Mental Health Parity Legal Requirements for Employer Health Plans: Increased Risks to Plan Sponsors

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Mental Health Parity Legal Requirements for Employer Health Plans: Increased Risks to Plan Sponsors MHPAEA Compliance, Enforcement, Litigation and Best Practices for Health Plan Audits TUESDAY, JULY 17, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Ryan C. Temme, Attorney, Groom Law Group, Washington, D.C. Christopher W. Welsch, Attorney, Winston & Strawn, Chicago The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 1.

2 Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, please send us a chat or sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

3 Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you that you will receive immediately following the program. For additional information about continuing education, call us at ext. 2.

4 Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to Conference Materials in the middle of the lefthand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

5 Mental Health Parity Legal Requirements for Employer Health Plans: Increased Risks to Plan Sponsors 5 JULY 1 7, 2018 Ryan Temme Groom Law Group Washington, DC RTemme@groom.com Chris Welsch Winston & Strawn LLP Chicago, IL CWelsch@winston.com

6 Overview 6 I. Overview of MHPAEA requirements and exceptions for plans providing MH/SUD benefits II. DOL, HHS and Treasury guidance for MHPAEA and ERISA compliance III. DOL parity compliance enforcement and handling health plan audits IV. Class action lawsuits and preventative methods to avoid them V. Best practices for conducting internal audits of group health plans for MHPAEA compliance

7 I. Overview of MHPAEA requirements and exceptions for plans providing MH/SUD benefits 7 T h e M e n t a l H e a l t h P a r i t y A c t o f p r o h i b i t s g r o u p h e a l t h p l a n s f r o m p l a c i n g l i f e t i m e o r a n n u a l l i m i t s o n m e n t a l h e a l t h b e n e f i t s t h a t d i d n o t a p p l y t o s u b s t a n t i a l l y a l l m e d i c a l / s u r g i c a l b e n e f i t s. T h e P a u l W e l l s t o n e a n d P e t e D o m e n i c i M e n t a l H e a l t h P a r i t y a n d A d d i c t i o n E q u i t y A c t o f ( t h e A c t ) p a s s e d i n a n d w a s i n t e n d e d t o p r o v i d e p a r i t y f o r t r e a t m e n t l i m i t s a n d f i n a n c i a l r e q u i r e m e n t s. T h e A c t w a s e f f e c t i v e J a n u a r y 1, f o r c a l e n d a r y e a r p l a n s ( p r i o r t o t h e i s s u a n c e o f r e g u l a t i o n s ).

8 Background: MHPAEA Regulations 8 Interim Final Rule (IFR) was issued by IRS, CMS and DOL on February 2, The IFR was applicable for the first plan year beginning on or after July 1, IFR established parity standards for financial requirements, quantitative treatment limits and non-quantitative treatment limits on a classification-by-classification basis.

9 Interim Final Rule 9 The IFR required parity for both quantitative and non-quantitative treatment limits ( NQTLs ). NQTLs are any limitation on the scope or duration of coverage that cannot be measured numerically. The IFR also required that parity be analyzed on a classification basis, and described six classifications that plans must use. Inpatient, in-network; Inpatient, out-of-network; Outpatient, in-network; Outpatient, out-of-network; Emergency care; and Prescription drug

10 Final Rule 10 The Final Rule was issued by IRS, CMS and DOL on November 13, 2013 The Final Rule was applicable for the first plan year beginning on or after July 1, 2014 The Final Rule permitted sub-classifications, established requirements for intermediate levels of care and added examples of non-quantitative treatment limits

11 Classifications and Coverage Units 11 Specific classifications required by the rule are: Inpatient, in-network Sub-classification for multiple network tiers; Inpatient, out-of-network Outpatient, in-network Sub-classification for office visits; Sub-classification for multiple network tiers; Outpatient, out-of-network Sub-classification for office visits; Emergency care Prescription drug

12 Financial Requirements 12 The Act requires that financial requirements that apply to mental health or substance use disorder benefits be no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan. Financial requirements include deductibles, copayments, coinsurance and out-ofpocket maximums A plan may not (without passing the parity tests) treat all mental health/substance abuse disorder providers as specialists and automatically apply a higher copayment than for primary care physicians for medical/surgical

13 Financial Requirements Add l Guidance 13 MHPAEA Final Rule [A]ny reasonable method may be used to determine the dollar amount expected to be paid under a plan for medical/surgical benefits subject to a financial requirement or quantitative treatment limitation. 45 CFR (c)(i)(E). Data must be reasonable and must result in reasonable projections. FAQs in April and October provided additional guidance on the flexibility that issuers retained to utilize data that is not specific to the plan in question.

