Health Law Section Seminar: DOL Enforcement Program for the Mental Health Parity and Addiction Equity Act

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1 Health Law Section Seminar: DOL Enforcement Program for the Mental Health Parity and Addiction Equity Act Professor Colleen E. Medill, University of Nebraska College of Law Wednesday, October 17, 2018 Embassy Suites Hotel La Vista Conference Center

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3 9/28/2018 DOL Enforcement Program for the Mental Health Parity and Addiction Equity Act Colleen E. Medill Robert and Joanne Berkshire Family Professor of Law, University of Nebraska Of Counsel, Koley Jessen 1 Background In 2017, the Employee Benefit Security Administration (EBSA) investigated 187 health care plans for compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA). Ninety two plans were cited for violations. Almost half (48.91%) of the cited violations involved so called nonquantitative treatment limitations on mental health and substance abuse benefits (NQTLs). 2 1

4 9/28/2018 Nonquantitative Treatment Limitations - Requirements The MHPAEA prohibits group health plans from imposing more stringent treatment requirements and limitations on mental health and substance abuse benefits than those placed on medical and surgical plan benefits. This prohibition includes both quantitative (e.g., number of visits per year) and nonquantitative limitations. 3 Nonquantitative Treatment Limitations Areas of DOL Concern Standards for Experimental Exclusions Dosage Limits and Drug Formularies Step Therapy Protocols Provider Reimbursement Rates Network Adequacy Eligibility for Residential Treatment Facilities See Proposed FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21 st Century Cures Act at 4 2

5 9/28/2018 Nonquantitative Treatment Limitations - Examples Q3: My health plan generally excludes treatment that is experimental or investigative for both medical/surgical benefits and for MH/SUDservices. The plan defines experimental or investigative treatments as those with a rating below B in the Hayes Medical Technology Directory. However, the plan reviews and covers certain treatments for medical/surgical conditions that have a rating of C on a treatment by treatment basis, while denying all benefits for MH/SUD treatment that have a rating of C or below, without reviewing the treatments to determine whether exceptions are appropriate. Is this permissible under MHPAEA? ANSWER: NO 5 Nonquantitative Treatment Limitations - Examples Q2. With respect to both medical/surgical benefits and MH/SUD services, the plan s documents state that the plan denies a treatment as experimental for a given condition when no professionally recognized treatment guidelines define clinically appropriate standards of care for the condition, and fewer than two randomized controlled trials are available to support the treatment s use with respect to the condition. The plan defines Autism Spectrum Disorder as a mental health condition. More than one professionally recognized treatment guideline and more than two controlled randomized trials support the use of Applied Behavioral Analysis (ABA) therapy to treat certain children with Autism Spectrum Disorder. For the most recent plan year, the plan denied all claims for ABA therapy to treat children with Autism Spectrum Disorder under the rationale that the treatment is experimental or investigative. With respect to medical/surgical conditions, the plan approved treatment when supported by one or more professionally recognized treatment guidelines and two or more controlled randomized trials. Is this permissible? ANSWER: NO 6 3

6 9/28/2018 Nonquantitative Treatment Limitations - Examples Q4: My health plan documents state that the plan follows professionally recognized treatment guidelines when setting dosage limits for prescription medications, but the dosage limit set by my plan for buprenorphine to treat opioid use disorder is less than what professionally recognized treatment guidelines generally recommend. The dosage limits set by my plan with respect to medical/surgical benefits are not less than the limits such treatment guidelines recommend. Is this permissible under MHPAEA? ANSWER: NO 7 Nonquantitative Treatment Limitations - Examples Q6: My health plan requires step therapy for both medical/surgical and MH/SUD in patient, in network benefits. The plan requires a participant to have two unsuccessful attempts at outpatient treatment in the past 12 months to be eligible for certain inpatient in network SUD benefits. However, the plan only requires one unsuccessful attempt at outpatient treatment in the past 12 months to be eligible for inpatient, in network medical/surgical benefits. Is this permissible under MHPAEA? ANSWER:???? 8 4

7 9/28/2018 Nonquantitative Treatment Limitations - Examples ANSWER (a direct quote from the FAQ): Probably not. Refusing to pay for a highercost therapy until it is shown that a lower cost therapy is not effective (commonly known as step therapy protocols or fail first policies ) is an NQTL. [R]egulations require that the processes, strategies, evidentiary standards, or other factors used in applying an NQTL to MH/SUD benefits must be comparable to and applied no more stringently than the processes, strategies, evidentiary standards, or other factors used in applying the NQTL to treat medical/surgical conditions. Unless the plan can demonstrate that evidentiary standards or other factors were utilized comparably to develop and apply the differing step therapy requirements for these MH/SUD and medical/surgical benefits, this NQTL does not comply with MHPAEA. 9 Nonquantitative Treatment Limitations Claim Denials Participants upon making an ERISA Section 104(b)(4) request for additional information regarding benefits and claims denials are entitled to more information than what may be provided in an explanation of benefits. EBSA has created a model form on its web site for participants to use when requesting information regarding mental health/substance abuse disorder benefits and claims denials. 10 5

