On August 12, 2024, the Biden administration launched a new “Time Is Money” initiative, seeking to crack down on time-consuming and burdensome business processes.
The initiative includes a requirement for federal employee health plans to provide an online opportunity to submit claims. It also features an accompanying letter to health insurance CEOs from the heads of the US Department of Health and Human Services and US Department of Labor that challenges the CEOS to offer online claim submissions, deny claims only where appropriate, and provide clear steps to appeal decisions.
In a consequential decision for Health Insurance Portability and Accountability Act (HIPAA)-regulated entities, on June 20, 2024, the US District Court for the Northern District of Texas ruled that the US Department of Health and Human Services Office for Civil Rights exceeded its authority in certain respects in sub-regulatory guidance. The guidance concerned HIPAA’s application to cookies and other online tracking technologies on HIPAA-regulated entities’ unauthenticated webpages.
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 [...]
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.
Application of the Quantitative Testing Requirements to NQTLs
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.
Mental Health Carve-Out Vendors
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:
Must be no more restrictive when applied to MH/SUD benefits as compared to M/S benefits;
The plan or issuer must meet specified design and application requirements; and
The plan or issuer must collect, evaluate and consider the impact of relevant data on [...]
On April 26, 2024, the US Department of Health and Human Services (HHS) issued a final rule (press release, fact sheet, FAQs) reinterpreting Section 1557 of the Affordable Care Act, which prohibits discrimination on the basis of race, color, national origin, sex, age or disability, or any combination thereof, in a health program or activity, any part of which is receiving federal financial assistance. The rule, which has staggered effectivity dates starting on July 5, 2024, largely finalizes the policies as proposed in HHS’s August 2022 Notice of Proposed Rulemaking, including clarifying protections for gender-affirming care, as provided by group health plans, carriers and third-party administrators under administrative-services-only (ASO) arrangements.
On March 18, 2024, the US Department of Health and Human Services Office for Civil Rights (OCR) issued an update to its December 1, 2022, bulletin titled “Use of Online Tracking Technologies by HIPAA Covered Entities and Business Associates.” In releasing the 2024 update, OCR stated that its purpose was to “increase clarity for regulated entities and the public.” While the update appears to narrow the scope of what OCR considers to be HIPAA-protected health information (PHI) in the context of online tracking technologies, it largely reconfirms prior guidance in the 2022 bulletin and will likely have limited practical impact for HIPAA-covered entities and business associates that have already heeded the 2022 bulletin.
During this election year, McDermottPlus is actively monitoring annual regulations that federal agencies are expected to release, as well as “ad hoc” regulations that will be released at the discretion of federal agencies.
This chart displays health-related regulations that may be issued this year, organized by federal agency and date of potential release.
The US Department of Health and Human Services Office for Civil Rights (OCR) recently reached a $4.75 million settlement with a New York City hospital for alleged violations of the Health Insurance Portability and Accountability Act (HIPAA).
According to OCR, in 2013, a former hospital employee sold the electronically protected medical records of 12,517 patients to an identity theft group, and the NYC hospital did not detect or report the breach to OCR until 2015. OCR’s investigation found several potential HIPAA violations, and in addition to the settlement, the hospital agreed to conduct a thorough security risk assessment, revise HIPAA policies, provide additional training to staff, begin recording and tracking all electronic health record (EHR) activity to monitor who is accessing patient information, and create a risk management plan. OCR will also monitor the hospital for two years for compliance with HIPAA.
On January 11, 2024, the US Department of Health and Human Services (HHS) published its new final rule governing federal healthcare conscience protection statutes. The 2024 final rule, which went into effect March 11, 2024, repeals the majority of the prior final rule from 2019 that was found to be unlawful by three federal courts and reverts to the 2011 framework created by the Obama administration to address rights of conscience.
The US Department of Health and Human Services and the US Department of Justice recently published new proposed rules that update and create various requirements under Section 504 of the Rehabilitation Act of 1973 and Title II of the Americans with Disabilities Act of 1990. What are some of the biggest changes?
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