14 Data Requirements Under FAQs 14 Step 1: Large group/self-funded: Is group health plan level data sufficient? Small group/individual: Is plan level data (combination of benefit design, cost-sharing, network type, and service area) sufficient? If yes, then that data must be used. If no, then go to Step 2. Step 2: Large group/self-funded: Is product level data (note: not a defined term) sufficient? Small group/individual: Is product (combination of benefit design, network type, and service area) level data sufficient? If yes, then that must be used. If not, then go to Step 3. Step 3: All markets: Use data from other similarly structured products or plans with similar demographics that is actuarially appropriate.

15 Quantitative Treatment Limits 15 Quantitative treatment limitations expressed numerically. Examples are day and visit limits Same predominant and substantially all test as financial requirements Quantitative treatment limits cannot accumulate separately

16 Non-quantitative Treatment Limits: Defined 16 Non-quantitative treatment limitations are limitations that affect the scope or duration of benefits under the plan that is not expressed numerically. Any processes, strategies, evidentiary standards or other factors used in applying the non-quantitative treatment limitation to mental health/substance use disorder benefits must be comparable to and applied no more stringently than the processes, strategies, evidentiary standards or other factors used in applying the limitation with respect to medical/surgical benefits in the same classification. Under the Interim Final Rule, variation was allowed to the extent that recognized clinically appropriate standards of care may permit a difference.

17 Non-quantitative Treatment Limits: Examples in the Final Rule 17 The Final Rule includes additional examples of NQTLs including (1) sub-classifications for multiple network tiers and benefits furnished on an outpatient basis; (2) variation in training and state licensing requirements; (3) medical management techniques; (4) coverage of treatment settings; (5) geographic coverage limitations; and (6) prior authorization requirements.

18 Non-quantitative Treatment Limits: Provider Reimbursement and Qualifications 18 Provider Reimbursement Rate and Provider Qualifications Issuers and plans may consider the following in determining provider reimbursement rates for mental health and substance use disorder providers: Service type Geographic market Demand for services Supply of providers Provider practice size Medicare reimbursement rates Training, experience, and licensure of providers

19 Residential Treatment, Partial Hospitalization and Intensive Outpatient Treatment 19 Plans and issuers must assign covered intermediate mental health and substance use disorder benefits to the existing six benefit classifications in the same way that they assign comparable intermediate medical/surgical benefits to those classifications. The Final Rule requires assignment of covered services for intermediate levels of care and is not a mandate. The new Facility Type NQTL could require care in certain settings, however.

20 Preventive Services 20 Under the Interim Final Rule, if a plan or issuer provides mental health/substance use disorder benefits in any classification, mental health/substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided. Section 2713 of the PHSA requires non-grandfathered group health plans and issuers to provide coverage for certain preventive services without cost sharing includes alcohol misuse screening and counseling and tobacco use screening. The Final Rule clarifies that compliance with Section 2713 of PHSA will not require that the full range of benefits for a mental health/substance use disorder be provided under the Act.

21 State Insurance Law 21 The Final Rule clarified that if a state law requires an issuer to offer coverage for a particular condition or offer a minimum dollar amount of mental health/substance use disorder benefits, the benefits for that condition must be provided in parity with medical/surgical benefits. If a state mandates a mental health benefit, and requires an annual dollar limit, the annual dollar limit is preempted by the Act.

22 Required Disclosure 22 The Final Rule requires the following disclosures: o plan information on medical necessity criteria must be disclosed to contracting providers; o the reason for denial of a claim for mental health/substance use disorder services must be disclosed to the participant, or the participant s authorized representative (including authorized providers); o information on medical necessity criteria for mental health/substance use disorder benefits (and processes, strategies, evidentiary standards, and other factors used to apply non-quantitative treatment limits) are considered plan documents under which the plan is established or operated that must be furnished to plan participants under section 104 of ERISA.