8 9/28/2018 EBSA Model Form Language Because my health coverage is subject to the parity protections, treatment limits cannot be applied to mental health and substance use disorder benefits unless those limits are comparable to limits applied to medical and surgical benefits. Therefore, for the limitations or terms of the benefit plan specified above, within thirty (30) calendar days of the date appearing on this request, I request that the plan: 1. Provide the specific plan language regarding the limitation and identify all of the medical/surgical and mental health and substance use disorder benefits to which it applies in the relevant benefit classification; 2. Identify the factors used in the development of the limitation (examples of factors include, but are not limited to, excessive utilization, recent medical cost escalation, high variability in cost for each episode of care, and safety and effectiveness of treatment); 11 EBSA Model Form Language (cont.) 3. Identify the evidentiary standards used to evaluate the factors. Examples include, but are not limited to, the following: Excessive utilization as defined by two standard deviations above average utilization per episode of care; Recent medical cost escalation as defined by medical costs for certain Services increasing 10% or more per year for 2 years; High variability in cost per episode of care as defined by episodes of outpatient care being 2 standard deviations higher in total costs than the average cost per episode 20% or more of the time in a 12 month period; and Safety and efficacy of treatment modality as defined by 2 random clinical trials required to establish a treatment is not experimental or investigational; 12 6

9 9/28/2018 EBSA Model Form Language (cont.) 4. Identify the methods and analysis used in the development of the limitation; and 5. Provide any evidence and documentation to establish that the limitation is applied no more stringently, as written and in operation, to mental health and substance use disorder benefits than to medical and surgical benefits. 13 EBSA Benefits Advisors and Red Flags Triggering DOL Investigations From the Main EBSA Web Page: Ask EBSA Request assistance from a benefits advisor we have a staff of trained advisors ready to help. 14 7

10 9/28/2018 Beware the Phone Call! The plan administrator will receive an initial phone call (not a letter) from an EBSA Benefits Advisor. Plan administrators would be well advised to refer the caller to legal counsel. 15 EBSA Benefits Advisors and Red Flags Triggering DOL Investigations From the EBSA Factsheet on FY 2017 MHPAEA Enforcement: If the inquiry suggests the problem may affect multiple participants and the Benefits Advisor is unable to obtain voluntary compliance, the Benefits Advisor will refer the issue for investigation. 16 8

11 EMPLOYEE BENEFITS SECURITY ADMINISTRATION UNITED STATES DEPARTMENT OF LABOR FACTSHEET dol.gov/agencies/ebsa FY 2017 MHPAEA ENFORCEMENT ENFORCEMENT OVERVIEW: ENSURING PARITY The Employee Benefits Security Administration (EBSA) enforces Title 1 of the Employee Retirement Income Security Act of 1974 (ERISA), on 2.2 million private employment-based group health plans, which cover million participants and beneficiaries. EBSA relies on its 400 Investigators to review plans for compliance with ERISA, including the Mental Health Parity and Addiction Equity Act (MHPAEA). EBSA also employs 110 Benefits Advisors who provide participant education and compliance assistance regarding MHPAEA. Benefits Advisors also pursue voluntary compliance from plans on behalf of participants and beneficiaries. In January 2016, EBSA released its first annual MHPAEA enforcement fact sheet, summarizing its enforcement activity in fiscal year (FY) This FY 2017 enforcement fact sheet summarizes EBSA s activity over the last fiscal year. FY 2017 Enforcement Fast Facts: EBSA closed 347 health investigations in FY 2017 (and 3,286 health investigations since FY 2011). Of these 347 closed investigations in FY 2017, 187 involved plans subject to MHPAEA and were, therefore, reviewed for MHPAEA compliance. Of these 187 investigations where MHPAEA applied, EBSA cited 92 violations for MHPAEA noncompliance. EBSA Benefits Advisors answered over 127 public inquiries in FY 2017 related to MHPAEA (and have answered 1,318 inquiries related to MHPAEA since FY 2011). FY2017 MHPAEA Violations 8.70% Annual and lifetime dollar limits 48.91% 28.26% Financial limits and QTLs Benefits in all classifications 8.70% 5.43% Cumulative financial requirements/ treatment limitations NQTLs 1 See EBSA s FY 2015 and 2016 enforcement fact sheets, available at and

