On June 26, 2024, the US Food and Drug Administration (FDA) released its much-anticipated draft guidance on Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies. The draft guidance provides valuable information about what steps the FDA will expect sponsors to take to promote adequate representation across demographic characteristics in study populations.
Recent lawsuits filed against the group health plans of two large US employers underscore the importance of implementing formal welfare benefit plan governance structures that include fiduciary committees comparable to the governance structures employer sponsors of retirement plans routinely adopt. Establishing such committees can help employers reduce litigation risk and ensure compliance with Employee Retirement Income Security Act fiduciary standards.
The Biden administration recently released its Spring 2024 Unified Agenda (a few months late), which lists all the regulations that the administration plans to issue by the end of the year and beyond.
In this update, Jeffrey Davis previews new regulations that could impact the health and welfare benefits industry related to the No Surprises Act, new standards for the exchange of health information under the Health Insurance Portability and Accountability Act, the finalization of new Mental Health Parity and Addiction Equity Act rules, and more.
If our trade and industry sources have it right, we could see final regulations implementing the Mental Health Parity and Addiction Equity Act (MHPAEA), as most recently amended by the Consolidated Appropriations Act, 2021 (CAA), any day now. Last week, we offered a wish list of things we would like to see modified or addressed once the rules become final. Our previous MHPAEA commentary is available here.
An August 1, 2024, letter from Viginia Foxx, chairwoman of the US House of Representatives Committee on Education and the Workforce, to the secretaries of the US Department of Health and Human Services (HHS) and the US Department of the Treasury (Treasury) and the acting secretary of the US Department of Labor (DOL) leads us to add one more item to our wish list. It relates to a subject that has been a major item of contention and the cause of considerable frustration in MHPAEA audits: network composition and adequacy.
The CAA added a requirement that plans and issuers perform and document comparative analyses of the design and application of nonquantitative treatment limitations (NQTLs) on mental health and substance use disorder (MH/SUD) benefits and medical and surgical (M/S) benefits. Nothing in the CAA modifies prior law relating to network composition or adequacy, however. MHPAEA generally requires that the application of NQTLs on MH/SUD benefits “in operation” be comparable and no more stringent than on M/S benefits. In the case of an audit, the DOL has analyzed diverse types of outcomes data, such as denial or reimbursement rates.
But – and this is critical – nothing in existing law requires comparability of outcomes. Indeed, the DOL’s self-compliance tool makes clear that disparate outcomes are not determinative of noncompliance, recognizing that the law requires only that the processes and standards used in applying the NQTL be comparable across MH/SUD and M/S benefits. Different outcomes can still be MHPAEA-compliant. An intervening FAQ (No. 7) suggests otherwise, saying that disparate outcomes raise a “red flag.” FAQs lack the force of law, however.
The proposed rules upend current law by making differences in outcomes a strong indicator of noncompliance or, in the case of network composition, a conclusive determination of noncompliance. Chairwoman Foxx criticizes this approach, saying that “This [ ] suggests that approval or denial rates in either a MH/SUD or M/S context are indicative of appropriateness.” This is in her view a flawed assumption. She also claims that the DOL, HHS and Treasury (the Departments) have exceeded their statutory authority in the matter. The DOL is in our experience applying this rule on audit as though the proposed rule is the law.
We express no opinion on whether the proposed rule comports with the statue. This is for the courts to decide. It’s no secret, however, that the Departments now face a higher bar in the wake of the US Supreme Court’s decision in Loper Bright Enterprises v. Raimondo (wherein the Court overruled the [...]
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In this “Trending in Telehealth” installment, Amanda Enyeart and Jay Hyun Lee of McDermott’s Healthcare Group highlight a new Pennsylvania law that requires health insurance coverage for telehealth and in-home program services for pregnant and postpartum women.
