[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Proposed Rules]
[Pages 51552-51669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15945]



[[Page 51551]]

Vol. 88

Thursday,

No. 148

August 3, 2023

Part III





Department of the Treasury





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Internal Revenue Service





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26 CFR Part 54





Department of Labor





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Employee Benefits Security Administration





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29 CFR Part 2590





Department of Health and Human Services





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45 CFR Parts 146 and 147





Requirements Related to the Mental Health Parity and Addiction Equity 
Act; Proposed Rule

  Federal Register / Vol. 88 , No. 148 / Thursday, August 3, 2023 / 
Proposed Rules  

[[Page 51552]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[REG-120727-21]
RIN 1545-BQ29

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AC11

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 146 and 147

[CMS-9902-P]
RIN 0938-AU93


Requirements Related to the Mental Health Parity and Addiction 
Equity Act

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Proposed rules.

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SUMMARY: This document proposes amendments to regulations implementing 
the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction 
Equity Act of 2008 (MHPAEA) and proposes new regulations implementing 
the nonquantitative treatment limitation (NQTL) comparative analyses 
requirements under MHPAEA, as amended by the Consolidated 
Appropriations Act, 2021 (CAA, 2021). Specifically, these proposed 
rules would amend the existing NQTL standard to prevent plans and 
issuers from using NQTLs to place greater limits on access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits. As part of these changes, these proposed rules would 
require plans and issuers to collect and evaluate relevant data in a 
manner reasonably designed to assess the impact of NQTLs on access to 
mental health and substance use disorder benefits and medical/surgical 
benefits, and would set forth a special rule with regard to network 
composition. These proposed rules would also amend existing examples 
and add new examples on the application of the rules for NQTLs to 
clarify and illustrate the protections of MHPAEA. Additionally, these 
proposed rules would set forth the content requirements for NQTL 
comparative analyses and specify how plans and issuers must make these 
comparative analyses available to the Department of the Treasury 
(Treasury), the Department of Labor (DOL), and the Department of Health 
and Human Services (HHS) (collectively, the Departments), as well as to 
an applicable State authority, and participants, beneficiaries, and 
enrollees. The Departments also solicit comments on whether there are 
ways to improve the coverage of mental health and substance use 
disorder benefits through other provisions of Federal law. Finally, HHS 
proposes regulatory amendments to implement the sunset provision for 
self-funded, non-Federal governmental plan elections to opt out of 
compliance with MHPAEA, as adopted in the Consolidated Appropriations 
Act, 2023 (CAA, 2023).

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than October 2, 2023.

ADDRESSES: Written comments may be submitted to the address specified 
below. Any comment that is submitted will be shared with Treasury, 
Internal Revenue Service (IRS), and HHS. Please do not submit 
duplicates.
    Comments will be made available to the public. Warning: Do not 
include any personally identifiable information (such as name, address, 
or other contact information) or confidential business information that 
you do not want publicly disclosed. All comments are posted on the 
internet exactly as received and can be retrieved by most internet 
search engines. No deletions, modifications, or redactions will be made 
to the comments received, as they are public records. Comments may be 
submitted anonymously.
    In commenting, please refer to file code 1210-AC11. Because of 
staff and resource limitations, the Departments cannot accept comments 
by facsimile (FAX) transmission.
    Comments must be submitted in one of the following two ways (please 
choose only one of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By mail. You may mail written comments to the following address 
ONLY: Office of Health Plan Standards and Compliance Assistance, 
Employee Benefits Security Administration, Room N-5653, U.S. Department 
of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: 
1210-AC11.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. The comments are posted on 
the following website as soon as possible after they have been 
received: https://www.regulations.gov. Follow the search instructions 
on that website to view public comments.

FOR FURTHER INFORMATION CONTACT: Shira McKinlay, Internal Revenue 
Service, Department of the Treasury, at 202-317-5500; Beth Baum or 
David Sydlik, Employee Benefits Security Administration, Department of 
Labor, at 202-693-8335; David Mlawsky, Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, at 410-786-6851.
    Customer Service Information: Individuals interested in obtaining 
information from DOL concerning private employment-based health 
coverage laws may call the Employee Benefits Security Administration 
(EBSA) Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's 
website (www.dol.gov/agencies/ebsa).
    In addition, information from HHS on private health insurance 
coverage and coverage provided by self-funded, non-Federal governmental 
group health plans can be found on the Centers for Medicare & Medicaid 
Services (CMS) website (www.cms.gov/cciio), and information on health 
care reform can be found at www.Healthcare.gov or https://www.hhs.gov/healthcare/index.html. In addition, information about mental and 
behavioral health and addiction is available at https://www.samhsa.gov/mental-health and https://www.samhsa.gov/find-support.

SUPPLEMENTARY INFORMATION: 

I. Background

A. Introduction

    Mental health is essential to personal and societal wellbeing. 
America is experiencing a mental health and substance use disorder 
crisis \1\ that worsened during the COVID-19

[[Page 51553]]

