Finally! Final Rule for the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA)
November 19, 2013
It has been a long time in coming, but the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) final rule (the "Rule") has just been issued. Some of the changes from the 2010 interim rule are significant.
The Rule will apply to group health plans and health insurance issuers for plan years beginning on or after July 14, 2014. MHPAEA currently only applies to employer-funded plans with more than 50 insured employees; enrollees in the Federal Employees Health Benefit Program; managed Medicaid; and Children’s Health Insurance Program. But after January 1, 2014, the Rule will also reach employers with less than 51 employees, the individual market and Medicaid alternative plans (Temporary exemptions may be granted for group health plans that can demonstrate that compliance would result in an increase of the total cost of coverage of 2% for the first plan year or 1% for each subsequent plan year).
It’s important to note that MHPAEA doesn’t require plans to include benefits for behavioral heath, but if they do they must be in parity with those for medical/surgical treatment. Coverage must be provided for mental health or substance use disorder benefits in every classification in which medical/surgical benefits are available.
Three Types of Disparity Addressed by Rule
MHPAEA addresses three types of possible disparity between benefits for medical/surgical treatment and behavioral health: (1) financial; (2) quantitative treatment limitations (QTLs); and (3) Non-quantitative treatment limitations (NQTLs).
Financial limits are usually fairly obvious—different copays or deductibles that result in higher out of pocket costs for behavioral care.
QTLs are restrictions on the frequency or number of treatment sessions, waiting periods for treatment, or limits on the number of bed days.
NQTLs are often more subtle and may require careful analysis to demonstrate differential treatment of behavioral health. These standards aren’t always obvious because they aren’t expressed as a numerical limit. They include standards relating to:
- medical necessity
- drug formulary design
- network tier design
- standards for provider admission to the network
- methods for determining usual, customary, and reasonable (UCR) charges for out-of-network (OON) providers
- case management protocols that require failure at a lower level of treatment before a higher level of treatment is approved
- exclusions from future services based on prior failure to complete treatment; and
- restrictions based on geographic location, facility type, provider specialty, or other criteria that limit benefits.
In order to determine whether behavioral health receives parity with medical/surgical benefits, benefits are classified into four categories. These categories are inpatient (both in-network and OON) and outpatient (both in-network and OON). Parity is required with respect to each combination of medical/surgical benefits and of mental health/substance abuse benefits that any participant (or beneficiary) can simultaneously receive.
On the financial side of benefits design, MHPAEA prohibits the imposition of higher out-of-pocket costs on mental health/substance abuse coverage such as co-pays, coinsurance, and deductibles. Cumulative financial requirements or quantitative treatment limitations in any classification may not accumulate separately for behavioral health and for medical/surgical benefits. For example, a plan may not impose an annual $250 deductible on medical/surgical benefits and a separate annual $250 deductible on all mental health/substance abuse disorder benefits.
The Rule contains a number of formulae and grids that demonstrate how parity will be assessed across the four classifications and any subcategories a plan may create. Multiple provider tiers and tiered prescription benefits are permitted, provided the tiers apply without regard to whether the treatment is behavioral or medical/surgical. The Rule clarifies that parity also applies to plan network standards, such as geographic distance, limits on the type of facilities or providers admitted to the network, and network adequacy.
Responding to input from plans and providers, the Rule now allows a sub-classification of outpatient services for office visits that distinguishes them from more costly and infrequent services such as ambulatory surgery.
Exception to NQTL Rules is Eliminated
One significant change from the interim rule is the elimination of an exception to the NQTL requirements for variations between medical/surgical and behavioral benefits. The exception was formerly applied in situations where there were "clinically appropriate standards of care" for the treatment. The exception was eliminated because it was "confusing, unnecessary, and subject to potential abuse." Further, "The underlying requirements regarding nonquantitative treatment limitations (even without this exception) are sufficiently flexible to allow plans and issuers to take into account clinical and other appropriate standards when applying nonquantitative treatment limitations." We’ll see how this plays out, but NQTLs seems likely to be the area of greatest struggle between plans and aggrieved participants claiming they received disparate treatment. You can anticipate further "clarifying" rules and litigation to determine just how the NQTL rules should be applied.