23 No Annual Parity Analysis Plan or issuer is not required to perform the parity analysis each plan year unless there is a change in plan benefit design, cost-sharing, or utilization that would affect a financial requirement or treatment limitation within a classification (or sub-classification). 23

24 Key Parity Issues 24 Autism/ABA coverage Treatment of transgender benefits Coverage of residential treatment centers Financial testing Book of Business Testing Reimbursement parity Medical management preauthorizaiton, concurrent care

25 Private & Public Enforcement 25 MHPAEA may be enforced by both public and private parties Public Enforcement (Federal and State) State Insurance regulators (against insurers) HHS (against insurers and nonfederal gov t plans) DOL (against group health plans) IRS (against group health plans and church plans) Private Litigation Class actions by individual and group policyholder subscribers Individual lawsuits by individual and group policyholders (including employers as plan fiduciaries) Associations of providers and advocacy groups (see MHPAEA cases)

26 II. DOL, HHS and Treasury guidance for MHPAEA and ERISA compliance 26 FAQs on MHPAEA Implementation Most recent proposed FAQs Part 39 Updated compliance tool Earlier FAQs for MHPAEA Regulations

27 MHPAEA FAQs 27 FAQs About Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Released jointly by three departments: DOL, HHS and Treasury DOL: Employee Benefits Security Administration (EBSA) HHS: Centers for Medicare and Medicaid Services (CMS) Treasury: Internal Revenue Service (IRS) Reflects overlapping enforcement responsibilities Different jurisdictions of IRS, EBSA, CMS over coverage providers ERISA, the Code, and PHSA See also: FAQs about Affordable Care Act Implementation

28 Proposed MHPAEA FAQs Released April 23, 2018 Comments went through June 22, 2018 Awaiting finalized FAQs MHPAEA self-compliance tool Reports (Part III of webinar) 2018 Report to Congress (Pathway to Full Parity) 2017 MHPAEA Enforcement Fact Sheet Action plan for enhanced enforcement

29 Proposed MHPAEA FAQs Updated draft model disclosure form (FAQ 1) Individuals use to request information pertaining to plan MH benefits Updated from 2017 version Describes MHPAEA requirements (2-page summary) Participant selects options that describe their benefit claim denial (or general information request) Participant selects options for specific information requested, such as plan language, decision factors, evidentiary standards

30 Proposed MHPAEA FAQs Participant information request Group health plan generally must respond within 30 days of request Claim denials often prompt the request But no justification is needed to make MHPAEA information request

31 Proposed MHPAEA FAQs NQTL issues covered in FAQs 2-10 Experimental limitations Autism Spectrum Disorder and Applied Behavioral Analysis (ABA) Opioid use disorder & dosage limits Prescription drug limitations Step therapy Reimbursement rates Network adequacy Medical appropriateness ER

32 Updated MHPAEA Self-Compliance Tool 32 Checklist tool updated for 2018 Plan sponsors can use in self-audit for MHPAEA compliance DOL investigators use the same checklist in EBSA investigations Covers MHPAEA obligations Whether the plan is subject to MHPAEA Six classifications Financial requirements Treatment limitations, both quantitative and non-quantitative Disclosure requirements

33 MHPAEA FAQs 33 3 Departments (DOL, HHS, Treasury) but DOL site generally has the most easily accessible listing of all the FAQs Current link: Originally ACA FAQs, but many of the FAQs touch on MHPAEA MHPAEA is 3-department market reform, similar to ACA Both integrated into ERISA, PHSA, and tax Code Implementation happening around the same time as ACA

34 MHPAEA FAQs 34 Part V (Dec 22, 2010) small employers; information requests; cost exemption Part VII (Nov 17, 2011) preauthorization; medical management; evidentiary standards; copayments Part XVII (Nov 8, 2013) effective dates; NQTLs; MHPAEA coverage; medical management; information requests Part XVIII (Jan 9, 2014) ACA & MHPAEA Part XXIX (Oct 23, 2015) information requests (trade secrets)

35 MHPAEA FAQs 35 Part 31 (Apr 20, 2016) financial requirements and QTLs; preauthorization; information requests (potential enrollee); opioids Part 34 (Oct 27, 2016) NQTLs; information requests (enforcement); FRs & QTLs; opioids; preauthorization; court-ordered treatment Part 38 (Jun 16, 2017) information requests; eating disorders Part 39 (proposed)

36 Regulations Implementing MHPAEA 36 IFR released by 3 Depts in 2010, implementing MHPAEA Final Regulations implementing MHPAEA published 2013 IRS: Treas. Reg TD 9640 DOL: Labor Reg HHS: 45 CFR

37 III. DOL parity compliance enforcement and handling health plan audits 37 DOL enforcement record and history DOL Action Plan, with HHS and IRS, re priorities and next steps Investigation process Outcomes of DOL investigations

