The Results Are In: Everyone Needs To “Phone A Friend” For Mental Health Parity Compliance Help

Hey friends!  We hope the dregs of winter are treating you well!  Personally, we are a bit tired of the “wintery mix” of precipitation plaguing the Northeast and are eagerly awaiting the moment when our yards start sprouting crocuses instead of slush.  Bitter cold days do lend themselves to curling up to read though, and because we are your nerdy friends, it should come as no surprise that one of our most anticipated reads in recent weeks was the 2022 MHPAEA Report to Congress.

Now, the two of us are obsessed with mental health parity compliance – we’ve spent the better part of the past year helping employers, brokers, third-party administrators, and health insurance issuers navigate the process.  However, for those of you who do not fall asleep thinking about the best ways to test operational stringency, here’s a little refresher.

The Consolidated Appropriations Act of 2021 (CAA) amended the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to provide new protections for health plan participants.  The law includes MHPAEA compliance responsibilities for group health sponsors and individual and group health insurers offering both medical/surgical (M/S) and mental health/substance use disorder (MH/SUD) coverage.  As of February 10, 2021, all plans must perform, document, and maintain comparative analyses of the design and application of all of their non-quantitative treatment limitations (NQTLs) that apply to M/S and/or MH/SUD conditions and services.  The report must examine all NQTLs both as written in plan documents and in operation based on current data.  

Translation – every group plan sponsor is supposed to create a report documenting their MHPAEA compliance.  Jen likes to call this a Congressionally-mandated book report – and, in many ways, this documentation requirement is unique because it’s about evaluating how a plan is complying with preexisting law that technically hasn’t changed.  

Employer groups especially need to analyze all the non-numerical limitations their plan may put on access to care and services.  Think prior authorization requirements, network composition, the types of drugs included on the formulary, specific requirements for different types of facilities, how the plan credentials providers, and more.  The report needs to include information from the plan’s current ERISA documents and vendor policies.  Plus, it needs to have current operational data showing how written procedures play out in real life.  The deadline for a plan to prepare its first report was LAST February 10th, not this week’s February 10th!

If a group ignores this requirement, not only can they be fined heavily and subject to litigation from plan participants, they also risk being called out by name in an annual report to Congress. The federal Departments of Health and Human Services, Labor, and Treasury issued their first report to Congress on January 27, 2022, detailing group health plan compliance with the mental health parity law.  The good news is that this year, they did not call any employer by name for non-compliance, but only because they are still in the process of working with groups about corrective action.  Should any of the more than 200 reviews they have in process result in a final determination of non-compliance, it will be included in next year’s report to Congress.  

The report makes it clear that all the employers and health insurance issuers subject to audits during the past year have a lot to work on when it comes to MHPAEA compliance.  But, the other good news is that the report also tells us what not to do, both when designing and applying NQTLs to a plan and when preparing NQTL comparative analyses.  Here’s what the report taught us:

• Every group health plan sponsor needs to have a comparative analysis of how their plan develops and applies non-quantitative treatment limitations.  The report needs to document if, in doing so, they maintain parity between M/S and MH/SUD treatment and services.  Having a current report is NOT OPTIONAL and it is not something that can just be prepared in a jiffy when federal regulators come knocking.
• NQTL analyses are NOT a one-time proposition.  The report needs to be kept up to date using recent operational data and covering all the plan’s current plan designs, vendors, and written policies.
• Almost all group health plans out there (certainly all the ones we’ve seen) have been handling parity compliance at least a little bit incorrectly.  
• The Departments of Labor, Health and Human Services, and Treasury are not really interested in anyone’s excuses for handling parity wrong at this point.  The MHPAEA has been on the books since 2008.  The Departments feel 14 years should be enough time for anyone to develop a compliance strategy.  If a group plan hasn’t done so already, then they are at risk.
• The biggest problem many plans have with compliance is they did not intentionally consider their NQTLs when developing them, and therefore cannot effectively identify the factors and/or evidence used to justify their creation.  
• There is not much a group or health insurer can do if they did not craft their NQTLs purposefully from the start – you can’t turn back time.  However, groups and health insurance issuers can move forward by evaluating existing NQTLs and developing clear measures and evidence to justify their use and govern how they will be applied moving forward.  Plans also need to be careful to consider all new NQTLs they may add to a plan’s design and make sure to determine applicability to both M/S and MH/SUD benefits using clear factors and evidentiary standards.  
• Other things that many plans are doing wrong include making conclusions about compliance without specific supporting evidence or detailed explanation, not providing meaningful comparisons or meaningful analysis, and providing documents from a vendor or an issuer that are not specifically prepared for the plan.  
• Some plans have failed to comply at all, and others are not following the law and related regulatory guidance’s most basic requirements.  Such common failures include not identifying the MHPAEA benefit classifications and/or the specific M/S and MH/SUD benefits affected by the NQTL, failing to identify and/or define factors, and not demonstrating compliance of an NQTL as applied.
• While NQTL audits have been on hold for the last few months as federal regulators work to finalize existing examinations, they are going to start back up again soon.
• The Departments will be issuing regulations in the coming year to help achieve greater MHPAEA compliance.
• The Departments are also asking Congress to amend ERISA and the MHPAEA to give them more meaningful enforcement authority, to increase consumer access to MH/SUD benefits, and to make MHPAEA compliance standards clearer and easier to meet.  While we think it’s highly unlikely that the current Congress will heed these requests, we did think it was notable that the Biden Administration is expressly asking for the statutory authority to directly pursue parity violations by entities that provide administrative services to ERISA group health plans, including health insurance issuers when they are providing administrative services to self-funded plans.  They are also asking Congress to amend ERISA to clearly allow plan participants and beneficiaries (or the DOL on their behalf) to recover amounts lost by claims denials that were in violation of the MHPAEA. To make MH/SUD services more accessible, the Administration is requesting that Congress permanently expand access to telehealth and remote care services, and, to make compliance easier, the Departments would like to see MH/SUD benefits defined in an objective and uniform manner based on nationally recognized standards. 

The final thing we learned when reading this report, we also consider to be good news.  It is that the processes MZQ Consulting are engaging in to prepare NQTL reports are right on target. Believe us, friends, we know how much information we’ve been asking for, and how hard it can be to compile the needed data to complete them — but, the Departments mean business here, and we do too.

So, while we cannot control if a plan was not operating in compliance before they come to us for an analysis, we can control what we put into our product.  What MZQ prepares is a comprehensive report that identifies and defines all NQTLs imposed by the plan, including defining all applicable plan terms and outlining how the NQTL applies to all benefits and MHPAEA benefit classifications.  Our analyses outline all factors used to develop and apply each NQTL and defines each one of them.  We also outline all evidence used to support each factor, including noting the qualifications of all decision-makers.  Each report includes meaningful plan-specific stringency tests of all NQTLs both as written and in operation.  MZQ makes clear conclusions about the compliance status of each NQTL as applied, and we provide an overall conclusion comprised of both specific findings and recommendations for plan improvement and remediation if need be.

So, friends, if you need any help with NQTL comparative analyses for either your own plan or for a client’s plan, just reach out.  We are happy to help both groups under active DOL or HHS audit and groups that simply need to prepare their analyses for plan participants and overall compliance purposes.