pandemic.\2\ This crisis impacts both children and adults across 
various demographics nationwide and disproportionately affects 
marginalized and underserved communities. Recent data from the Centers 
for Disease Control and Prevention (CDC) indicate that, between August 
2020 and February 2021, the percentage of adults exhibiting symptoms of 
an anxiety or depressive disorder increased significantly, from 36.4 
percent to 41.5 percent.\3\
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    \1\ Department of Health and Human Services (2023). SAMHSA 
Announces National Survey on Drug Use and Health (NSDUH) Results 
Detailing Mental Illness and Substance Use Levels in 2021. Retrieved 
from https://www.hhs.gov/about/news/2023/01/04/samhsa-announces-national-survey-drug-use-health-results-detailing-mental-illness-substance-use-levels-2021.html.
    \2\ Vahratian, A., Blumberg, S.J., Terlizzi, E.P., Schiller, 
J.S. (2021). Symptoms of Anxiety or Depressive Disorder and Use of 
Mental Health Care Among Adults During the COVID-19 Pandemic--United 
States, August 2020-February 2021. MMWR Morb Mortal Wkly Rep 
2021;70:490-494. DOI: http://dx.doi.org/10.15585/mmwr.mm7013e2.
    \3\ Id.
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    Similarly, the overdose and substance use disorder epidemic has 
worsened in recent years. Overdose death numbers have risen 
substantially since 2015, reaching a then-historic high of 70,630 
deaths nationally in 2019 and growing to a reported value of 107,421 
overdose deaths in the 12-month period ending in July 2022.\4\ 
Additionally, from 1999 through 2019, the rate of drug overdose deaths 
increased from 4.0 per 100,000 to 19.6 in rural counties,\5\ and in 
2020, the age-adjusted rate of drug overdose deaths increased to 26.2 
per 100,000 in rural counties.\6\ The number of people who died from 
drug overdoses in 2021 increased by approximately 36,000 over the prior 
2 years.\7\ During the first year of the COVID-19 pandemic, the 
overdose death rates were highest for American Indians and Alaska 
Natives and Black or African Americans, exceeding the overdose death 
rate for White people by about 30 and 16 percent, respectively.\8\ 
While Hispanic and Latino people saw the lowest overdose death rates, 
those rates still increased in 2020.\9\
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    \4\ Hedegaard, H., Mini[ntilde]o, A.M., Wagner, M. (2020). Drug 
Overdose Deaths in the United States, 1999-2019. NCHS Data Brief No. 
304 (December 2020) https://www.cdc.gov/nchs/data/databriefs/db394-H.pdf; Centers for Disease Control and Prevention, National Center 
for Health Statistics. Vital Statistics Rapid Release: Provisional 
Drug Overdose Death Counts. Available at https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm. Accessed on July 14, 2023.
    \5\ Hedegaard H, Spencer MR. Urban-rural differences in drug 
overdose death rates, 1999-2019. NCHS Data Brief, no 403. 
Hyattsville, MD: National Center for Health Statistics. 2021. DOI: 
https://dx.doi.org/10.15620/cdc:102891.
    \6\ Spencer MR, Garnett MF, Mini[ntilde]o AM. Urban-rural 
differences in drug overdose death rates, 2020. NCHS Data Brief, no 
440. Hyattsville, MD: National Center for Health Statistics. 2022. 
DOI: https://dx.doi.org/10.15620/cdc:118601.
    \7\ National Vital Statistics System. Provisional Drug Overdose 
Death Counts. https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/202205.htm.
    \8\ Friedman, Joseph R, and Helena Hansen (2022). Research 
Letter: Evaluation of Increases in Drug Overdose Mortality Rates in 
the US by Race and Ethnicity Before and During the COVID-19 
Pandemic. JAMA Psychiatry. https://jamanetwork.com/journals/jamapsychiatry/fullarticle/2789697?utm_campaign=articlePDF&utm_medium=articlePDFlink&utm_source=articlePDF&utm_content=jamapsychiatry.2022.0004.
    \9\ Id.
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    As noted above, both children and adolescents are also impacted by 
this mental health and substance use disorder crisis. Prior to the 
COVID-19 public health emergency (PHE), millions of children ages 12 to 
17 reported experiencing at least one major depressive episode or 
severe major depression.\10\ Suicidal behavior among children has 
increased sharply; known suicide attempts by ingestion alone in 
children ages 10 to 12 increased by about 450 percent from 2010 to 
2020.\11\ Suicide rates among Black or African American children below 
age 13 increased rapidly from 2001 to 2015, and those children are 
nearly twice as likely to die by suicide than White children of the 
same age.\12\ Additionally, one survey, conducted from September 20 to 
December 31, 2021, notes that 45 percent of Lesbian, Gay, Bisexual, 
Transgender, and Queer (LGBTQ) youth respondents ages 13 to 24 
seriously considered attempting suicide in the past year,\13\ including 
nearly half of multiracial LGBTQ youth respondents.\14\ A sharp rise in 
eating disorders throughout the COVID-19 PHE also demonstrates the 
extent of this crisis for young people.\15\ Emergency department visits 
for adolescent girls ages 12-17 with eating disorders doubled in 
January 2022 as compared to 2019,\16\ and children are beginning to 
experience eating disorders at younger ages.\17\ In addition, in 2021, 
nearly 3 in 5 teen girls felt persistently sad or hopeless, the highest 
level reported over the past decade.\18\
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    \10\ Mental Health America (2022). Youth Ranking 2022. https://mhanational.org/issues/2022/mental-health-america-youth-data.
    \11\ Sheridan D, Grusing S, Marshall R. (2022) Changes in 
Suicidal Ingestion Among Preadolescent Children from 2000 to 2020. 
JAMA Pediatrics. https://jamanetwork.com/journals/jamapediatrics/article-abstract/2789948; see also CDC, Youth Risk Behavior Survey, 
available at https://www.cdc.gov/healthyyouth/data/yrbs/pdf/YRBS_Data-Summary-Trends_Report2023_508.pdf.
    \12\ Bridge JA, Horowitz LM, Fontanella CA, et al. (2018). Age-
Related Racial Disparity in Suicide Rates Among US Youths From 2001 
Through 2015. JAMA Pediatrics. https://jamanetwork.com/journals/jamapediatrics/fullarticle/2680952.
    \13\ The Trevor Project (2022). 2022 National Survey on LGBTQ 
Youth Mental Health. https://www.thetrevorproject.org/survey-2022/.
    \14\ The Trevor Project (2022). The Mental Health and Well-Being 
of Multiracial LGBTQ Youth. https://www.thetrevorproject.org/research-briefs/the-mental-health-and-well-being-of-multiracial-lgbtq-youth-aug-2022/.
    \15\ Radhakrishnan L, Leeb R, Bitsko R, Carey K, Gates A, 
Holland K, Hartnett K, Kite-Powell A, DeVies J, Smith A, van Santen 
K, Crossen S, Sheppard M, Wotiz S, Lane R, Njai R, Johnson A, Winn 
A, Kirking H, Rodgers L, Thomas C, Soetebier K, Adjemian J, Anderson 
K. (2022) Pediatric Emergency Department Visits Associated with 
Mental Health Conditions Before and During the COVID-19 Pandemic--
United States, January 2019-January 2022. MMWR Morb Mortal Wkly Rep 
2022; 71(8);319-324. https://www.cdc.gov/mmwr/volumes/71/wr/mm7108e2.htm.
    \16\ Id.
    \17\ Stuart B. Murray, Aaron J. Blashill, and Jerel P. Calzo 
(2022). Prevalence of Disordered Eating and Associations With Sex, 
Pubertal Maturation, and Weight in Children in the US, available at 
https://jamanetwork.com/journals/jamapediatrics/article-abstract/2794847.
    \18\ Centers for Disease Control and Prevention, National Center 
for HIV, Viral Hepatitis, STD, and TB Prevention, U.S. Teen Girls 
Experiencing Increased Sadness and Violence (Feb. 13, 2023), 
available at https://www.cdc.gov/nchhstp/newsroom/2023/increased-sadness-and-violence-press-release.html.
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    Americans are too frequently discouraged from and forgo seeking 
mental health and substance use disorders care because of barriers, 
both inside and outside of the health care system, such as 
discrimination, stigmatization,\19\ inability to find an in-network 
provider accepting new patients,\20\ cost, and geography. These 
barriers are particularly problematic for young adults ages 18-34, who 
are less likely to believe their mental health symptoms are well-
managed than older adults,\21\ and for people seeking substance use 
disorder treatment.\22\ One survey reports that less than seven percent 
of people in need of substance use disorder treatment received care at 
a specialty facility and less than 10 percent received ``any 
treatment,'' \23\

