Why You May Want to Have a Third Party, and Not Your TPA, “Grade Your Paper”
The Mental Health Parity and Addiction Equity Act (MHPAEA) is a federal law generally requiring plans to have parity in coverage for mental health and substance use disorder treatment (“MH/SUD”) compared to medical and surgical coverage. It was enacted in 2008, amended by the Affordable Care Act (ACA) in 2010, and given “teeth” in the Consolidated Appropriations Act of 2021 (CAA).
The MHPAEA does not require plans to cover MH/SUD benefits, but if they do, MHPAEA likely applies.
A brief overview of “parity.”
As background and very generally, under the MHPAEA, quantitative treatment limitations (QTLs) and non-quantitative treatment limitations (NQTLs) applied to MH/SUD benefits must be comparable in cost, restrictions, and administrative processes to those applied to the medical/surgical benefits.
Quantitative Treatment Limitations and Parity.
QTLs are the financial requirements, such as deductibles, copayments, coinsurance and out-of-pocket limits, and treatment limitations, such as frequency of treatment, number of visits, days of coverage or other similar limits on the scope or duration of coverage. The QTLs applicable to MH/SUD benefits cannot be more restrictive than the predominant requirements or limitations applied to substantially all medical and surgical benefits.
The parity analysis must be applied for each QTL within a coverage tier (e.g., employee, employee plus spouse, etc.) for each of the six classifications of benefits separately. The six classifications of benefits are:
Inpatient in-network | Outpatient out-of-network |
Inpatient out-of-network | Emergency care |
Outpatient in-network | Prescription drugs |
If a type of financial requirement or quantitative treatment limitation applies to substantially all medical / surgical benefits in a classification (e.g., copays apply to substantially all medical and surgical benefits), then it may be permissible for that requirement or limitation (copays) to apply to MH/SUD benefits in the same classification. In some circumstances, plans can subdivide certain classifications to account for multiple network tiers, among other things.
Non-Quantitative Treatment Limitations and Parity.
NQTLs are non-numerical processes, strategies, evidentiary standards, or other criteria that limit the scope or duration of benefits for services provided under the plan. A non-exhaustive list includes: utilization reviews, prior authorizations, step therapies, provider reimbursements, medical management, network tier design, exclusions, and geographical / provider restrictions.
The CAA explicitly requires plans to have a “robust” analysis of NQTL processes, strategies, etc. Essentially, plans must “show their work” giving a robust discussion regarding non-numerical standards and whether the underlying processes, strategies, evidentiary standards, and other factors are comparable and applied no more stringently for MH/SUD benefits than for medical/surgical benefits.
In the 2022 MHPAEA Report to Congress, not a single plan reviewed by the DOL provided sufficient evidence or received a determination of parity.
Employers sponsoring self-insured plans, take note and notice the inherent tension.
Employers sponsoring self-insured plans are responsible, and liable, for MHPAEA compliance. In an effort to assist employers in checking the compliance box, third-party administrators (TPAs) either proactively or upon request are giving employers their plan’s analysis. Interestingly, every analysis from a TPA to an employer has concluded that the employer’s plan passes NQTL analysis. Contrastingly, every analysis reported by the agencies in the 2022 report to Congress said that insufficient support and documentation was given to the agencies to make a determination, and, moreover, corrective actions were sought in many plans that were reviewed.
What does this mean? Well, it’s reasonable to conclude that an unbiased third party might serve as an appropriate arbiter for compliance. True, the cost for such analysis will be more than “free.” However, the results could add value to the plan and those participating in it while simultaneously mitigating the risk of exposure to litigation, agency involvement, or bad press.
Common areas of noncompliance requiring corrective action.
The current areas of agency focus seem to be restrictions or disparities in autism and ABA therapies, provider reimbursements, nutritional counseling, and residential treatment centers.
In April, the DOL released a blog highlighting its findings and what it’s accomplished in the area of Autism:
EBSA’s Los Angeles Regional Office investigated a large service provider that excluded coverage for ABA therapy in hundreds of self-insured plans. EBSA’s investigation resulted in 3 plans removing exclusion for ABA therapy and offering coverage for that benefit moving forward, affecting more than 18,000 participants and their beneficiaries.
An investigation by EBSA's Chicago and Dallas Regional Offices into an ABA therapy exclusion resulted in a large claims administrator adding ABA therapy as a default coverage option for all of its self-insured plans. This correction resulted in the elimination of the exclusion for ABA therapy for autism for nearly one million participants.
After a Seattle family encountered difficulty communicating with their health plan regarding claims for their child, an EBSA Benefits Advisor stepped in to assist. The plan reprocessed the claims, resulting in an additional $20,000 of coverage.
Another parent contacted an EBSA Benefits Advisor in the Dallas Regional Office for assistance with claims that had not been paid. After the Advisor contacted the plan to resolve the issue, this family received approximately $24,000 they were owed.
If you are interested in learning more about MHPAEA analysis, reach out to me here.
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