38 DOL parity enforcement 38 EBSA closed 347 health investigations in FY ,286 health investigations closed since FY 2011 Of 347 closed investigations in 2017, 187 involved plans subject to MHPAEA (53.9%) Of 187 investigations where MHPAEA applied in 2017, EBSA cited 92 violations for MHPAEA noncompliance (49%)

39 DOL parity enforcement 39

40 DOL parity enforcement 40 EBSA closed 330 health investigations in FY 2016 Of 330 closed investigations,191 involved plans subject to MHPAEA (57.9%) Of 191 investigations where MHPAEA applied, EBSA cited 44 violations for MHPAEA noncompliance (23%)

41 DOL parity enforcement 41

42 DOL parity enforcement 42

43 DOL parity enforcement 43 DOL enforcement: Back to 2010, NQTLs are the most common violation NQTLs are about as common as all the other violations together Frequency: a few hundred cases a year Outcome: In 2016, a quarter of DOL investigations had MHP violations of any type In 2017, half of DOL investigations had MHP violations of any type

44 MHPAEA enforcement Action Plan 44 Action Plan for Enhanced Enforcement (HHS, DOL, Treasury) EBSA to continue enforcement against employer plans CMS enforces against nonfed gov plans (and insurers, with the states) EBSA is establishing dedicated MHPAEA enforcement teams investigations of behavioral health organizations & insurance companies DOL updated self-compliance checklist re NQTLs and disclosure Regulatory focus on disclosure requirements to participants Parity Portal for consumers to determine if parity violation occurs

45 DOL MHPAEA Audits 45 Comprehensive MHPAEA audits which focus on issuers when group health plan is insured. Some investigations of insurer s entire book of business What s Being Examined? Parity of financial benefits/cost-sharing Comparison of treatment limits for med/surgical and MH/SUD benefits Comparison of NQTLs for med/surgical and MH/SUD benefits Disclosure of denied/partially denied mental health/substance use disorder claims All external review decisions relating to MH/SUD claims Analyses by plan or issuer re: testing of NQTL for parity Autism benefits

46 DOL Audits Enforcement Authority 46 DOL authority is very broad DOL does not need reasonable cause to investigate Investigation can focus on any party Subpoena power Audit can lead to penalties through other agencies Example: DOL often shares information with IRS

47 DOL Audits Enforcement Priorities 47 Financial Requirement Testing NQTLs Medical Management, RTC Disclosures Claims review Accuracy and timing

48 DOL Audits Document Request Plan documents in effect Summary plan description Trustee or fiduciary committee minutes Form 5500/Summary Annual Report All correspondence with plan service providers, or relating to any plan matter Sponsor annual reports, contracts with insurers Detailed documentation of plan administrative expenses Fidelity bond and fiduciary liability policies List of sponsor s officers, board of directors Other plan materials (Trust and participation agreements, plan merger documents, participant contribution records, investment policy, plan receipt and disbursement journals) 48

49 DOL Audits Potential Outcomes 49 Voluntary Compliance notice letter ( 10-Day letter ) describes violations and invites correction Settlement agreement DOL s claim for ERISA violation is released in return for cash or property tendered to a plan, participant, or plan beneficiary Results from negotiation between parties regarding implementation of correction Penalty likely applies with respect to settlement amount Closing letters No violations No action warranted - Even though violations may have been identified Compliance achieved - Violations were identified and correction may have been made to DOL s satisfaction

50 IV. Class action lawsuits and preventative methods to avoid them 50 P r i v ate enforcement litigation DOL has been slow to litigate enforcement of MHP Private litigation is enforcing MHP M ajor i s s u es Treatment exclusions & limitations Autism and applied behavior analysis (ABA) Addiction and residential treatment centers (RTC) Transgender-related benefits Reimbursement rates Preauthorization

51 Class action MHPAEA lawsuits - ABA 51 Applied behavioral analysis (ABA) Incredibly broad discipline, not just autism treatment Common point of contention in health plans re autism treatment ABA acceptance Increasingly common in health plans Employees may demand coverage; ABA is generally very expensive State law may require ABA coverage in insurance Missouri fined Aetna $1.5M in 2012 and $4.5M in 2015 for failure to cover autism spectrum disorder, including ABA therapy