Some of the examples on NQTLs are instructive as to probable future battlegrounds.
In Example 1, a plan requires prior authorization for all inpatient treatment. However, in practice, case managers are instructed to routinely approve medical/surgical admissions for seven days but only one day for behavioral health, after which a treatment plan must be submitted by the patient’s attending provider and approved by the plan. This would be a non-compliant use of a NQTL.
Example 11 addresses a variation on the same NQTL: prior authorization to determine medical appropriateness. The plan requires pre-authorization for all behavioral health outpatient visits after nine visits and will only approve up to five additional visits per authorization. For outpatient medical/surgical benefits, the plan allows an initial visit without prior authorization and then authorizes use of the benefit based on the individual treatment plan recommended by the attending provider based on the medical condition, with no cap on the number of visits that can be approved. The parity requirement is violated by this NQTL.
While most plans already publish their criteria for determining medical necessity and their explanations of benefits give some reason for denial of payment (such as "not medically necessary"), the Rule calls for a higher level of transparency and detail than is commonly provided. In Example 4, support is given for using evidentiary standards for determining whether treatment is medically appropriate. These might include the number of days or visits, even if this results in dissimilar days, visit or benefits utilized for mental health conditions or substance use disorders as it does for any particular medical/surgical condition. However, to be valid, the standards must be "based on recommendations made by panels of experts with appropriate training and experience in the fields of medicine involved. The evidentiary standards are applied in a manner that is based on clinically appropriate standards of care for a condition" (Litigators, start your engines!).
Example 8 suggests that those who write case management protocols and medical necessity standards are going to need to adhere to a much higher standard of documentation and evidence-based decision-making. Example 8 approves a plan’s requirements for prior authorization for some (but not all) mental health/substance abuse benefits, as well as for some medical/surgical benefits, but not for others because the plan has considered "a wide array of factors in designing medical management techniques for both mental health and substance use disorder benefits and medical/surgical benefits, such as cost of treatment; high cost growth; variability in cost and quality; elasticity of demand; provider discretion in determining diagnosis, or type or length of treatment; clinical efficacy of any proposed treatment or service; licensing and accreditation of providers; and claim types with a high percentage of fraud." Significantly, "[t]he evidence considered in developing its medical management techniques includes consideration of a wide array of recognized medical literature and professional standards and protocols (including comparative effectiveness studies and clinical trials). This evidence and how it was used to develop these medical management techniques is also well documented by the plan." (italics supplied).
Transparency is front and center in the Rule. Claimants who receive an adverse determination must be provided copies of all relevant documents—free of charge—including, (i) information on medical necessity criteria for both medical/surgical and mental health/substance abuse benefits, and (ii) the processes and evidentiary standards used to apply a NQTL to behavioral health benefits.
Another example clarifies that no level of treatment can be selectively excluded for some diagnoses. A plan would be non-compliant, for example, if it excluded non-hospital residential treatment for substance abuse but allowed it for mental health treatment. Another prohibited practice would be to exclude out of network treatment merely because it is in another state. Non-geographic access barriers are also addressed, such as requiring exhaustion of EAP services before use of behavioral health benefits; this would be non-compliant, since, obviously, there is no such requirement for medical/surgical conditions.
If you would like further information about the Rule, please contact your regular Murtha Cullina attorney or Elizabeth Neuwirth at firstname.lastname@example.org; Kennedy Hudner at email@example.com; Paul E. Knag at firstname.lastname@example.org; Stephanie Sprague Sobkowiak at email@example.com; Heather O. Berchem at firstname.lastname@example.org; or Maria Pepe VanDerLaan at email@example.com.