The McDermott+ Check-Up features updates on healthcare legislative and regulatory activities that could impact health insurers, group health plan sponsors, healthcare providers and others in the health benefits industry. This post covers a recent Federal Trade Commission report on anticompetitive behaviors by pharmacy benefit managers as well as recent Senate hearings on medical debt and healthcare transparency.
On July 1, 2024, the US Department of Labor (DOL) submitted final regulations to the Congressional Budget Office (CBO), implementing the Mental Health Parity and Addiction Equity Act (MHPAEA) as most recently amended by the Consolidated Appropriations Act, 2021 (CAA). The CAA added a requirement that plans and issuers perform and document comparative analyses of the design and application of nonquantitative treatment limitations (NQTLs) on mental health and substance use disorder benefits (MH/SUD) and medical and surgical (M/S) benefits. Submission to the CBO is the last step in the process of issuing a binding, final rule. The agency ordinarily acts on these submissions within 90 days, but it is widely anticipated that the final rule will be issued sooner.
The final regulations implement proposed regulations issued in July 2023, which were widely commented on. Our previous content explaining the proposed regulations, including a series of blog posts commenting on the comments, is available here.
To call the proposed rule contentious is an understatement, and the stakes for group health plan sponsors that provide mental health benefits are significant. Many comments on the proposed regulations asked the regulators to withdraw the proposed rule and to reconsider the issue anew. While the chance of that happening was always remote, it is now clear that this is not going to happen. There will shortly be final regulations. Recognizing this to be the case, here are six items in the proposed regulations that we would like to see changed or clarified.
MHPAEA generally provides that financial requirements and treatment limitations imposed on MH/SUD benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all M/S benefits in a classification. The 2013 final regulations established the following classifications for this purpose: inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs. “Treatment limitations” can be either quantitative treatment limitations (QTLs) (e.g., visit limits) or NQTLs (i.e., concurrent review). The rules for the testing of QTLs set out in the 2013 final regulations include detailed numerical standards, which have spawned a cottage industry for testing services.
The proposed regulations would impose quantitative testing requirements on NQTLs. This is at least modestly counterintuitive. It would also make an already complex testing rule materially more complicated. It is our hope that the DOL, US Department of Health and Human Services, and the US Department of the Treasury (the Departments) see fit to back away from this requirement.
The proposed regulations establish a three-prong test that plans and issuers must pass to impose an NQTL in a classification. To qualify, an NQTL:
Health plan fiduciary issues have taken on increased urgency following a new wave of Employee Retirement Income Security Act class action lawsuits filed by plaintiffs’ firms. Sarah Raaii and Alden Bianchi recently joined the Moving to Value Alliance, a healthcare nonprofit, for a podcast episode focused on how group health plan sponsors and third-party service providers to group health plans can comply with the new fiduciary requirements enacted under the Consolidated Appropriations Act of 2021 (CAA). They also discussed what health plan fiduciaries can do to ensure they fulfill their responsibilities to beneficiaries.
One year on from the end of the COVID-19 public health emergency, the Medicare restrictions on telehealth that Congress waived to allow for and expand the use of telehealth and other forms of virtual care are set to expire. Congress has already acted twice to extend the waivers, most recently in the Consolidated Appropriations Act, 2023, which extended them until the end of this calendar year. Thus, starting on January 1, 2025, these waivers will disappear without further Congressional action. The uncertainty about whether Congress will again extend the telehealth waivers (and for how long) will create numerous questions and cause confusion for health plans, patients and providers.
To adapt to the evolving healthcare landscape, health systems are seeking to identify alternatives to their traditional hospital-centric models and shift towards patient-centered care delivery. As a result, provider-sponsored health plans (PSHPs) are gaining traction as a potential framework for health systems to curate care delivery in the newly decentralized model of healthcare.
In this article, Brad Dennis and Gary Scott Davis explore the challenges facing the hospital-centric model, the reemergence of PSHPs and the advantages of integrating healthcare delivery and insurance functions in a PSHP-based model.
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