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while only about 19 percent of people with opioid use disorder in 2021 
received life-saving medications.\24\ Sixty percent of rural Americans 
live in mental health professional shortage areas.\25\ Additionally, 
non-metropolitan adults were more likely than metropolitan adults 
(43.7% vs. 34.5%) to see a general practitioner or family doctor, as 
opposed to a mental health specialist, for depressive symptoms, and 
among non-metropolitan adults with depression, fewer than 20 percent 
received treatment from a mental health professional.\26\
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    \19\ Van Boekel, L.C., Brouwers, E.P., van Weeghel, J., & 
Garretsen, H.F. (2013). Stigma among health professionals towards 
patients with substance use disorders and its consequences for 
healthcare delivery: systematic review. Drug and Alcohol Dependence, 
131(1-2), 23-35. DOI: 10.1016/j.drugalcdep.2013.02.018, available at 
https://pubmed.ncbi.nlm.nih.gov/23490450/.
    \20\ Cf. Jack Turbin. Ghost networks of psychiatrists make money 
for insurance companies but hinder patients' access to care. Stat 
News, June 17, 2019, https://www.statnews.com/2019/06/17/ghost-networks-psychiatrists-hinder-patient-care/.
    \21\ National Alliance on Mental Illness (2021). Mood Disorder 
Survey Report. https://nami.org/NAMI/media/NAMI-Media/Research/NAMI-Mood-Disorder-Survey-White-Paper.pdf.
    \22\ Esther Adeniran, Megan Quinn, Richard Wallace, Rachel R. 
Walden, Titilola Labisi, Afolakemi Olaniyan, Billy Brooks, Robert 
Pack (2023). A scoping review of barriers and facilitators to the 
integration of substance use treatment services into US mainstream 
health care, Drug and Alcohol Dependence Reports; Volume 7, 100152 
https://www.sciencedirect.com/science/article/pii/S2772724623000227.
    \23\ Center for Behavioral Health Statistics and Quality (2022), 
Results from the 2021 National Survey on Drug Use and Health: 
Detailed Tables, Substance Abuse and Mental Health Services 
Administration, available at https://www.samhsa.gov/data/report/2021-nsduh-detailed-tables. For this purpose, ``any treatment'' 
includes having participated in a mutual aid group, such as 
Alcoholics Anonymous, Narcotics Anonymous, or SMART Recovery, and 
receiving services in a hospital through primary care.
    \24\ Id.
    \25\ Health Resources and Services Administration, Designated 
Health Professional Shortage Areas Statistics (data updated through 
June 30, 2023), available at https://data.hrsa.gov/Default/GenerateHPSAQuarterlyReport (last accessed July 18, 2023).
    \26\ Borders, TF. Major Depression, Treatment Receipt, and 
Treatment Sources among Non-Metropolitan and Metropolitan Adults. 
Lexington, KY: Rural and Underserved Health Research Center; 2020. 
Available at https://www.ruralhealthresearch.org/publications/1348.
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    Moreover, against the backdrop of this mental health and substance 
use disorder crisis, when patients seek benefits under their health 
plan or coverage, they often find that coverage for treatment of mental 
health conditions or substance use disorders operates in a separate--
and too often disparate--system than their health plan's coverage for 
treatment of medical/surgical conditions.\27\ These disparities 
exacerbate the hardships faced by people living with mental health 
conditions and substance use disorders. The disparities also can 
magnify the challenges faced by the parents, children, and loved ones 
of people living with mental health conditions or substance use 
disorders as well as those who care for them, who are profoundly 
affected by the person's illness and their difficulties in getting, or 
inability to get, coverage for needed care.\28\
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    \27\ See, generally, Commonwealth Fund, Behavioral Health Care 
in the United States: How It Works and Where It Falls Short, 
available at https://www.commonwealthfund.org/publications/explainer/2022/sep/behavioral-health-care-us-how-it-works-where-it-falls-short.
    \28\ See National Alliance on Mental Illness, Mental Health By 
the Numbers, available at https://www.nami.org/mhstats (showing 8.4 
million people in the U.S. provide care to an adult with a mental or 
emotional health issue); KFF, KFF/CNN Mental Health In America 
Survey, available at https://www.kff.org/other/report/kff-cnn-mental-health-in-america-survey/ (showing half of adults say they 
have had a severe mental health crisis in their family); California 
Health Care Foundation, In Their Own Words: How Fragmented Care 
Harms People with Both Mental Illness and Substance Use Disorder, 
available at https://www.chcf.org/publication/fragmented-care-harms-people-mental-illness-substance-use-disorder/.
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    Ensuring meaningful access to mental health and substance use 
disorder care is vital to addressing the Nation's mental health and 
substance use disorder crisis. A key component of access is the 
availability of an adequate number of appropriate providers within a 
plan's network. A survey of adults with private health coverage found 
that plan participants were more likely to perceive their mental health 
