[Federal Register Volume 62, Number 123 (Thursday, June 26, 1997)]
[Proposed Rules]
[Pages 34604-34606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16770]



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Part VII

Department of Labor
Pension and Welfare Benefits Administration



29 CFR Chapter XXV

Department of Health and Human Services
Health Care Financing Administration



45 CFR Subtitle A, Subchapter B



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Mental Health Parity and Newborns' and Mothers' Health Protection; 
Proposed Rule

  Federal Register / Vol. 62, No. 123 / Thursday, June 26, 1997 / 
Proposed Rules  

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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

29 CFR Chapter XXV

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

45 CFR Subtitle A, Subchapter B


Mental Health Parity and Newborns' and Mothers' Health Protection

AGENCIES: Pension and Welfare Benefits Administration, Department of 
Labor; and Health Care Financing Administration, Department of Health 
and Human Services.

ACTION: Solicitation of comments.

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SUMMARY: This document is a request for comments regarding issues under 
the Mental Health Parity Act of 1996 (MHPA) and the Newborns' and 
Mothers' Health Protection Act of 1996 (NMHPA). The Department of Labor 
and the Department of Health and Human Services (collectively, the 
Departments) have received comments from the public on a number of 
issues arising under both MHPA and NMHPA. Further comments from the 
public are welcome.

DATES: The Departments have requested that comments be submitted on or 
before July 28, 1997.

ADDRESSES: Written comments should be submitted with a signed original 
and 2 copies to the Pension Welfare Benefits Administration (PWBA) at 
the address specified below. PWBA will provide copies to the Department 
of Health and Human Services for its consideration. All comments will 
be available for public inspection and copying in their entirety. 
Comments should be sent to: Office of Regulations and Interpretations, 
Pension and Welfare Benefits Administration, Room N-5669, U.S. 
Department of Labor, 200 Constitution Ave., NW., Washington, DC 20210, 
Attn: MHPA/NMHPA Solicitation of Comments.
    All comments received will be available for public inspection at 
the Public Disclosure Room, Pension and Welfare Benefits 
Administration, U.S. Department of Labor, Room N-5507, 200 Constitution 
Ave., NW., Washington, DC 20210. Comments received timely will also be 
available for public inspection as they are received, generally 
beginning approximately 3 weeks after publication of a document, in 
Room 309-G of the Department of Health and Human Services offices at 
200 Independence Avenue, SW., Washington, DC, on Monday through Friday 
of each week from 8:30 a.m. to 5 p.m. (phone (202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Amy Scheingold, Department of Labor, 
Pension and Welfare Benefits Administration, at 202-219-4377 (not a 
toll-free number); or Therese Klitenic, Health Care Financing 
Administration, at 410-786-5942 for inquiries regarding MHPA, or 
Suzanne Long, Health Care Financing Administration, at 410-786-0970 for 
inquiries regarding NMHPA (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

Mental Health Parity Act of 1996

    The Mental Health Parity Act of 1996 (MHPA or the Act) was enacted 
on September 26, 1996 (Pub. L. 104-204). MHPA amended the Public Health 
Service Act (PHSA) and the Employee Retirement Income Security Act of 
1974, as amended, (ERISA) to provide for parity in the application of 
limits on certain mental health benefits with limits on medical and 
surgical benefits. Health coverage is regulated in part by the federal 
government, under the PHSA and ERISA, and other federal provisions 
including the Internal Revenue Code (Code), and in part by the States.
    MHPA provisions are set forth in Title XXVII of the PHSA and Part 7 
of Subtitle B of Title I of ERISA. These provisions are not currently 
contained in the Code. However, the Conference Report states Congress's 
intention to make conforming changes to the Code as soon as possible in 
order to implement these provisions under the Code. MHPA provisions are 
intended to provide parity of mental health benefits with medical and 
surgical benefits under a group health plan in the application of 
aggregate dollar lifetime limits and annual dollar limits. A plan 
providing both medical and surgical benefits and mental health benefits 
may not impose an aggregate lifetime expenditure limit or annual 
expenditure limit (as dollars) on mental health benefits if it does not 
impose such a limit on substantially all of the medical and surgical 
benefits.
    If a group health plan does impose an aggregate lifetime limit or 
annual limit on medical and surgical benefits, the plan cannot impose 
any such limit on mental health benefits that is less than that on the 
medical and surgical benefits. In the case of a plan that has different 
aggregate lifetime limits, or annual limits, on different categories of 
medical and surgical benefits, the Departments shall establish rules to 
calculate an average aggregate lifetime limit, or annual limit, for 
mental health benefits that is computed taking into account the 
weighted average of the limits applicable to the different categories.
    MHPA does not require a plan or coverage to provide any mental 
health benefits. Further, MHPA provides that nothing in the Act shall 
be construed as affecting the terms or conditions (including cost 
sharing, limits on numbers of visits or days of coverage, and 
requirements relating to medical necessity) relating to the amount, 
duration or scope of mental health benefits under such plans or 
coverage, except as specifically provided regarding parity in the 
imposition of aggregate lifetime limits and annual limits for mental 
health benefits. MHPA requirements do not apply to benefits for 
substance abuse or chemical dependency.
    MHPA also provides two exemptions from its parity requirements. The 
first exemption is for small employers (defined as an employer who 
employed an average of at least 2 but not more than 50 employees on 
business days during the preceding calendar year and who employs at 
least 2 employees on the first day of the plan year). The second 
exemption is for group health plans if the application of these 
provisions results in an increase in the cost under the plan or 
coverage of at least one percent.
    MHPA provisions are effective for plan years beginning on or after 
January 1, 1998. The Act includes a sunset provision under which MHPA 
requirements do not apply to benefits for services furnished on or 
after September 30, 2001. Accordingly, the Departments are working 
actively to develop and promulgate the necessary regulations prior to 
the effective date of the MHPA provisions.