12 FACTSHEET: FY 2017 MHPAEA ENFORCEMENT THE EBSA MHPAEA ENFORCEMENT PROCESS Assisting Participants EBSA receives inquiries from participants who believe their mental health or substance use disorder benefits were denied improperly. Benefits Advisors work with participants and their plans to help the participant receive the benefits to which they are entitled. If the inquiry suggests the problem may affect multiple participants and the Benefits Advisor is unable to obtain voluntary compliance, the Benefits Advisor will refer the issue for investigation. Investigating Plans EBSA conducts MHPAEA compliance reviews, including for compliance with the requirements for quantitative and nonquantitative treatment limitations in all benefit classifications where the plan offers medical/surgical health benefits, in all open cases where MHPAEA applies. Many times, these cases stem from participant complaints received by a Benefits Advisor where the facts suggest the problems are systemic and adversely impact other participants. Achieving global correction. An EBSA Investigator uncovered that a fully-insured plan required continuation of care review after a patient received eight outpatient sessions. As a result of the investigation, the issuer removed the continuation of care review requirement after eight outpatient sessions. Through the discussions between the issuer and EBSA, the issuer also agreed to remove this requirement from all of its products, which affected 22,000 additional plans. Benefits Advisors obtain results. An ERISA plan participant contacted an EBSA Benefits Advisor for help after the mental health claims for his dependent son were denied based on the grounds that the treatment was not medically necessary. The plan also initially refused to provide its criteria for medical necessity, claiming that it was proprietary. The Benefits Advisor contacted the plan administrator on the participant s behalf, explained how the MHPAEA requirements applied to the plan, and asked that the claims be reviewed. As a result, the plan voluntarily complied and paid $48,000 in claims for intensive outpatient therapy for the participant s dependent son. Generally, if violations are found by an EBSA Investigator, the Investigator requires the plan to remove any offending plan provisions and pay any improperly denied benefits. To achieve the greatest impact, Investigators will also seek a global correction, working with the plans service providers to find improperly denied claims and correct the problem for other plans as well. EBSA Investigators have worked with several large insurance companies to remove impermissible barriers to mental health benefits such as overly restrictive written treatment plan requirements and overly broad preauthorization requirements. These global changes have impacted hundreds of thousands of group health plans and millions of participants. Page 2 dol.gov/agencies/ebsa

13 FACTSHEET: FY 2017 MHPAEA ENFORCEMENT THIS YEAR IN REVIEW: EXAMPLES OF MHPAEA ENFORCEMENT ACTIONS Restrictions on Residential Treatment Removed. The Los Angeles Regional Office uncovered a plan that imposed an impermissible annual day limit on residential treatment for substance use disorders. As a result of this investigation, the plan issued a special notice to all participants notifying them of a 30- calendar day window for submission of claims affected by the previous limitation on their substance use disorder benefits. Four claims, with billed amounts totaling $74,165, were submitted, reprocessed and paid by the plan. The plan also revised its documents to remove the impermissible limitation for future plan years. More Restrictive Financial Requirements eliminated and participants reimbursed for excessive copayments. The New York Regional Office reviewed a plan that charged a higher specialist co-payment of $25 for all innetwork mental health and substance use disorder outpatient visits while only a $20 copay was charged for all primary care in-network medical/surgical outpatient visits. As a result of this investigation, the plan refunded the $5 difference from 2010 through the 2016 plan years. In total, $11,340 was reimbursed to over 200 participants. The plan has removed the impermissible financial requirement for future years. Additional Coverage for Mental Health and Substance Use Disorder Treatment. The Los Angeles Regional Office discovered that a plan failed to provide out-of-network coverage for inpatient and outpatient mental health and substance use disorder benefits. Based on the findings of the investigation, a settlement agreement was executed to achieve correction of multiple plan violations, including these MHPAEA violations. As a result of the investigation, 52 mental health and substance use disorder claims were reprocessed and the plan paid $24,152 in previously denied mental health and substance use disorder benefits. The plan also revised its documents to comply with parity requirements. Overly Stringent Precertification Requirements Eliminated. The Dallas Regional Office discovered that a self-funded plan required precertification for some outpatient medical/surgical services but required precertification for all outpatient psychiatric, chemical dependency, and substance use disorder therapies. EBSA made the plan aware of its responsibilities under MHPAEA. As a result, the plan agreed to remove the impermissible precertification requirement from its plan documents. Page 3 dol.gov/agencies/ebsa

14 FACTSHEET: FY 2017 MHPAEA ENFORCEMENT Denied Claims Repaid. A participant had custody and guardianship of his 14-year-old granddaughter, who has multiple mental health issues, including Post Traumatic Stress Disorder (PTSD). The plan precertified 12 counseling visits for the granddaughter's PTSD and also precertified an outpatient program through the local children s hospital. The plan subsequently denied both the counseling and outpatient hospital claims. The participant timely submitted an appeal, but the plan failed to respond. A Benefits Advisor from EBSA s Cincinnati Regional Office contacted the plan s service provider and the plan sponsor, explained the requirements of the law, and asked that the plan review the claims and the participant s numerous contacts with the service provider about these issues. The service provider determined that there were errors made in the claim administration process and paid approximately $1,700 in claims. Overly Stringent Benefit Requirements Eliminated. A fully-insured plan required participants to demonstrate, before he or she could receive in-patient treatment of a mental health condition, that his or her mental illness affected more than one area of daily living to such an extent that he or she was dysfunctional and required the participant to demonstrate that without such inpatient treatment, the participant s condition would deteriorate. There were no similar requirements for medical/surgical treatment. The plan removed these onerous requirements for mental health treatment as a result of the EBSA s enforcement efforts. Need Help with Your Mental Health or Substance Use Disorder Benefits? Visit the Mental Health and Addiction Insurance Help Consumer Portal and-addiction-insurancehelp/index.html Contact EBSA U.S. Department of Labor Telephone: Page 4 dol.gov/agencies/ebsa