provider networks as inadequate when compared to medical provider 
networks.\29\ Furthermore, another survey noted that most plan 
participants reported choosing mental health services from out-of-
network mental health providers based on provider quality issues.\30\
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    \29\ See Busch, Susan H. and Kelly Kyanko, Assessment of 
Perception of Mental Health vs. Medical Health Plan Networks Among 
US Adults with Private Insurance, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
    \30\ See Kelly A. Kyanko, Leslie A. Curry, and Susan H. Busch, 
Out-of-Network Providers Use More Likely in Mental Health than 
General Health Care Among Privately Insured, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4707657/.
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    A 2019 Milliman report found a growing disparity in the utilization 
of out-of-network behavioral health care (which the report uses to 
refer to care for mental health conditions and substance use disorders) 
providers relative to out-of-network medical/surgical care 
providers.\31\ The same report found that the disparity between how 
often out-of-network behavioral health inpatient facilities were used 
relative to out-of-network medical/surgical inpatient facilities had 
increased 85 percent between 2013 and 2017 for people with commercial 
preferred provider organization (PPO) health plans. Over the same 
period, there were also increasing disparities in the use of out-of-
network outpatient facilities and office visits for mental health and 
substance use disorder treatment relative to the use of out-of-network 
outpatient facilities and office visits for medical/surgical care.\32\ 
The report additionally noted a growing disparity in reimbursement 
rates (as a percentage of Medicare-allowed amounts) between in-network 
mental health and substance use disorder providers and medical/surgical 
providers. Primary care reimbursements were, on average, 23.8 percent 
higher than behavioral health office visit reimbursements relative to 
Medicare allowed amounts in 2017--up from a 20.8 percent difference in 
2015.\33\ Low reimbursement rates for behavioral health providers and 
high demand for services, among other factors, contribute to this 
difficulty finding in-network providers,\34\ which can stifle efforts 
to receive necessary care for mental health conditions or substance use 
disorders.
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    \31\ Melek, S., Davenport, S., Gray, T.J. (2019). Addiction and 
mental health vs. physical health: Widening disparities in network 
use and provider reimbursement (p. 6). Milliman. https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
    \32\ Id.
    \33\ Id. at pp. 6-7.
    \34\ See Busch, Susan H. and Kelly Kyanko, Assessment of 
Perception of Mental Health vs. Medical Health Plan Networks Among 
US Adults with Private Insurance, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8536951/.
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    MHPAEA's fundamental purpose is to ensure that individuals in group 
health plans or with group or individual health insurance coverage who 
seek treatment for covered mental health conditions or substance use 
disorders do not face greater barriers to accessing benefits for such 
mental health conditions or substance use disorders than they would 
face when seeking coverage for the treatment of a medical condition or 
for a surgical procedure.\35\ Such barriers are particularly 
problematic when they effectively result in the loss of benefits that 
the plan or issuer purports to make available and that individuals 
reasonably expect to be covered, and they contravene MHPAEA's clear 
mandate that the financial requirements and treatment limitations 
applicable to mental health benefits or substance use disorder benefits 
be ``no more restrictive'' than the predominant requirements and 
limitations applicable to substantially all medical/surgical 
benefits.\36\
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    \35\ In a floor statement, Representative Patrick Kennedy (D-
RI), one of the chief architects of MHPAEA, made the case for its 
passage on the grounds that ``access to mental health services is 
one of the most important and most neglected civil rights issues 
facing the Nation. For too long, persons living with mental 
disorders have suffered from discriminatory treatment at all levels 
of society'' 153 Cong. Rec. S1864-5 (daily ed. Feb. 12, 2007). Cf. 
H. Rept. 110-374, Part 3, available at https://www.congress.gov/congressional-report/110th-congress/house-report/374. (``The purpose 
of H.R. 1424, the `Paul Wellstone Mental Health and Addiction Equity 
Act of 2007' is to have fairness and equity in the coverage of 
mental health and substance-related disorders vis-a-vis coverage for 
medical and surgical disorders.'')
    \36\ Internal Revenue Code (Code) section 9812(a)(3)(A), 
Employee Retirement Income Security Act of 1974 (ERISA) section 
712(a)(3)(A), and Public Health Service Act (PHS Act) section 
2726(a)(3)(A).
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    MHPAEA was enacted as bipartisan legislation reflecting what 
Congress saw as a shared public concern: that it is wrong to place 
greater burdens on people in need of mental health and

