mental health and substance use disorder benefits Archives

Lessons from Ryan S. v. UnitedHealth Group for the 2023 MHPAEA Proposed Rule

by Alden Bianchi | Apr 18, 2024 | Employee Benefits, Health and Welfare Plans, Mental Health Parity and Addiction Equity Act

A recently decided US Court of Appeals for the Ninth Circuit case, Ryan S. v. UnitedHealth Group, Inc., offers some useful insights on the enforcement by private litigants of the Mental Health Parity and Addiction Equity Act (MHPAEA). Like other similar cases, the case invites questions about the impact of potential changes under the proposed regulations issued under MHPAEA last year. Despite that the issues at this stage are procedural, the case nevertheless offers some useful insights, which this post explores.

Our previous MHPAEA content is available here.

According to the complaint, the group health plan under which Ryan S. was covered was administered by UnitedHealthcare. The plan covered outpatient, out-of-network mental health and substance use disorder (MH/SUD) benefits at 70% of covered charges and at 100% once the out-of-pocket maximum was met.

Ryan S. completed two different outpatient, out-of-network substance use disorder programs, coverage for which was denied on multiple occasion and for disparate reasons. As the complaint explains, the denials resulted from UnitedHealthcare’s use of an algorithm that assessed patients’ progress and referred cases for additional review. This additional layer of review was not applied to outpatient, out-of-network medical/surgical (M/S) claims. Ryan S. alleges that UnitedHealthcare applied a more stringent review process to benefits claims for outpatient, out-of-network MH/SUD treatment than to otherwise comparable M/S treatment. The complaint states this disparity in applicable review standards violates:

MHPAEA
The Employee Retirement Income Security Act (ERISA) fiduciary rules
The failure to follow the terms of the plan as required by ERISA

The Disposition of the Plaintiffs’ Claims

The district court had dismissed all the claims. The Ninth Circuit reversed on MHPAEA and ERISA fiduciary claims but let stand the district court’s dismissal of the claim related to plan terms.

MHPAEA requires that any limitations on “mental health or substance use disorder benefits” in an ERISA plan be “no more restrictive than the predominant treatment limitations applied to substantially all [covered] medical and surgical benefits.” Thus, said the court, to succeed, a plaintiff must show an ERISA plan that offers both M/S and MH/SUD benefits imposed a more restrictive limitation on MH/SUD treatment than limitations on treatment for M/S issues. The court then identified three situations in which such a violation might occur:

Facial exclusion cases: A plaintiff can allege that a plan contains an exclusion that is discriminatory on its face.
“As-applied” cases: A plaintiff can allege that a plan contains a facially neutral term that is discriminatorily applied to MH/SUD treatment.
Internal process cases: A plaintiff can allege that a plan administrator applies an improper internal process that results in the exclusion of an MH/SUD treatment.

In the court’s view, the complaint raises internal process claims. As such, violations cannot be discerned with reference to the plan document. The court therefore saw no reason to disturb the district court’s dismissal of the claim relating to plan terms.

With respect to the MHPAEA and ERISA fiduciary claims, [...]

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The ‘Data Evaluation Requirement’ for NQTLs Under the Newly Proposed MHPAEA Regulations

by Alden Bianchi | Sep 7, 2023 | Employee Benefits, Health and Welfare Plans, Mental Health Parity and Addiction Equity Act

Last week’s post examined the “no more restrictive” requirement that would apply to non-quantitative treatment limitations (NQTLs) set out in recently proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA). (Our description of the proposed regulations is available here.) The proposed regulations deal principally with NQTLs, which are non-numeric benefit coverage limits that must be no more restrictive for mental health and substance use disorder (MH/SUD) benefits than for medical surgical (M/S) benefits. We previously claimed that “if adopted in final form [the proposed regulations] would vastly complicate compliance by group health plans and health insurance issuers with an already challenging set of mental health parity rules.” Our views have not changed.

