though, it isn't straightforward, and we don't see too many (if any) HR professionals we know completing it. They also have a parity website, including links to all federal guidance, FAQs, and the model disclosure form.  The Centers for Medicare and Medicaid Services (CMS) also makes some helpful information available

Some states, like Pennsylvania and California, have resources online for health insurance issuers to use. Insurance department consumer hotlines also are available for any groups with fully-insured coverage that might have questions about their particular plan. The National Association of Insurance Commissioners is also building a parity tool for issuers and employers, but it’s still a work in progress.

So, as usual, it comes back to this.  Administering a group health insurance plan is not easy.  Mental health and substance abuse issues are also tough stuff.  Putting it all together in a legal and compliant way is trickier, even though it's not fun or fair for anyone involved.   

If you are dealing with any of these issues, friends, we feel you. As always, if you need it, know that we are also reaching out our hands to help. Feel free to come to us with your most challenging parity compliance issues, your craziest client stories, or even a personal need for MH/SUD support. We will always greet you with compassionate and listening ears and hearts and minds that want to help!