15 OMB Control No Expiration Date: XX/2021 FORM TO REQUEST DOCUMENTATION FROM AN EMPLOYER-SPONSORED HEALTH PLAN OR AN INSURER CONCERNING TREATMENT LIMITATIONS Background: This is a tool to help you request information from your employer-sponsored health plan or your insurer regarding limitations that may affect your access to mental health or substance use disorder benefits. You can use this form to request general information about treatment limitations or specific information about limitations that may have resulted in denial of your benefits. An example of a request for general information might be a request for the plan s preauthorization policies for medical/surgical and mental health treatments. An example of a request for specific information related to a denial of benefits based on a failure to show medical necessity might be a request for the internal medical necessity guidelines used to deny your claim. Your plan or insurer is required by law to provide you this information in certain instances, and the information will help you determine if the coverage you are receiving complies with the law. Under a federal law called the Mental Health Parity and Addiction Equity Act (MHPAEA), many health plans and insurers must make sure that there is parity between mental health and substance use disorder benefits, and medical and surgical benefits. This generally means that treatment limits applied to mental health and substance use disorder benefits must be at least as generous as the treatment limits applied to medical and surgical benefits. In other words, treatment limits cannot be applied to mental health and substance use disorder benefits unless those limits are comparable to limits applied to medical and surgical benefits. The types of limits covered by parity protections include: Financial requirements such as deductibles, copayments, coinsurance, and out-ofpocket limits; Treatment limits such as limits on the number of days or visits covered, or other limits on the scope or duration of treatment (for example, being required to get prior authorization). If you, a family member, or someone you are helping obtains health coverage through a private employer health plan, federal law requires the plan to provide certain plan documents about your benefits, including coverage limitations on your benefits, at your request. For example, you may want to obtain documentation as to why your health plan is requiring pre-authorization for visits to a therapist before it will cover the visits. Generally, the plan must provide the documents you request within thirty (30) calendar days of the plan s receipt of your request. This form will help you request information from your plan about treatment limits. Many common types of treatment limits are listed on this form. If the type of treatment limit being imposed by your plan does not appear on the list, you may insert a description of the treatment limit you would like more information about under Other. Instructions: Complete the attached form to request general information from your plan or insurer about coverage limitations or specific information about why your mental health or i

16 substance use disorder benefits were denied. This information can help you appeal a claim denial but you must initiate the plan s general review and appeals process if you want to appeal with your plan or insurer the claim denial. You do not have to use this form to request information from your plan. Consult your summary plan description (SPD) or certificate of coverage to see how to request information from the plan. If you are helping someone with obtaining information about his/her health coverage, you are often required to submit an authorization along with this form signed by the person you are helping if you have not submitted one beforehand. If you have any questions about this form and you are enrolled in a private employer health plan, you may visit the Employee Benefits Security Administration s (EBSA s) website at for answers to common questions about your private employer health plan. You may also contact EBSA electronically at or call toll free You can also use this form if you are enrolled in coverage that is not through a private employer health plan, for example if you have individual health coverage or coverage sponsored by a public sector employer, like a city or state government. You may contact the Centers for Medicare & Medicaid Services (CMS) at phig@cms.hhs.gov or ext for questions about your individual health coverage or public sector health plan. PRA Disclosure Statement According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is The time required to complete this information collection is estimated to average 5 minutes per response, including the time to review instructions, search existing data resources, gather the data needed, and complete and review the information collection. If you have comments concerning the accuracy of the time estimate(s) or suggestions for improving this form, please write to: U.S. Department of Labor, Employee Benefits Security Administration, Office of Policy and Research, Attention: PRA Clearance Officer, 200 Constitution Avenue, N.W., Room N-5718, Washington, DC or ebsa.opr@dol.gov and reference the OMB Control Number ii

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18 Date: Mental Health and Substance Use Disorder Parity Disclosure Request To: [Insert name of the health plan or issuer] (If you are a provider or another representative who is authorized to request information for the individual enrolled in the plan, complete this section.) I am an authorized representative requesting information for the following individual enrolled in the plan: Attached to this request is an authorization signed by the enrollee. (Check the box to indicate whether your request is for general information or specific information related to your claim or denial for benefits.) General Information Request I am requesting information concerning the plan s limitations related to coverage for: Mental health and substance use disorder benefits, generally. The following specific treatment for my condition or disorder:. Claim/Denial Information Request I was notified on [Insert date of denial] that a claim for coverage of treatment for [Insert mental health condition or substance use disorder] was, or may be, denied or restricted for the following reason[s] shown immediately below: (Based on your understanding of the denial of, limitation on, or reduction in coverage, check all that apply) o I was advised that the treatment was not medically necessary. o I was advised that the treatment was experimental or investigational; o The plan requires authorization before it will cover the treatment; 1

