US Department of the Treasury
Subscribe to US Department of the Treasury's Posts

The MHPAEA Proposed Rule: ‘Meaningful Benefits’ and the ‘Scope of Services’

This post continues our consideration of comments submitted in response to proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA). Our previous MHPAEA content is available here.

Under current law, if a plan provides any mental health or substance use disorder (MH/SUD) benefits in any classification of benefits, benefits for that condition or use disorder must be provided in every classification in which medical/surgical (M/S) benefits are provided. Classifications for this purpose include inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs. The proposed regulations modify this standard by providing that a plan does not provide benefits for MH/SUD benefits in every classification in which M/S benefits are provided unless the plan provides meaningful benefits for treatment for the condition or disorder in each such classification “as determined in comparison to the benefits provided for medical/surgical conditions in the classification.”

The term “meaningful benefits” is nowhere defined. The regulators nevertheless “recognize that the proposal to require meaningful benefits [ ] is related to scope of services.” “Scope of services” for this purpose generally refers to the types of treatments and treatment settings that are covered by a group health plan or health insurance issuer. The preamble to the proposed regulation invites comments on how the meaningful benefits requirement “would interact with the approach related to scope of services adopted under the 2013 final regulations.” The preamble of the 2013 final regulations addressed an issue characterized as ‘‘scope of services’’ or ‘‘continuum of care’’ but otherwise failed to provide any substance. Two examples from the proposed regulations do, however, give us a sense of what the regulators have in mind.

  • A plan that generally covers treatment for autism spectrum disorder (ASD), a mental health condition, and covers outpatient, out-of-network developmental evaluations for ASD but excludes all other benefits for outpatient treatment for ASD, including applied behavior analysis (ABA) therapy, when provided on an out-of-network basis. (ABA therapy is one of the primary treatments for ASD in children.) The plan generally covers the full range of outpatient treatments and treatment settings for M/S conditions and procedures when provided on an out-of-network basis. The plan in this example violates the applicable parity standards.
  • In another example, a plan generally covers diagnosis and treatment for eating disorders, a mental health condition, but specifically excludes coverage for nutrition counseling to treat eating disorders, including in the outpatient, in-network classification. Nutrition counseling is one of the primary treatments for eating disorders. The plan generally provides benefits for the primary treatments for medical conditions and surgical procedures in the outpatient, in-network classification. The exclusion of coverage for nutrition counseling for eating disorders results in the plan failing to provide meaningful benefits for the treatment of eating disorders in the outpatient, in-network classification, as determined in comparison to the benefits provided for M/S conditions in the classification. Therefore, the plan violates the proposed rules.

Notably, the newly proposed meaningful benefits requirement is separate from, [...]

Continue Reading

read more

The MHPAEA Proposed Rule: Standards of Care and Medical Necessity

Comments submitted in response to the proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) reflect a broad range of perspectives. Our previous MHPAEA content is available here.

A nontrivial subset of the comments single out a particular nonqualified treatment limitation (NQTL) for special treatment or scrutiny. An example of this trend is found in an October 16, 2023, comment letter submitted by the Legal Action Center. The letter asks the US Departments of Labor, Health and Human Services, and the Treasury (the Departments) to address the rule’s treatment of medical standards of care and medical necessity.

Under the 2013 final MHPAEA regulations, a plan or issuer may not impose an NQTL with respect to mental health/substance use disorder (MH/SUD) benefits in any classification unless the processes, strategies, evidentiary standards or other factors used in applying the NQTL in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards or other factors used in applying the limitation with respect to medical/surgical (M/S) benefits. (Classifications for this purpose include inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; emergency care; and prescription drugs.)

The proposed regulation defines “strategies” as “practices, methods, or internal metrics that a plan or issuer considers, reviews, or uses to design an NQTL.” Compliance with and deviations from generally accepted standards of care are cited as examples. Strategies for this purpose include “the development of the clinical rationale used in approving or denying benefits,” which is the central purpose of medical necessity determinations.

Medical necessity criteria are considered NQTLs because the criteria have the capacity to limit a patient’s access to or duration of MH/SUD treatment that are not based on the frequency of treatment, number of visits, days of coverage or days in a waiting period (the latter are quantitative treatment limitations). The Legal Action Center claims that plans sometimes develop their own criteria for determining medical necessity for MH/SUD treatment or use criteria developed by nonprofit clinical specialty associations or industry entities, despite the law’s admonition that plans must treat the two comparably. Concerned that under the proposed regulation plans retain significant discretion to adopt overly restrictive medical necessity criteria, the Legal Action Center asks the Departments to revise the definition of “strategies” to include a definition of “generally accepted standards of care” that is tied to criteria and guidelines from the nonprofit clinical association for the relevant specialty.