52 Class action MHPAEA lawsuits - ABA 52 Excluding ABA from group health plan MHPAEA allows a plan to exclude ABA as experimental/investigative This is a nonquantitative treatment limitation The standard for experimental/investigative must be the same for medical/surgical benefits as for ABA and MH/SUD benefits ABA exclusion in MHPAEA FAQs, Part 39 Q/A-2 covered a discriminatory exclusion of ABA as experimental Plan definition of experimental must be consistent for medical & MH

53 Class action MHPAEA lawsuits - ABA 53 Autism exclusion MHPAEA does not necessarily require autism coverage State law often mandates autism coverage, where applicable Employees may expect or demand autism coverage Is autism mental health? Autism might not be per se mental health (FAQs 39 sidestepped) Courts have held it is MH for at least some purposes; state laws have DSM and ICD define as developmental disability Plan should be clear if taking position autism is not mental health

54 Class action MHPAEA lawsuits - ABA 54 A.F. v. Providence Health Plan (D. Or. 2014) Class certified & case decided Case was decided against Providence Anthem developmental disability exclusion for ABA therapy Developmental disability exclusion violates MHPAEA (& Oregon law) Developmental disabilities are mental health conditions for MHPAEA Looked at Oregon state law, cf. NJ state law, federal law

55 Class action MHPAEA lawsuits - ABA 55 Wilson v. Anthem (W.D. Ky.) Class certified Anthem limits coverage for autism 1,000 hrs/yr for ages hrs/mo for ages 7-21 Plaintiff alleges QTL and annual limit violations Anthem argued autism may not be MH in all states and may vary by individual and so mental health cannot be answered class-wide Court certified class; autism & MH is a common question to the class

56 Class action MHPAEA lawsuits - ABA 56 Graddy v. Blue Cross Blue Shield (E.D. Tenn. 201) Class denied Denial of coverage for ABA Claims needed individualized assessments, so class denied More cases pending Categorical exclusions of ABA Medical necessity and ABA Categorical exclusion of autism Age and frequency QTLs on treatment

57 Class action MHPAEA lawsuits - ABA 57 Extensive settlements over ABA; not an exhaustive list Many of these are standalone insurers, not employer GHPs State law generally always applies to insurer coverage Settlements (2014): Premera Blue Cross (W.D. Wash.) Class certified Federal W.D. Wash., also 2 state court cases in WA $3.5M settlement Premera BC agreed to end outright exclusions for autism treatment and remove agebased limitations

58 Class action MHPAEA lawsuits - ABA 58 Settlement (2014): Churchill v. Cigna (E.D. Pa.) Class certified Cigna excluded ABA therapy from standard plans $2.4M for 400 class members Settlement (2015): C.S. v. Boeing Master Welfare Plan (W.D. Wash.) Class certified Employer group health plan No covered providers offered ABA therapy Allegation: plan excluded all ABA with hidden limitations and exclusions $900,000 for 1,400 claims

59 Class action MHPAEA lawsuits - ABA 59 Settlement (2016): A.P. v. T-Mobile USA EB Plan (W.D. Wash.) Class certified Employer group health plan $677k for 550 class members Plan to cover ABA without caps, limits or exclusions Settlement (April 2018): W.P. v. Anthem (S.D. Indiana) Class certified Anthem limited hours of ABA therapy covered for children 7+ $1.625M settlement for 200 class members Anthem to stop using guidelines limiting ABA based on age

60 Class action MHPAEA lawsuits - ABA 60 ABA/autism takeaways State law, if applicable to the group health plan Age-based limitations on ABA Flat exclusion after certain age Hours or sessions limit is QTL and must be equivalent to medical benefits Medical necessity is NQTL; must use same standard applied to medical Categorical exclusions likelier to be certified Medical necessity may require individualized proof (no class) Medical necessity versus categorical exclusions

61 Class action MHPAEA lawsuits - RTC 61 Residential Treatment Centers Live-in health care facility outside a hospital Treatment for substance abuse, mental illness, behavioral problems Alcohol and drug dependency Eating disorders, anorexia, obesity Other mental health or personality disorder issues For MHPAEA purposes, commonly litigated Wilderness therapy RTC meets Outward Bound Therapy in a context of hiking/camping context, plus outdoor education

62 Class action MHPAEA lawsuits - RTC 62 RTC litigation issues Medical necessity and whether patient could be treated elsewhere E.g. out-patient treatment rather than in-patient RTC Medical necessity over time, after receiving a level of care How long of an RTC stay was medically necessary? Does the RTC meet the plan definition? Is the treatment provided by appropriate medical professionals? Is wilderness treatment medically necessary? Is wilderness therapy covered as RTC?