19 o The plan requires ongoing authorizations before it will cover my continued treatment. o The plan is requiring me to try a different treatment before authorizing the treatment that my doctor recommends. o The plan will not authorize any more treatments based on the fact that I failed to complete a prior course of treatment. o The plan s prescription drug formulary design will not cover the medication my doctor is prescribing. o My plan covers my mental health or substance use disorder treatment, but does not have any reasonably accessible in-network providers for that treatment. o I am not sure how my plan calculates payment for out-of-network services, such as its methods for determining usual, customary and reasonable charges, complies with parity protections. o Other: (Specify basis for denial of, limitation on, or reduction in coverage): Because my health coverage is subject to the parity protections, treatment limits cannot be applied to mental health and substance use disorder benefits unless those limits are comparable to limits applied to medical and surgical benefits. Therefore, for the limitations or terms of the benefit plan specified above, within thirty (30) calendar days of the date appearing on this request, I request that the plan: 1. Provide the specific plan language regarding the limitation and identify all of the medical/surgical and mental health and substance use disorder benefits to which it applies in the relevant benefit classification; 2. Identify the factors used in the development of the limitation (examples of factors include, but are not limited to, excessive utilization, recent medical cost escalation, high variability in cost for each episode of care, and safety and effectiveness of treatment); 3. Identify the evidentiary standards used to evaluate the factors. Examples include, but are not limited to, the following: Excessive utilization as defined by two standard deviations above average utilization per episode of care; Recent medical cost escalation as defined by medical costs for certain 2

20 services increasing 10% or more per year for 2 years; High variability in cost per episode of care as defined by episodes of outpatient care being 2 standard deviations higher in total costs than the average cost per episode 20% or more of the time in a 12-month period; and Safety and efficacy of treatment modality as defined by 2 random clinical trials required to establish a treatment is not experimental or investigational; 4. Identify the methods and analysis used in the development of the limitation; and 5. Provide any evidence and documentation to establish that the limitation is applied no more stringently, as written and in operation, to mental health and substance use disorder benefits than to medical and surgical benefits. Printed Name of Individual Enrolled in the Plan or his or her Authorized Representative I am an authorized representative requesting information for the following individual enrolled in the plan:. Attached to this request is an authorization signed by the enrollee. Signature of Individual Enrolled in the Plan or his or her Authorized Representative Member Number (number assigned to the enrolled individual by the Plan) Address Date address (if is a preferred method of contact) 3

21 About This Tool Self-Compliance Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA) The goal of this self-compliance tool is to help group health plans, plan sponsors, plan administrators, group and individual market health insurance issuers, State regulators and other parties determine whether a group health plan or health insurance issuer complies with the Mental Health Parity and Addiction Equity Act (MHPAEA), and additional, related requirements that apply to Employee Retirement Income Security Act of 1974 (ERISA) group health plans. The requirements described in this tool generally apply to group health plans, group health insurance issuers, and individual market health insurance issuers. However, requirements that do not apply as broadly are noted. This tool is does not provide legal advice. Rather, it gives the user a basic understanding of MHPAEA to assist in evaluating compliance with its requirements. For more information on MHPAEA, or related guidance issued by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments), please visit Furthermore, as directed by Section 13001(a) of the 21 st Century Cures Act, this publicly available tool is as a compliance program guidance document to improve compliance with MHPAEA. The Department will update the self-compliance tool biennially to provide additional guidance on MHPAEA s requirements, as appropriate. MHPAEA, as a Federal law, sets minimum standards for group health plans and issuers with respect to parity requirements. However, many States have enacted their own laws to advance parity between mental health and substance use disorder benefits and medical/surgical benefits by supplementing the requirements of MHPAEA. Insured group health plans and issuers should check with their State regulators to understand the full scope of applicable parity requirements. Increased public awareness and commitment to successful implementation of MHPAEA and State parity laws has led to the creation of private partnerships among different advocacy groups that may be a helpful resource regarding parity implementation. Introduction MHPAEA, as amended by the Patient Protection and Affordable Care Act (the Affordable Care Act), generally requires that group health plans and health insurance issuers offering group or individual health insurance coverage ensure that the financial requirements and treatment limitations on mental health or substance use disorder (MH/SUD) benefits they provide are no more restrictive than those on medical or surgical benefits. This is commonly referred to as providing MH/SUD benefits in parity with medical/surgical benefits. MHPAEA generally applies to group health plans and group and individual health insurance issuers that provide coverage for mental health or substance use disorder and benefits in addition to medical/surgical benefits. DOL has primary enforcement authority with regard to MHPAEA over private sector employment-based group health plans, while HHS has primary enforcement authority over non-federal governmental plans, such as those sponsored by State and local government employers. HHS also directly enforces MHPAEA over issuers in states that have notified HHS s Centers for Medicare & Medicaid Services that they do not have the authority to enforce or are not otherwise enforcing MHPAEA. In all other States, the State is directly enforcing MHPAEA with respect to issuers. 1 P age