One way to determine the quality of a medical necessity definition is to look at claims data, which offer a useful test of parity compliance. Current law does not require parity of outcomes, but the proposed regulation does. The proposed rule would require that plans collect and evaluate outcomes data for the express purpose of assessing the impact of the NQTL on access to MH/SUD benefits. Material differences in outcomes are viewed as a strong indicator of noncompliance. (For the network composition NQTL, a material difference in outcomes data [...]

Continue Reading

read more

The Proposed MHPAEA Regulations: A Comment on the Comments

In our last post, we considered some of the comment letters submitted in response to proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) issued by the US Departments of Labor, Health and Human Services and the Treasury (the Departments). Our previous MHPAEA content is available here.

The comment period for the proposed regulations closed on October 17, 2023. Stakeholders submitted more than 7,500 comments. While we have not read them all, we’ve seen enough to discern the broad contours. There are those in favor, those opposed and those that take some middle ground with recommended modifications. Among the latter, the modifications run the gamut from trivial to substantive. One particular comment generally approving of the rule but urging modifications caught our attention. It was submitted by the Brookings Institution, and it offered the following (at least in our view) useful insights.

Heterogeneity of Mental Health/Substance Use Disorder (MH/SUD) Benefits Versus Medical/Surgical (M/S) Benefits

The comment explains that roughly 41% of M/S visits are for chronic conditions, which are less likely to be subject to concurrent review. In contrast, between 64% and 69% of MH/SUD visits focus on treatment of mood disorders, anxiety disorders, psychoses and personality disorders, i.e., chronic recurring conditions. The comment notes: “Even if all chronic visits in general medical practice were subject to concurrent review, any concurrent review for mental health or substance use disorder services would fail the ‘substantially all’ test.” (Emphasis added)

The comment recommends that the Departments consider a more fine-grained method of comparing the use of nonquantitative treatment limitations (NQTLs) between MH/SUD benefits and those for M/S benefits.

Schematic Representation of NQTLs (and Why This Matters)

The comment expresses concern over the depth of the analysis that is required for each NQTL. Page four provides a useful schematic that fleshes out the particulars. The schematic makes the point that a substantial amount of effort is involved in demonstrating compliance for a single NQTL. The steps include “identifying which services apply [ ], identifying factors considered in the design of the NQTL, identifying sources used to define these factors, and demonstrating that the NQTL is applied no more stringently to mental health and substance use disorder benefits than medical/surgical benefits.”

Moreover, all steps must be repeated for each additional NQTL. While even a casual review of the proposal would lead the reader with the sense that compliance would be a challenge, the use of the visual schematic drives the point home visually.

The Exception for Independent Professional Medical or Clinical Standards

The proposed rule identifies two exceptions to the NQTL requirements, the first of which is based on “Independent Professional Medical or Clinical Standards.” While there is a good deal of disagreement as to its proper scope and even its utility, the Brookings comment worries that “the language in the proposed rule also opens the door to regulatory gaming because it is overly broad.” According to the comment: “If the [...]

Continue Reading

read more

Forfeitures: Changing the Rules of the Game for Retirement Plans

The US Department of the Treasury and the Internal Revenue Service recently issued proposed regulations on the use of forfeitures by tax-qualified retirement plans. The proposed changes provide welcome clarity for plan sponsors but may require revisions to plan administration and legal plan documents.

Read more here.

read more

Treasury, DOL and HHS Issue Landmark Mental Health Parity Proposed Rule

The US Departments of the Treasury, Labor, and Health and Human Services (the Departments) recently issued much-anticipated proposed regulations under the Mental Health Parity and Addiction Equity Act (MHPAEA) to better ensure that health plans allow access to mental health or substance use disorder benefits as easily as medical or surgical benefits. The proposed regulations reiterate the Departments’ focus on mental health parity and underscore the importance of compliance for health plan sponsors. They also come after many plans have been subject to audit by the Departments which focused heavily on MHPAEA compliance, leaving plan sponsors frustrated at the lack of guidance and inconsistent application of MHPAEA.

Read more here.

read more

Agencies Issue FAQs on Surprise Billing and Cost-Sharing Rules Coordination

A recent article by the Kaiser Family Foundation (KFF) and National Public Radio (NPR) raised the prospect that patients may still see surprise medical bills despite the enactment of the No Surprises Act (NSA).