Newborns' and Mothers' Health Protection Act of 1996

    The Newborns' and Mothers' Health Protection Act of 1996 (NMHPA) 
was enacted on September 26, 1996 (Pub. L. 104-204). NMHPA amended the 
PHSA and ERISA to provide protection for mothers and their newborn 
children with regard to the length of hospital stays following the 
birth of a child. NMHPA applies to health coverage offered in the large 
and small group markets, and the individual market.
    NMHPA provisions are set forth in Title XXVII of the PHSA and Part 
7 of Subtitle B of Title I of ERISA. NMHPA provisions are not currently 
contained in the Code. These provisions include new rules relating to 
the minimum time period a mother and a newborn child can spend in the 
hospital in connection

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with the birth of a child. Under NMHPA, group health plans, insurance 
companies, and health maintenance organizations (HMOs) offering health 
coverage for hospital stays in connection with the birth of a child 
must provide health coverage for a minimum period of time. For example, 
NMHPA provides that coverage for a hospital stay following a normal 
vaginal delivery generally may not be limited to less than 48 hours for 
each the mother and the newborn child. Health coverage for a hospital 
stay in connection with childbirth following a caesarean section 
generally may not be limited to less than 96 hours for the mother and 
the newborn child.
    NMHPA's requirements only apply to group health plans, insurance 
companies, and HMOs that choose to provide insurance coverage for a 
hospital stay in connection with childbirth. NMHPA does not require 
such entities to provide coverage for hospital stays in connection with 
the birth of a child. In addition, NMHPA does not prevent a group 
health plan, insurance company, or HMO from imposing deductibles, 
coinsurance, or other cost-sharing measures for health benefits 
relating to hospital stays in connection with childbirth as long as 
such cost-sharing measures are not greater than those imposed on any 
preceding portion of a hospital stay.
    NMHPA prohibits certain compensation arrangements. Specifically, 
NMHPA prohibits a group health plan, insurance company, or HMO from 
providing monetary payments or rebates to mothers to encourage such 
mothers to accept less than the minimum protections under the law; 
prohibits penalizing or otherwise reducing or limiting the 
reimbursement of an attending provider because such provider provided 
care to an individual participant or beneficiary in accordance with the 
law; and prohibits providing incentives (monetary or otherwise) to an 
attending provider to induce such provider to provide care to an 
individual participant or beneficiary in a manner inconsistent with the 
law.
    The requirements under NMHPA apply to plans and issuers in the 
group market for plan years beginning on or after January 1, 1998. For 
issuers in the individual market, the requirements apply with respect 
to health insurance coverage offered, sold, issued, renewed, in effect, 
or operated in the individual market on or after January 1, 1998. 
Accordingly, the Departments are working actively to develop and 
promulgate the necessary regulations prior to the effective date of the 
NMHPA provisions.

Economic Analysis/Paperwork Reduction Act Information/Regulatory 
Flexibility Act Information

    Analysis under Executive Order 12866 requires that the Departments 
quantify the costs and benefits of the proposed regulations and the 
alternatives considered using the guidance provided by the Office of 
Management and Budget (OMB). These costs and benefits are not limited 
to the Federal government, but pertain to the nation as a whole.
    The Departments' analysis under the Regulatory Flexibility Act will 
need to include, among other things, an estimate of the number of small 
entities subject to the regulations (for this purpose, plans, 
employers, and issuers and, in some contexts small governmental 
entities), the expense of the reporting and other compliance 
requirements (including the expense of using professional expertise), 
and a description of regulatory alternatives that minimize impact on 
small entities yet achieve the regulatory purpose.
    Paperwork Reduction Act analysis requires that the Departments 
estimate how many ``respondents'' will be required to comply with the 
``collection of information'' aspects of the regulations and how much 
time and cost will be incurred as a result. A collection of information 
includes record-keeping, reporting to governmental agencies, and third-
party disclosures, such as the certification process.
    The Departments are requesting comments that may contribute to the 
impact analysis that will be performed pursuant to the above mentioned 
requirements.