22 Unless a plan is otherwise exempt, MHPAEA generally applies to both grandfathered and nongrandfathered group health plans and large group health insurance coverage. Also note that the Affordable Care Act requires plans and issuers offering coverage in the individual and small group markets to cover certain essential health benefits (EHB), including MH/SUD benefits. Final rules issued by HHS implementing EHB requirements specify that MH/SUD benefits must be offered consistent with the requirements of the MHPAEA regulations. See 45 CFR (a)(3). Under the MHPAEA regulations, if a plan or issuer provides any classification of MH/SUD benefits described in the MHPAEA final regulation, MH/SUD benefits must be provided in every classification in which medical/surgical benefits are provided. Under PHS Act section 2713, as added by the Affordable Care Act, non-grandfathered group health plans and group and individual health insurance plans are required to provide coverage for certain preventive services with no cost-sharing, which includes, among other things, alcohol misuse screening and counseling, depression screening, and tobacco use screening. However, the MHPAEA regulations does not require a group health plan or a health insurance issuer that provides MH/SUD benefits only to the extent required under PHS Act section 2713, to provide additional MH/SUD benefits in any classification. See 29 CFR (e)(3)(ii), 45 CFR (e)(3)(ii), 26 CFR (e)(3)(ii) Definitions Aggregate lifetime dollar limit means a dollar limitation on the total amount of specified benefits that may be paid under a group health plan or health insurance coverage for any coverage unit. Annual dollar limit means a dollar limitation on the total amount of specified benefits that may be paid in a 12-month period under a group health plan or health insurance coverage for any coverage unit. Cumulative financial requirements are financial requirements that determine whether or to what extent benefits are provided based on certain accumulated amounts, and they include deductibles and out-ofpocket maximums. (However, cumulative financial requirements do not include aggregate lifetime or annual dollar limits because these two terms are excluded from the meaning of financial requirements.) Cumulative quantitative treatment limitations are treatment limitations that determine whether or to what extent benefits are provided based on certain accumulated amounts, such as annual or lifetime day or visit limits. Financial requirements include deductibles, copayments, coinsurance, or out-of-pocket maximums. Financial requirements do not include aggregate lifetime or annual dollar limits. Medical/surgical benefits means benefits with respect to items or services for medical conditions or surgical procedures, as defined under the terms of the plan or health insurance coverage and in accordance with applicable Federal and State law, but not including mental health or substance use disorder benefits. Any condition defined by the plan or coverage as being or as not being a medical/surgical condition must be defined to be consistent with generally recognized independent standards of current medical practice (for example, the most current version of the International Classification of Diseases (ICD) or State guidelines). Mental health benefits means benefits with respect to items or services for mental health conditions, as defined under the terms of the plan or health insurance coverage and in accordance with applicable Federal and State law. Any condition defined by the plan or coverage as being or as not being a mental health condition must be defined to be consistent with generally recognized independent standards of current medical practice (for example, the most current version of the Diagnostic and Statistical Manual of Mental Disorders (DSM), the most current version of the ICD, or State guidelines). 2 P age

23 Substance use disorder benefits means benefits with respect to items or services for substance use disorders, as defined under the terms of the plan or health insurance coverage and in accordance with applicable Federal and State law. Any disorder defined by the plan as being or as not being a substance use disorder must be defined to be consistent with generally recognized independent standards of current medical practice (for example, the most current version of the DSM, the most current version of the ICD, or State guidelines). Treatment limitations include limits on benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits on the scope or duration of treatment. Treatment limitations include both quantitative treatment limitations (QTLs), which are expressed numerically (such as 50 outpatient visits per year), and nonquantitative treatment limitations (NQTLs), which otherwise limit the scope or duration of benefits for treatment under a plan or coverage. A permanent exclusion of all benefits for a particular condition or disorder, however, is not a treatment limitation for purposes of this definition. SECTION A. APPLICABILITY Question 1. Is the group health plan or group or individual health insurance coverage exempt from MHPAEA? If so, please indicate the reason (e.g. retiree-only plan, excepted benefits, small employer exception, increased cost exception). Comments: If a group health plan or group or individual health insurance coverage provides either mental health or substance use disorder benefits, in addition to medical/surgical benefits, the plan may be subject to the MH/SUD parity provisions. However, retiree-only group health plans, self-insured non-federal governmental plans that have obtained a waiver and group health plans and group or individual health insurance coverage offering only excepted benefits, are generally not subject to the MH/SUD parity provisions. (Note: if under an arrangement(s) to provide medical care benefits by an employer or employee organization, any participant or beneficiary can simultaneously receive coverage for medical/surgical benefits and MH/SUD benefits, the MH/SUD parity requirements apply separately with respect to each combination of medical/surgical benefits and MH/SUD benefits and all such combinations are considered to be a single group health plan. See 26 CFR (e), 29 CFR (e), 45 CFR (e)). Under ERISA, the MHPAEA requirements do not apply to small employers, defined as employers who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year. See 26 CFR (f)(1), 29 CFR (f)(1), 45 CFR (f)(1). However, under HHS final rules governing the Affordable Care Act requirement to provide EHBs, non-grandfathered health insurance coverage in the individual and small group markets must provide all categories of EHBs, including MH/SUD benefits. 45 CFR (a). The final EHB rules require that such benefits be provided in compliance with the requirements of the MHPAEA rules. 45 CFR (a)(3); See also ACA Implementation FAQs Part XVII, Q6, available at: 3 P age