The article, entitled A Surprise-Billing Law Loophole? Her Pregnancy Led to a Six-Figure Hospital Bill, reports the story of a woman who was admitted for an extended inpatient hospital stay and follow-up postpartum procedure after experiencing a serious pregnancy complication. According to the article, the plan initially determined that the hospital was a nonparticipating provider, but the specialty clinic at which she was treated was in the carrier’s network. (The clinic’s doctors admitted patients only to the nonparticipating provider hospital.) The result was some $135,000 in uncovered expenses.

There are two relevant statutory provisions at play here:

  • The NSA provides protections against surprise medical bills for, among other things, nonemergency services furnished by nonparticipating providers with respect to a visit to a participating healthcare facility.
  • The Affordable Care Act (ACA) imposes limits on annual cost sharing, which includes deductibles, coinsurance, copayments or similar charges. Cost sharing does not, however, include balance billing amounts for non-network providers.

A great deal is riding on whether facilities and providers are participating or nonparticipating for NSA purposes, and whether providers are in or out of network for ACA purposes. If it is possible for a nonparticipating facility to have a participating provider, then there would seem to be a gap in the NSA’s protections. In the government’s view, this is not possible, so there is no gap.

The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) weighed in on the issue in Q&As 1 and 2 of recently issued FAQs Part 60. According to the Departments, either:

  1. The balance billing and cost-sharing protections under the NSA will apply because the items and services are furnished by a nonparticipating provider, emergency facility or provider of air ambulance services; or
  2. The ACA limits will apply because the items or services are furnished by an in-network provider or provider of air ambulance services.

Under no circumstance, however, can a facility be a “participating” provider for NSA purposes and at the same time claim that they are not subject to the ACA out-or-pocket limits on in-network cost sharing.

The KFF/NPR article does not report the details about the underlying contractual arrangements. This might have been a health maintenance organization or other network-related plan, for example. The article does report that the balance bill was reversed, although no rationale is provided. The lesson here, according to the Departments, is that a plan or carrier cannot be in network for one purpose and out of network for other purposes to evade the surprise billing rules.

read more

Fixing the ACA’s Family Glitch

The “family glitch” was a regulatory oddity of the Affordable Care Act (ACA). It required the affordability of an employer-sponsored health plan to be determined based solely on the cost of the plan to an individual employee, disregarding the costs to add family members to a plan. This resulted in many families being ineligible for marketplace premium subsidies when purchasing their own health insurance on exchanges. In October 2022, the US Department of the Treasury and Internal Revenue Service (IRS) issued a final rule designed to fix the “family glitch.”

In this Bloomberg Law article, Alden Bianchi and Teal Trujillo examine the rationale advanced by the IRS in support of its changed position in the matter of the “family glitch” and consider how the new position of the IRS might fare if challenged in the wake of West Virginia v. EPA.

Read the article.

Copyright 2023 Bloomberg Industry Group, Inc. (800-372-1033) Reproduced with permission.

read more

District Court Vacates Provisions of No Surprises Act Final Rule

On February 6, a US district court in Texas vacated provisions of the No Surprises Act final rule related to the independent dispute resolution (IDR) process for determining payment for out-of-network services.

The district court granted summary judgment to the Texas Medical Association, which had brought suit against the US Departments of Health and Human Services (HHS), Labor and the Treasury over the IDR process. The district court held that provisions of the final rule were contrary to law and therefore in violation of the Administrative Procedure Act. The order vacated the provisions of the final rule that require IDR entities to look at the qualifying payment amount first and consider other factors only if those other factors are not already accounted for in the qualifying payment amount.

The departments have not yet filed a notice of appeal or amended their sub-regulatory guidance to align with the district court’s order.

read more

Departments Issue Final Rule Implementing Certain No Surprises Act Provisions

On August 19, 2022, the US Departments of Health and Human Services (HHS), Labor and Treasury posted a final rule revising portions of the federal No Surprises Act (NSA). Generally, the rule finalizes three aspects of the two-part interim final rule that the Departments published along with the Office of Personnel Management in 2021. First, the final rule expands the information about the qualifying payment amount (QPA) that plans and issuers (collectively, payers) must disclose to providers and facilities (collectively, providers). Second, it reinterprets the provisions of the NSA that govern the determination of the appropriate out-of-network rate through the federal independent dispute resolution (IDR) process, and prescribes how certified IDR entities are to weigh the QPA and other considerations when selecting one of the parties’ offers. The certified IDR entity must now consider the QPA first, and then give weight to other considerations only if those other considerations are not accounted for in the QPA. Third, the final rule expands the information that a certified IDR entity must provide in its written payment determination to include a statement explaining why the QPA did not already account for other considerations weighed by the IDR entity.

Read more here.

read more




Top ranked chambers 2022
US leading firm 2022