[[Page 51555]]

substance use disorder treatment than people in need of medical/
surgical treatment under the same health coverage. However, almost 15 
years after MHPAEA's enactment, disparities persist, as people face 
greater barriers when accessing benefits for mental health and 
substance use disorders under their plan or coverage than they do when 
accessing medical/surgical benefits. The Departments' experience since 
the MHPAEA final regulations were issued in 2013 (2013 final 
regulations) (78 FR 68240 (Nov. 13, 2013)) has shown that too often, 
group health plans and health insurance issuers offering group or 
individual health insurance coverage are not operating in compliance 
with MHPAEA, which can have devastating consequences for individuals 
with mental health conditions and substance use disorders and their 
families. The Departments continue to receive and investigate 
complaints that plans and issuers fail to comply with MHPAEA, by 
continuing to restrict access to benefits for mental health conditions 
and substance use disorders in ways that are more onerous and limiting 
than for medical or surgical care. As reflected in recent reports to 
Congress on MHPAEA compliance, the Departments found nearly all plans 
or issuers audited for MHPAEA compliance could not demonstrate 
compliance with the law's obligations in response to an initial request 
for NQTL comparative analyses.\37\ As a result of these failures, 
participants and beneficiaries routinely encounter additional barriers 
to access and are denied needed and potentially lifesaving care for 
opioid use disorder, eating disorders, autism spectrum disorder (ASD), 
anxiety, depression, and other mental health conditions and substance 
use disorders. The harm to these participants and beneficiaries, and to 
their families, friends, co-workers, and others, is incalculable.
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    \37\ 2022 MHPAEA Report to Congress, p. 4, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf; 2023 MHPAEA 
Comparative Analysis Report to Congress, July 2023 (2023 MHPAEA 
Report to Congress), available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
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    In the last 2 years, the Departments have made an unprecedented 
commitment to advance parity for mental health and substance use 
disorder care by making it a top enforcement priority, especially with 
respect to NQTLs.\38\ Specifically, EBSA, which has primary enforcement 
jurisdiction over MHPAEA for approximately 2.5 million private, 
employment-based group health plans covering approximately 133 million 
individuals, is taking extraordinary steps to enforce mental health and 
substance use disorder parity requirements and ensure that it is using 
its full authority to help participants and beneficiaries receive 
equitable coverage for mental health and substance use disorder 
treatment. Similarly, CMS continues to prioritize its MHPAEA 
enforcement activities with respect to non-Federal governmental plans 
nationwide \39\ and health insurance issuers offering group and 
individual health insurance coverage in States where CMS is the direct 
enforcer of MHPAEA with respect to issuers.40 41
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    \38\ As discussed in more detail later in this preamble, NQTLs 
are generally non-numerical requirements that limit the scope or 
duration of benefits, such as prior authorization requirements, step 
therapy, and standards for provider admission to participate in a 
network, including methodologies for determining reimbursement 
rates.
    \39\ PHS Act section 2723(b).
    \40\ PHS Act section 2723(a).
    \41\ CMS currently enforces MHPAEA with respect to issuers in 
Texas and Wyoming. In addition, CMS has collaborative enforcement 
agreements with Alabama, Florida, Louisiana, Montana, and Wisconsin. 
These States with collaborative enforcement agreements with CMS 
perform State regulatory and oversight functions with respect to 
some or all of the applicable provisions of title XXVII of the PHS 
Act, including MHPAEA. However, if the State finds a potential 
violation and is unable to obtain compliance by an issuer, the State 
will refer the matter to CMS for possible enforcement action.
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    In addition to using their enforcement authority, the Departments 
continue to work to reduce the stigma and discrimination that 
individuals with mental health conditions and substance use disorders 
face, raise awareness so these individuals can receive the treatment 
they need and the benefits to which they are entitled, and engage 
consumer advocates, members of the regulated community, State 
regulators, and other interested parties to inform the Departments' 
efforts in addressing the nation's mental illness and substance use 
disorder epidemic. These efforts have helped to deepen the Departments' 
understanding of the barriers to mental health and substance use 
disorder treatment Americans face, inform DOL's and HHS's MHPAEA 
enforcement approach, and connect advocacy groups to government 
resources.
    The Departments have also continued to help plans, issuers, 
consumers, providers, States, and other interested parties understand 
and comply with MHPAEA's requirements, including the NQTL comparative 
analysis requirements. Additionally, the Departments have worked to 
help families, caregivers, and individuals understand the law and 
benefit from it, as Congress intended.
    Since the promulgation of the 2013 final regulations on November 
13, 2013,\42\ the Departments have provided extensive guidance and 
compliance assistance materials to the regulated community, State 
regulators, and other interested parties to facilitate the 
implementation and enforcement of MHPAEA, as discussed later in this 
preamble, including numerous sets of Frequently Asked Questions 
(FAQs),\43\