24 MHPAEA also contains an increased cost exemption available to group health plans and issuers that meet the requirements for the exemption. The final rules establish standards and procedures for claiming an increased cost exemption under MHPAEA. See 26 CFR (g), 29 CFR (g), 45 CFR (g). Sponsors of self-funded, non-federal governmental plans are permitted to elect to exempt those plans from, or opt out of, certain provisions of the Public Health Service (PHS) Act, including MHPAEA. This election was authorized under section 2722(a)(2) of the PHS Act (42 USC 300gg-21(a)(2)). Question 2. If not exempt, does the group health plan or group or individual health insurance coverage provide MH/SUD benefits in addition to providing medical/surgical benefits? Comments: Unless the group health plan or group or individual health insurance coverage is exempt or does not provide MH/SUD benefits, continue to the following sections to examine compliance with requirements under MHPAEA. SECTION B. COVERAGE IN ALL CLASSIFICATIONS Question 3. Does the group health plan or group or individual health insurance coverage provide MH/SUD benefits in every classification in which medical/surgical benefits are provided? Comments: Under the MHPAEA regulations, if a plan or issuer provides mental health or substance use disorder benefits in any classification described in the MHPAEA final regulation, mental health or substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided. See 26 CFR (c)(2)(ii)(A), 29 CFR (c)(2)(ii)(A), 45 CFR (c)(2)(ii)(A). Under the MHPAEA regulations, the six classifications* of benefits are: 1) inpatient, in-network; 2) inpatient, out-of-network; 3) outpatient, in-network; 4) outpatient, out-of-network; 5) emergency care; and 6) prescription drugs. See 26 CFR (c)(2)(ii), 29 CFR (c)(2)(ii), 45 CFR (c)(2)(ii). *See special rules related to the classifications discussed below. 4 P age

25 ILLUSTRATION: Plan X provides medical/surgical benefits as well as MH/SUD benefits. While the Plan covers medical/surgical benefits in all benefit classifications, it does not cover outpatient services for MH/SUD benefits for either in-network or out-of-network providers. In this example, since the Plan fails to provide MH/SUD benefits in outpatient, in-network and outpatient, out-of-network classifications in which medical/surgical benefits are provided, the Plan fails to meet MHPAEA s parity requirements. Classifying benefits. In determining the classification in which a particular benefit belongs, a group health plan or group or individual market health insurance issuer must apply the same standards to medical/surgical benefits as to MH/SUD benefits. See 26 CFR (c)(2)(ii)(A), 29 CFR (c)(2)(ii)(A), 45 CFR (c)(2)(ii)(A) This rule also applies to intermediate services provided under the plan or coverage. Plans and issuers must assign covered intermediate MH/SUD benefits (such as residential treatment, partial hospitalization and intensive outpatient treatment) to the existing six classifications in the same way that they assign intermediate medical/surgical benefits to these classifications. For example, if a plan classifies care in skilled nursing facilities and rehabilitation hospitals for medical/surgical benefits as inpatient benefits, it must classify covered care in residential treatment facilities for MH/SUD benefits as inpatient benefits. If a plan treats home health care as an outpatient benefit, then any covered intensive outpatient MH/SUD services and partial hospitalization must be considered outpatient benefits as well. A plan or issuer must also comply with MHPAEA s nonquantitative treatment limitations (NQTL) rules, discussed in Section F, in assigning any benefits to a particular classification. See 26 CFR (c)(4), 29 CFR (c)(4), 45 CFR (c)(4). Medication Assisted Treatment (MAT) is subject to MHPAEA Plans and issuers that offer MAT benefits to treat opioid use disorder are subject to MHPAEA requirements, including the special rule for multi-tiered prescription drug benefits which apply to the medication component of MAT. The behavioral health services components of MAT should be treated as outpatient benefits and/or inpatient benefits as appropriate for purposes of MHPAEA. Ensure that there are NO impermissible QTLs, such as visit limits, or impermissible NQTLs, such as limits on treatment dosage and duration. ILLUSTRATION: An issuer did not cover methadone for opioid addiction though it did cover methadone for pain management. The issuer failed to demonstrate that the processes, strategies, evidentiary standards, and other factors used to develop the methadone treatment exclusion for opioid addiction are comparable to and applied no more stringently than those used for medical/surgical conditions. The issuer re-evaluated the medical necessity of methadonemaintenance treatment programs and developed medical-necessity criteria that mirrors Federal guidelines for opioid treatment programs to replace the methadone-maintenance treatment exclusion. Treatment for eating disorders is subject to MHPAEA Eating disorders are mental health conditions, and treatment of an eating disorder is a mental health benefit within the meaning of that term as defined by MHPAEA. See ACA Implementation FAQs Part 38, Q1, available at Section of the Cures Act provides that if a plan or an issuer provides coverage for eating disorders, including residential treatment, they must provide these benefits in accordance with the requirements under MHPAEA. 5 P age