Comments

    Comments have been received from the public on a number of issues 
arising under MHPA and NMHPA. The purpose of this announcement is to 
advise the public that further comments are welcome. In order to assist 
interested parties in responding, this solicitation of comments 
describes specific areas in which the Departments are particularly 
interested. The Departments, however, also request comments and 
suggestions concerning any area or issue pertinent to the assessment 
and development of regulatory guidance regarding MHPA and NMHPA. 
Comments should reference the appropriate question number to aid the 
Departments in analyzing submissions.

Specific Areas With Respect to MHPA in Which the Departments Are 
Interested Include the Following

    Group health plans are exempt from the provisions of MHPA if the 
application of its provisions results in an increase in the cost under 
the plan or coverage of at least one percent.
    With respect to this exemption:
    1(a)  Should the exemption be contingent on formal application and 
agency approval or some other less formal process such as record 
keeping and third party disclosure?
    1(b)  Whether the exemption process is formal or informal, what 
documentation should be required to support an exemption from MHPA and 
how should such documentation be subject to independent verification?
    1(c)  If the exemption process is not contingent on formal 
application and agency approval, what additional consumer protections 
should be developed as part of implementing the statute?
    2(a)  Should the exemption be available based on costs which are 
prospective, retrospective, or both?
    2(b)  If prospective, how should the costs be estimated?
    2(c)  If retrospective, how should costs be measured?
    2(d)  Should the added costs be calculated from the baseline of no 
mental health care coverage or current practice, where some coverage is 
offered but falls short of parity?
    3  Should the exemption determinations be made on an annual basis?
    In the case of a plan that has different aggregate lifetime limits, 
or annual limits, on different categories of medical and surgical 
benefits, MHPA requires the Departments to establish rules to calculate 
an average aggregate lifetime limit or annual limit for mental health 
benefits that is computed taking into account the weighted average of 
such limit applicable to the different categories. With regard to these 
provisions:
    4  How should the weighted average of the limits applicable to the 
different categories of medical and surgical benefits be computed?

Specific Areas With Respect to NMHPA in Which the Departments Are 
Interested Include the Following

    5  What compensation arrangements should be identified as 
inappropriate under NMHPA? Please provide specific examples of such 
arrangements.
    6  What issues or concerns should be taken into consideration for 
establishing how to measure 48 and 96 hours (e.g., when should the 48 
or 96 hours begin)?

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    7  What issues or concerns should be taken into consideration in 
defining ``attending provider''?
    8  What type of benefits should be considered ``in connection with 
a childbirth''?
    Specific Areas with Respect to the Departments' Responsibilities 
and Analysis Under Executive Order 12866, Paperwork Reduction Act, and 
Regulatory Flexibility Act in Which the Departments Are Interested 
Include:
    9  What amendments are plans likely to make in response to MHPA and 
NMHPA, including any amendments designed to offset compliance costs?
    10(a)  What will be the costs and benefits of compliance with the 
NMHPA and the MHPA?
    10(b)  How should these costs and benefits be defined?
    10(c)  How will these costs and benefits vary with size and other 
characteristics of plans?
    10(d)  Would differences in these costs and benefits by plan size 
or other characteristics suggest additional regulatory flexibility?
    11  To what extent are there already voluntary policies in the 
industry, and/or State or local mandates in place that meet or exceed 
the NMHPA and MHPA mandates?
    12(a)  What is the prevalence of mental health benefits among large 
and small plans?
    12(b)  Are these benefits typically provided separately from other 
health benefits?
    12(c)  Are mental health benefits self-insured and/or administered 
through third party administrators to a greater or lesser extent than 
other benefits?
    13  What proportion of sponsors of mental health benefits will be 
eligible for the one percent cost exemption? What types of plans are 
most likely to be eligible?
    14  How would costs and benefits of MHPA and NMHPA vary with 
alternative policies (including alternative interpretations of the MHPA 
one percent cost exemption)? What are the implications for access to 
mental health, maternity, or other categories of health insurance?
    15  As a measure of benefits, how many people may enjoy greater 
access to medically appropriate treatment by providing more equitable 
annual or lifetime limits for mental health coverage?
    All submitted comments will be made part of the record of the 
preceding referred to herein and will be available for public 
inspection.

    Signed at Washington, DC, this 23rd day of June 1997.
Olena Berg,
Assistant Secretary, Pension and Welfare Benefits Administration, 
Department of Labor.

Bruce Vladeck,
Administrator, Health Care Financing Administration, Department of 
Health and Human Services.
[FR Doc. 97-16770 Filed 6-25-97; 8:45 am]
BILLING CODE 4510-29-P; 4120-01-P