[[Page 51556]]

fact sheets,\44\ compliance assistance tools,\45\ templates,\46\ 
reports,\47\ and publications.\48\ Despite this unprecedented outreach, 
plans and issuers continue to fall short of MHPAEA's central mandate to 
ensure that participants, beneficiaries, and enrollees do not face 
greater barriers and restrictions to accessing benefits for mental 
health conditions or substance use disorders than they face when 
accessing benefits for a medical condition or surgical procedure. This 
noncompliance is especially evident with respect to the design and 
application of NQTLs that apply to mental health and substance use 
disorder benefits. Accordingly, Congress amended MHPAEA in the CAA, 
2021, as described later in this preamble.
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    \42\ 78 FR 68240 (Nov. 13, 2013).
    \43\ See, e.g., FAQs About Affordable Care Act Implementation 
Part V and Mental Health Parity Implementation (Dec. 22, 2010), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-v.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-5; FAQs About Affordable Care Act Implementation (Part VII) 
and Mental Health Parity Implementation (Nov. 17, 2011), available 
at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-vii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-7; Understanding Implementation of the Mental Health Parity 
and Addiction Equity Act of 2008 (May 9, 2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/understanding-implementation-of-mhpaea.pdf; 
FAQs for Employees about the Mental Health Parity and Addiction 
Equity Act (May 18, 2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/mhpaea-2.pdf; FAQs About Affordable Care Act Implementation (Part 
XVII) and Mental Health Parity Implementation (Nov. 8, 2013), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xvii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-17; FAQs About Affordable Care Act Implementation (Part 
XVIII) and Mental Health Parity Implementation (Jan. 9, 2014), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xviii.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-18; FAQs About Affordable Care Act Implementation (Part 
XXIX) and Mental Health Parity Implementation (Oct. 23, 2015), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxix.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-29 (FAQs Part XXIX); FAQs About Affordable Care Act 
Implementation Part 31, Mental Health Parity Implementation, and 
Women's Health and Cancer Rights Act Implementation (Apr. 20, 2016), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-31.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-31; FAQs About Affordable Care Act Implementation Part 34 
and Mental Health and Substance Use Disorder Parity Implementation 
(Oct. 27, 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-34.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-34 (FAQs Part 34); FAQs About Mental 
Health and Substance Use Disorder Parity Implementation and the 21st 
Century Cures Act Part 38 (June 16, 2017), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-38.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-set-38 
(FAQs Part 38); Proposed FAQs About Mental Health and Substance Use 
Disorder Parity Implementation and the 21st Century Cures Act Part 
39, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-proposed.pdf 
(Proposed FAQs Part 39); Final FAQs About Mental Health and 
Substance Use Disorder Parity Implementation and the 21st Century 
Cures Act Part 39 (Sept. 5, 2019), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-39-final.pdf and https://www.hhs.gov/guidance/document/affordable-care-act-implementation-faqs-final-set-39 (FAQs 
Part 39); FAQs About Families First Coronavirus Response Act and 
Coronavirus Aid, Relief, and Economic Security Act Implementation 
Part 43 (June 23, 2020), available at https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-43.pdf and https://www.hhs.gov/guidance/document/faqs-about-families-first-coronavirus-response-act-and-coronavirus-aid-relief-and-0 (FAQs part 43); FAQs About Mental Health and Substance 
Use Disorder Parity Implementation and the Consolidated 
Appropriations Act, 2021 Part 45 (Apr. 2, 2021), available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-45.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/MHPAEA-FAQs-Part-45.pdf (FAQs Part 45); and Mental Health Parity and 
Addiction Equity Act (MHPAEA) FAQs, available at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/mhpaea-1#.
    \44\ See, e.g., The Mental Health Parity and Addiction Equity 
Act of 2008 (MHPAEA) Fact Sheet (Jan. 2010), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea.pdf; MHPAEA Enforcement Fact 
Sheet (Jan. 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement.pdf; FY 2016 MHPAEA Enforcement Fact Sheet, 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2016.pdf; FY 2017 MHPAEA Enforcement Fact Sheet, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2017.pdf; 
FY 2018 MHPAEA Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/fact-sheets/mhpaea-enforcement-2018.pdf; FY 2019 
MHPAEA Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2019.pdf and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2019.pdf; FY 2020 MHPAEA Enforcement Fact Sheet, 
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2020.pdf 
and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/mhpaea-enforcement-2020.pdf; FY 2021 MHPAEA 
Enforcement Fact Sheet, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2021.pdf; and FY 2022 MHPAEA Enforcement Fact 
Sheet, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement-2022.pdf.
    \45\ See Self-Compliance Tool for Part 7 of ERISA: Health Care-
Related Provisions, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-appendix-a.pdf; 2018 Self-Compliance 
Tool for the Mental Health Parity and Addiction Equity Act (MHPAEA), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool-2018.pdf; 
and 2020 Self-Compliance Tool for the Mental Health Parity and 
Addiction Equity Act (MHPAEA), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
    \46\ See Form to Request Documentation from an Employer-
Sponsored Health Plan or a Group or Individual Market Insurer 
Concerning Treatment Limitations, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-disclosure-template.pdf.
    \47\ See, e.g., DOL 2012 Report to Congress: Compliance With the 
Mental Health Parity and Addiction Equity Act of 2008 (Jan. 1, 
2012), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2012.pdf; DOL 2014 Report to Congress: Compliance 
of Group Health Plans (and Health Insurance Coverage Offered in 
Connection with Such Plans With the Requirements of the Mental 
Health Parity and Addiction Equity Act of 2008 (Sept. 2014), 
available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/mhpaea-report-to-congress-2014.pdf; DOL 2016 Report to Congress: Improving 
Healoverage for Mental Health and Substance Use Disorder Patients 
Including Compliance with the Federal Mental Health and Substance 
Use Disorder Parity Provisions (Jan. 2016), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/improving-health-coverage-for-mental-health-and-substance-use-disorder-patients.pdf; HHS Mental Health Parity 
and Addiction Equity Act of 2008 (MHPAEA) Enforcement Report (Dec. 
12, 2017), available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/HHS-2008-MHPAEA-Enforcement-Period.pdf; DOL 2018 Report to Congress: Pathway to Full Parity, 
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-2018-pathway-to-full-parity.pdf; 21st Century Cures Act: Section 13002 
Action Plan for Enhanced Enforcement of Mental Health and Substance 
Use Disorder Coverage, available at https://www.hhs.gov/sites/default/files/parity-action-plan-b.pdf; HHS Mental Health Parity and 
Addiction Equity Act of 2008 (MHPAEA) Enforcement Report for the 
2018 Federal Fiscal Year, available at https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/FY2018-MHPAEA-Enforcement-Report.pdf; DOL 2020 Report to Congress: Parity 
Partnerships: Working Together, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/dol-report-to-congress-parity-partnerships-working-together.pdf; 2022 Report to Congress: Realizing Parity, Reducing 
Stigma, and Raising Awareness, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf; MHPAEA Comparative Analysis Report to 
Congress, July 2023, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
    \48\ See Consumer Guide to Disclosure Rights: Making the Most of 
Your Mental Health and Substance Use Disorder Benefits, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/disclosure-guide-making-the-most-of-your-mental-health-and-substance-use-disorder-benefits.pdf; Know Your 
Rights: Parity for Mental Health and Substance Use Disorder 
Benefits, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/know-your-rights-parity-for-mental-health-and-substance-use-disorder-benefits.pdf; 
Parity of Mental Health and Substance Use Benefits with Other 
Benefits: Using Your Employer-Sponsored Health Plan to Cover 
Services, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/parity-of-mental-health-and-substance-use-benefits-with-other-benefits.pdf; 
Understanding Parity: A Guide to Resources for Families and 
Caregivers, available at https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/laws/mental-health-parity/understanding-parity-a-guide-to-resources-for-families-and-caregivers.pdf; Warning 
Signs--Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) 
that Require Additional Analysis to Determine Mental Health Parity 
Compliance, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/warning-signs-plan-or-policy-nqtls-that-require-additional-analysis-to-determine-mhpaea-compliance.pdf; Mental Health Parity Provisions Questions and 
Answers, available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide-mhpaea.pdf; Mental Health and Substance use 
Disorder Parity: Compliance Assistance Materials Index, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/compliance-assistance-materials-index.pdf; 
The Essential Aspects of Parity: A Training Tool for Policymakers, 
available at https://store.samhsa.gov/product/essential-aspects-of-parity-training-tool-for-policymakers/pep21-05-00-001; and 
Approaches in Implementing the Mental Health Parity and Addiction 
Equity Act: Best Practices from the States, available at https://store.samhsa.gov/product/Approaches-in-Implementing-the-Mental-Health-Parity-and-Addiction-Equity-Act-Best-Practices-from-the-States/SMA16-4983.
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    The Departments are proposing these revised rules to reinforce 
MHPAEA's fundamental objective, to ensure that limitations on mental 
health and substance use disorder benefits are no

[[Page 51557]]