The proposed regulations would, if adopted, impose a series of new requirements on NQTLs that include a “data evaluation requirement.” This new requirement would provide that the plan or issuer designing and applying an NQTL collect and evaluate relevant data to assess the impact of the NQTL on access to MH/SUD and M/S benefits. The plan or issuer would also consider whether the NQTL, in operation, complies with the mental health parity rules. The specific type, form, and manner of data collection and evaluation will be the subject of future guidance. (A technical release accompanied the proposed regulations, described here, which invites comment and suggests a possible, narrow safe harbor.)

The proposed regulations establish two new network-related rules governing NQTLs:

For NQTLs not involving network composition, a material difference in the metrics/data gathering for the NQTL as applied to MH/SUD and M/S benefits would be considered a strong indicator of a violation.
For NQTLs involving network composition, a violation is deemed to occur if the relevant data shows material differences in access to in-network MH/SUD benefits as compared to in-network M/S benefits.

The proposed regulations would make compliance depend on outcomes. This position represents a significant shift in, if not an outright reversal of, existing law. Under the 2013 final MHPAEA regulations, outcomes are not determinative of compliance. Rather, comparability turns on the application of processes, strategies, evidentiary standards and other design-based factors. Compliance under current law thus turns on an examination of inputs, not outcomes. While the proposed regulations include exceptions for professional medical/clinical standards and for standards to detect fraud, waste and abuse, the preamble to the proposed regulations advises that “these exceptions should be narrowly tailored.”

The ‘No More Restrictive’ Requirement for NQTLs Under the Proposed MHPAEA Regulations

by Alden Bianchi | Aug 29, 2023 | Employee Benefits, Health and Welfare Plans, Mental Health Parity and Addiction Equity Act

We previously reported on proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA). If adopted in final form, these regulations would vastly complicate compliance by group health plans and health insurance issuers with an already challenging set of mental health parity rules.

The proposed regulations deal principally with non-quantitative treatment limitations (NQTLs), i.e., non-numeric benefit coverage limits that must be no more restrictive for mental health and substance use disorder (MH/SUD) benefits than for medical surgical (M/S) benefits. Examples of NQTLs include prior authorization requirements, concurrent review, standards for provider admission, Rx formulary design, and fail-first policies or step therapy protocols.

The proposed regulations set out new requirements on NQTLs that include a three-part test consisting of a “no more restrictive” requirement, a “design and application” requirement and a “data evaluation requirement.” There is also a new meaningful benefit requirement, under which plans and issuers must provide meaningful benefits for MH/SUD treatment where the plan also provides a corresponding M/S benefit. With perhaps the exception of the “design and application” requirement, each of these requirements represents a major new compliance obligation on the part of plans and issuers.

This blog post focuses on the “no more restrictive” requirement. Future posts will examine the other requirements.

MHPAEA regulates aggregate lifetime and annual dollar limits, financial requirements, and treatment limitations. (The Affordable Care Act bars lifetime and annual dollar limits on essential health benefits (EHBs). Under MHPAEA, plans and issuers may not be able to impose lifetime and annual dollar limits on MH/SUD benefits that are not EHBs.) Treatment limitations are subdivided into quantitative treatment limitations (QTLs) (e.g., number of days or visits covered) and NQTLs.

The 2013 final MHPAEA regulations apply numerical standards testing to financial requirements and QTLs. These final regulations also adopted six classifications of benefits for this purpose: inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs. To comply, a financial requirement or QTL imposed on an MH/SUD benefit must be no more restrictive than the predominant financial requirement or QTL that applies to substantially all M/S benefits in a classification. For this purpose:

Substantially all” means that the financial limitation or QTL applies to at least two-thirds of all M/S benefits in the classification; and
“Predominant” means the level of financial requirement or QTL that applies to more than one-half of the M/S benefits in the relevant classification.

The 2013 final regulations largely rely on a subjective analysis of the processes, strategies, evidentiary standards, and other factors used in the application of NQTLs. The proposed regulations retain this subjective standard and layer on a quantitative “no more restrictive” requirement. As proposed, NQTLs would be subject to numerical standards testing similar to the current law testing that applies to financial requirements and NQTLs. While the “substantially all” prong would not change, some minor modifications would be made to the “predominant” prong. Under the proposed regulations, when testing NQTLs, the term “predominant” [...]

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