63 Class action MHPAEA lawsuits - RTC 63 Daniel F. v. Blue Shield of Cal. (N.D. Cal. 2014) Class denied Denial of coverage for residential treatment center Ascertainability would necessitate individualized inquiries to see whether an individual was wrongly denied RTC coverage Takeaway: individualized medical necessity determinations can avoid class certification

64 Class action MHPAEA lawsuits - RTC 64 Welp v. Cigna (S.D. Fla. 2017) Case dismissed; proposed class never certified Employer group health plan Wilderness therapy denied based on lack of doctors and licensed therapists sufficient to meet the standards of psychiatric RTCs Case dismissed because plaintiff did not provide a medical/surgical analogue to demonstrate lack of parity for mental health benefits Takeaway: claim denial over trained/licensed professionals, which is a NQTL; must expect same for medical benefits

65 Class action MHPAEA lawsuits - RTC 65 William G. v. United Healthcare (D. Utah) Case still ongoing against employer GHP Multiple wilderness treatment centers denied; preauthorization Motion to dismiss on SOL grounds denied due to notice failure Denial letter from plan did not disclose the limitations period, as required by Labor Reg (g)(1)(iv), so SOL defense rejected Takeaway: make sure plan denial letters are compliant in form

66 Class action MHPAEA lawsuits - RTC 66 Joseph F. v. Sinclair (D. Utah 2016) Case decided against health plan Categorical exclusion of RTC Plan argued RTC exclusion applies to both mental health and medical benefits, so does not violate parity (parties agree to treat as NQTL) Court: plan definition of RTC is exclusively mental health coverage Takeaway: review categorical exclusions for parity effects

67 Class action MHPAEA lawsuits - RTC 67 Michael P. v. Aetna Life Ins. Co. (D. Utah, 2017) Case decided in favor of employer GHP RTC coverage required RTC be licensed under Aetna criteria and be supervised by licensed psychiatrist; RTC facility at issue was neither Court: if the licensing requirements are clinically appropriate with regard to RTCs, then no disparity even if it reduces MH treatment Takeaway: medical necessity can survive disparate outcomes

68 Class action MHPAEA lawsuits - RTC 68 Settlement: Craft v. Health Care Serv. Corp. (N.D. Ill. 2015) Class certified $5.25M settlement Court: RTC exclusion resulted in less coverage of medically necessary care than that covered for medical benefits Note: This seems directly at odds with Michael P. v. Anthem, but defendant here failed to define RTC coverage based on medical necessity Takeaway: medical necessity is safer than categorical exclusion

69 Class action MHPAEA lawsuits - RTC 69 Other RTC issues being litigated: Categorical exclusion of RTCs Precertification RTC litigation takeaways Medical necessity is safer than categorical exclusion Individualized necessity determinations can avoid class certification Licensing requirements for RTCs Review categorical exclusions for parity effects

70 Class action MHPAEA lawsuits 70 Other issues Reimbursement rates: New York State Psychiatric Association allowed to sue Anthem over reimbursement rates Associations can litigate under MHPAEA to serve corporate purpose Eating disorders See FAQs Part 38; eating disorders are mental health conditions and eating disorder coverage is a mental health benefit under MHPAEA Opioid addiction and treatment

71 V. Best practices for conducting internal audits of group health plans for MHPAEA compliance 71 Comprehensive Review of MHPAEA compliance Either conduct in house or through counsel/consultants Eliminates significant MHPAEA c o m p l i a n c e r i s k

72 Internal Audits 72 Classifications How is the plan classifying benefits Are criteria used and applied consistently Are there any red flags (i.e., all lab benefits are considered medical)?

73 Internal Audits 73 Financial Requirements The basics Does the plan have support under the substantially all and predominant level tests for cost shares imposed on MH/SUD benefits. What methodology did the plan/issuer use. How frequently is the testing updated?

74 Internal Audits 74 Step 1 Identify NQTLs that apply to MH/SUD benefits Step 2 Review why/how the plan imposes them on MH/SUD benefits Step 3 Document the analysis supporting the NQTL Step 4 Update policies and procedures to bolster that analysis

75 Internal Audits 75 Disclosures Does the plan have the ability to respond to requests under 104(b) of ERISA regarding NQTL compliance? Can the plan provide supporting documents in the event of a benefits denial?

76 Questions? 76 Ryan Temme Groom Law Group Washington, DC Chris Welsch Winston & Strawn LLP Chicago, IL