more restrictive than the limitations applicable to medical/surgical 
benefits. These proposed rules also would implement important 
requirements that Congress enacted in the CAA, 2021 to ensure that 
plans and issuers perform and document their NQTL comparative analyses 
and provide them to the Departments or an applicable State authority 
upon request for evaluation of compliance with MHPAEA. The aim of these 
proposed rules is to ensure that individuals benefit from the full 
protections afforded to them under MHPAEA, while providing clear 
standards for plans and issuers on how to comply with MHPAEA.
    Specifically, the proposed regulations would:
     Make clear that MHPAEA requires that individuals can 
access their mental health and substance use disorder benefits in 
parity with medical/surgical benefits.
     Provide specific examples that make clear that plans and 
issuers cannot use more restrictive prior authorization and other 
medical management techniques for mental health and substance use 
disorder benefits; standards related to network composition for mental 
health and substance use disorder benefits; and factors to determine 
out-of-network reimbursement rates for mental health and substance use 
disorder providers.
     Require plans and issuers to collect and evaluate outcomes 
data and take action to address material differences in access to 
mental health and substance use disorder benefits as compared to 
medical/surgical benefits, with a specific focus on ensuring that there 
are not any material differences in access as a result of the 
application of their network composition standards.
     Codify the requirement that plans and issuers conduct 
meaningful comparative analyses to measure the impact of NQTLs. This 
includes evaluating standards related to network composition, out-of-
network reimbursement rates, and prior authorization NQTLs.
     Implement the sunset provision for self-funded, non-
Federal governmental plan elections to opt out of compliance with 
MHPAEA, adopted in the CAA, 2023.
    As a result of these proposals, the Departments anticipate changes 
in network composition and medical management techniques that would 
result in more robust mental health and substance use disorder provider 
networks and fewer and less restrictive prior authorization 
requirements for individuals seeking mental health and substance use 
disorder treatment.
    Under a regulatory regime in which MHPAEA's promise of parity is 
realized, participants, beneficiaries, and enrollees would experience 
financial requirements and treatment limitations for mental health and 
substance use disorder benefits that are in parity with those applied 
to their medical/surgical benefits. These proposed rules are designed 
to achieve MHPAEA's purpose to ensure that participants, beneficiaries, 
and enrollees will not face greater restrictions on access to obtaining 
mental health and substance use disorder benefits than those for 
medical/surgical benefits. At the same time, the proposed rules also 
aim to ensure that benefit structures that apply limitations that 
reflect independent professional medical or clinical standards or guard 
against indicators of fraud, waste, and abuse (while minimizing the 
negative impact on access to appropriate benefits) would continue to be 
permitted, as the Departments are of the view that such limitations are 
premised on standards that generally provide an independent and less 
suspect basis for determining access to mental health and substance use 
disorder treatment. These proposed rules also aim to ensure that plans 
and issuers that offer mental health and substance use disorder 
benefits strive to attain and maintain mental health and substance use 
disorder treatment provider networks that are as robust as their 
medical/surgical provider networks in terms of available in-network 
providers and facilities-not just as shown by a list of names in a 
provider directory, but as measured by actual provider participation 
and as evidenced by participant usage.
    In evaluating their compliance with these proposed rules, plans and 
issuers would be required to consider whether an NQTL is inhibiting 
access to treatment for mental health conditions and substance use 
disorders by examining whether the NQTL that applies to mental health 
or substance use disorder benefits is more restrictive than the 
predominant NQTL that applies to substantially all medical/surgical 
benefits within a classification of benefits set forth under the 
regulations.\49\ A plan or issuer would also be required to consider 
whether the processes, strategies, evidentiary standards, or other 
factors that it uses to design or apply an NQTL to mental health or 
substance use disorder benefits in a classification are comparable to, 
and applied no more stringently than, those used in designing and 
applying the NQTL to medical/surgical benefits in the same 
classification. Under these proposed rules, plans and issuers would be 
required to consider data relevant to an NQTL's impact on participants' 
or beneficiaries'\50\ abilities to obtain mental health and substance 
use disorder benefits under the plan or coverage relative to its impact 
on access to medical/surgical benefits, and to take action to address 
the potential causes of material differences in access identified 
through the data as necessary to ensure compliance. As the proposal 
makes clear, ensuring that people seeking mental health and substance 
use disorder treatment do not face greater barriers to access to 
benefits for such treatment is central to the fundamental purpose of 
MHPAEA. These proposed rules would ensure that NQTLs that apply to 
mental health and substance use disorder benefits are ``no more 
restrictive,'' and that processes, strategies, evidentiary standards, 
and other factors are ``comparable to, and applied no more 
stringently,'' than those applicable to medical/surgical benefits. 
These proposed rules' focus on access to mental health and substance 
use disorder benefits and constraints on obtaining such benefits would 
add needed clarity to the statutory requirements for the regulated 
community and other interested parties.
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    \49\ The required classifications of benefits (and permissible 
sub-classifications) used to apply the MHPAEA regulations are 
addressed at 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), 
and 45 CFR 146.136(c)(2)(ii).
    \50\ These proposed rules would apply directly to group health 
plans or health insurance coverage offered by an issuer in 
connection with a group health plan, and would apply to individual 
health insurance coverage by cross-reference through 45 CFR 147.160, 
which currently provides that the requirements of 45 CFR 146.136 
apply to health insurance coverage offered by a health insurance 
issuer in the individual market in the same manner and to the same 
extent as to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan in the large group 
market. As noted below, HHS also proposes an amendment to 45 CFR 
147.160 to also include a cross-reference to proposed 45 CFR 146.137 
to similarly extend the new proposed comparative analysis 
requirements to individual health insurance coverage in the same 
manner and to the same extent as group health insurance coverage. 
For simplicity, this preamble generally refers only to the 
applicability on group health plans and health insurance coverage 
offered in connection with a group health plan and to participants 
and beneficiaries enrolled in such a plan or coverage, but 
references to participants and beneficiaries should also be 
considered to include enrollees in the individual market, unless 
otherwise specified.
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    Under the current rules, plans and issuers are generally permitted 
to prepare NQTL comparative analyses without regard to the overall 
impact of NQTLs on participants and beneficiaries. This has contributed 
to plans and issuers looking for ways to

[[Page 51558]]

characterize the processes, strategies, evidentiary standards, and 
other factors associated with an NQTL as being ``comparable'' and 
``applied no more stringently'' through careful word choice, without 
regard to how, in operation, the limitation burdens participants and 
beneficiaries by limiting access to, or by limiting the scope and 
duration of, the plan's or issuer's mental health and substance use 
disorder benefits relative to medical/surgical benefits. Such 
limitations on mental health and substance use disorder benefits under 
the plan or coverage must be analyzed in terms of the comparative 
burden on access they place (that is, whether they are more 
restrictive) on individuals.
    These proposed rules set forth a number of standards that are 
intended to reinforce the proper application of the statutory and 
regulatory requirements; promote compliance with the NQTL comparative 
analysis requirements; explain how the various components of the 
regulation work together; and ensure that the purpose of MHPAEA, to 
remove greater barriers to access to mental health and substance use 
disorder benefits, is fulfilled. The Departments recognize the value of 
input from interested parties and welcome feedback on all aspects of 
the approach set forth in these proposed rules, as well as alternative 
approaches that would enable the Departments to more effectively 
implement MHPAEA.