26 Compliance Tips If the plan or issuer does not contract with a network of providers, all benefits are out-of-network. If a plan or issuer that has no network imposes a financial requirement or treatment limitation on inpatient or outpatient benefits, the plan or issuer is imposing the requirement or limitation within classifications (inpatient, out-of-network or outpatient, out-of-network), and the rules for parity will be applied separately for the different classifications. See 26 CFR (c)(2)(ii)(C), 29 CFR (c)(2)(ii)(C), Example 1. If a plan or issuer covers the full range of medical/surgical benefits (in all classifications, both in-network and out-of-network), beware of exclusions on out-of-network MH/SUD benefits. Benefits for intermediate services (such as non-hospital inpatient and partial hospitalization) must be assigned to classifications using a comparable methodology across medical/surgical benefits and MH/SUD benefits. *NOTE: Special rules related to classifications 1. Special rule for outpatient sub-classifications: For purposes of determining parity for outpatient benefits (in-network and out-ofnetwork), a plan or issuer may divide its benefits furnished on an outpatient basis into two sub-classifications: (1) office visits; and (2) all other outpatient items and services, for purposes of applying the financial requirement and treatment limitation rules. 26 CFR (c)(3)(iii); 29 CFR (c)(3)(iii) 45 CFR (c)(3)(iii). After the sub-classifications are established, the plan or issuer may not impose any financial requirement or QTL on MH/SUD benefits in any sub-classification (i.e., office visits or non-office visits) that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/surgical benefits in the sub-classification using the methodology set forth in the final rules. See 26 CFR (c)(3)(i), 29 CFR (c)(3)(i), 45 CFR (c)(3)(i), and 45 CFR (c)(3)(iii). Other than as explicitly permitted under the final rules, sub-classifications are not permitted when applying the financial requirement and treatment limitation rules under MHPAEA. Accordingly, separate sub-classifications for generalists and specialists are not permitted. 2. Special rule for prescription drug benefits: There is a special rule for multi-tiered prescription drug benefits. Multi-tiered drug formularies involve different levels of drugs that are classified based primarily on cost, the lowest-tier (Tier 1) drugs having the lowest cost-sharing. If a plan or issuer applies different levels of financial requirements to different tiers of prescription drug benefits, the plan complies with the mental health parity provisions if it establishes the different levels of financial requirements based on reasonable factors determined in accordance with 6 P age

27 the rules for NQTLs and without regard to whether a drug is generally prescribed for medical/surgical or MH/SUD benefits. Reasonable factors include cost, efficacy, generic versus brand name, and mail order versus pharmacy pick-up. See 26 CFR (c)(3)(iii), 29 CFR (c)(3) (iii),45 CFR (c)(3)(iii). 3. Special rule for multiple network tiers: There is a special rule for multiple network tiers. If a plan or issuer provides benefits through multiple tiers of in-network providers (such as in-network preferred and innetwork participating providers), the plan or issuer may divide its benefits furnished on an in-network basis into sub-classifications that reflect network tiers, if the tiering is based on reasonable factors determined in accordance with the rules for NQTLs (such as quality, performance, and market standards) and without regard to whether a provider provides services with respect to medical/surgical benefits or MH/SUD benefits. After the tiers are established, the plan or issuer may not impose any financial requirement or treatment limitation on MH/SUD benefits in any tier that is more restrictive than the predominant financial requirement or treatment limitation that applies to substantially all medical/ surgical benefits in the tier. NOTE: As explained in the Introduction to this section, nothing in MHPAEA requires a nongrandfathered group health plan or health insurance coverage that provides MH/SUD benefits only to the extent required under PHS Act section 2713 to provide additional MH/SUD benefits in any classification. SECTION C. Question 4. LIFETIME AND ANNUAL LIMITS Does the group health plan or group or individual market health insurance issuer comply with the mental health parity requirements regarding lifetime and annual dollar limits on MH/SUD benefits? Comments: A plan or issuer generally may not impose a lifetime dollar limit or an annual dollar limit on MH/SUD benefits that is lower than the lifetime or annual dollar limit imposed on medical/ surgical benefits. See 26 CFR (b), 29 CFR (b), 45 CFR (b). (This prohibition applies only to dollar limits on what the plan would pay, and not to dollar limits on what an individual may be charged.) If a plan or issuer does not include an aggregate lifetime or annual dollar limit on any medical/surgical benefits, or it includes one that applies to less than one-third of all medical/surgical benefits, it may not impose an aggregate lifetime or annual dollar limit on MH/SUD benefits. 26 CFR (b)(2), 29 CFR (b)(2), 45 CFR (b)(2). ILLUSTRATION: Plan Z limits outpatient substance use disorder treatments to a maximum of $1,000,000 per calendar year. With the exception of a $500,000 per year limit on chiropractic services, (which applies to less than one-third of all medical/surgical benefits), the Plan does not impose such annual dollar limits with respect to other outpatient medical/surgical benefits. In this example, the Plan is in violation of MHPAEA since the outpatient substance use disorder dollar limit is not in parity with outpatient medical/surgical dollar limits. 7 P age