B. The Mental Health Parity Act, The Mental Health Parity and Addiction 
Equity Act, and the Affordable Care Act

    In 1996, Congress enacted the Mental Health Parity Act of 1996 
(MHPA 1996), which required parity in aggregate lifetime and annual 
dollar limits for mental health benefits and medical/surgical benefits. 
These mental health parity provisions were codified in Employee 
Retirement Income Security Act of 1974 (ERISA) section 712, PHS Act 
section 2705, and Internal Revenue Code (Code) section 9812, and 
applied to group health plans and health insurance coverage offered in 
connection with a group health plan.\51\
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    \51\ Public Law 104-204, 110 Stat. 2874 (Sept. 26, 1996). The 
Departments published interim final rules implementing MHPA 1996 at 
62 FR 66932 (Dec. 22, 1997).
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    MHPAEA was enacted on October 3, 2008, as sections 511 and 512 of 
the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 
(Division C of Pub. L. 110-343, 122 Stat. 3765), to amend ERISA section 
712, PHS Act section 2705, and Code section 9812 to add new 
requirements, including provisions to apply the mental health parity 
requirements to substance use disorder benefits, and make further 
amendments to the existing mental health parity provisions.
    MHPAEA, as enacted, generally requires that group health plans and 
health insurance issuers offering group health insurance coverage 
ensure that the financial requirements and treatment limitations 
applicable to mental health or substance use disorder benefits be no 
more restrictive than those applicable to medical/surgical benefits and 
that there be no separate financial requirements and treatment 
limitations applicable only with respect to mental health or substance 
use disorder benefits. Together with the existing requirements for 
parity in aggregate lifetime and annual dollar limits, this is referred 
to as providing mental health and substance use disorder benefits ``in 
parity'' with medical/surgical benefits.
    The Patient Protection and Affordable Care Act (Pub. L. 111-148, 
123 Stat. 3028) was enacted on March 23, 2010, and the Health Care and 
Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat. 1029) 
was enacted on March 30, 2010 (collectively, the Affordable Care Act). 
The Affordable Care Act reorganized, amended, and added to the 
provisions of part A of title XXVII of the PHS Act relating to group 
health plans and health insurance issuers in the group and individual 
markets. The Affordable Care Act added section 715(a)(1) to ERISA and 
section 9815(a)(1) to the Code to incorporate the provisions of part A 
of title XXVII of the PHS Act into ERISA and the Code, and to make them 
applicable to group health plans and health insurance issuers providing 
health insurance coverage in connection with group health plans. The 
PHS Act sections incorporated by these references are sections 2701 
through 2728.
    The Affordable Care Act extended MHPAEA to apply to individual 
health insurance coverage and redesignated MHPAEA in the PHS Act as 
section 2726.\52\ Additionally, section 1311(j) of the Affordable Care 
Act applies PHS Act section 2726 to qualified health plans (QHPs) \53\ 
in the same manner and to the same extent as to health insurance 
issuers and group health plans. Furthermore, HHS' regulations regarding 
essential health benefits (EHBs) \54\ require health insurance issuers 
offering non-grandfathered health insurance coverage in the individual 
and small group markets to comply with MHPAEA and its implementing 
regulations in order to satisfy the requirement to cover ``mental 
health and substance use disorder services, including behavioral health 
treatment,'' as part of EHBs.\55\
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    \52\ The requirements of MHPAEA generally apply to both 
grandfathered and non-grandfathered health plans. See section 1251 
of the Affordable Care Act and its implementing regulations at 26 
CFR 54.9815-1251, 29 CFR 2590.715-1251, and 45 CFR 147.140. Under 
section 1251 of the Affordable Care Act, grandfathered health plans 
are exempted only from certain Affordable Care Act requirements 
enacted in Subtitles A and C of Title I of the Affordable Care Act. 
The provisions extending MHPAEA requirements to individual health 
insurance coverage and requiring that qualified health plans comply 
with MHPAEA are not included in these sections. However, because 
MHPAEA requirements apply to health insurance coverage offered in 
the small group market only through the requirement to provide EHB, 
which does not apply to grandfathered health plans, the requirements 
of MHPAEA do not apply to grandfathered health plans offered in the 
small group market.
    \53\ A QHP is a health insurance plan that is certified by a 
health insurance exchange that it meets certain minimum standards 
established under the Affordable Care Act and described in subpart C 
of 45 CFR part 156. See 45 CFR 155.20.
    \54\ Section 1302 of the Affordable Care Act requires non-
grandfathered health plans in the individual and small group markets 
to cover essential health benefits (EHB), which include items and 
services in the following ten benefit categories: (1) ambulatory 
patient services; (2) emergency services; (3) hospitalization; (4) 
maternity and newborn care; (5) mental health and substance use 
disorder services including behavioral health treatment; (6) 
prescription drugs; (7) rehabilitative and habilitative services and 
devices; (8) laboratory services; (9) preventive and wellness 
services and chronic disease management; and (10) pediatric 
services, including oral and vision care. See 45 CFR 156.115 for 
description of the benefits a health plan must provide to provide 
EHB.
    \55\ Section 1302(b)(1)(E) of the Affordable Care Act; 45 CFR 
156.115(a)(3).
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    On April 28, 2009, the Departments published a request for 
information soliciting comments on issues under MHPAEA (2009 RFI).\56\ 
Over the next few years, the Departments considered comments regarding 
MHPAEA and issued further clarifications and guidance. On February 2, 
2010, the Departments published interim final regulations implementing 
MHPAEA (interim final regulations).\57\ After considering the comments 
and other feedback received from interested parties, the Departments 
published the 2013 final regulations.\58\
---------------------------------------------------------------------------

    \56\ 74 FR 19155 (Apr. 28, 2009).
    \57\ 75 FR 5410 (Feb. 2, 2010).
    \58\ 78 FR 68240 (Nov. 13, 2013).
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    The 2013 final regulations established an exhaustive list of six 
classifications of benefits (not counting the exhaustive list of 
permissible sub-classifications also articulated in the 2013 final 
regulations): inpatient, in-network; inpatient, out-of-network; 
outpatient, in-network; outpatient, out-of-network; emergency care; and 
prescription drugs.

[[Page 51559]]

If a plan or health insurance coverage provides benefits for a mental 
health condition or substance use disorder in any of these 
classifications of benefits, benefits for that condition or disorder 
must be provided in every classification in which medical/surgical 
benefits are provided. The 2013 final regulations specify that the 
parity requirements apply to financial requirements, such as 
deductibles, copayments, and coinsurance; quantitative treatment 
limitations that are expressed numerically, such as day or visit 
limits; and NQTLs, which are generally non-numerical requirements that 
limit the scope or duration of benefits, such as prior authorization 
requirements, step therapy requirements, and standards for provider 
admission to participate in a network, including methodologies for 
determining reimbursement rates.
    Under MHPAEA, financial requirements and treatment limitations 
imposed on mental health or substance use disorder benefits cannot be 
more restrictive than the predominant financial requirements and 
treatment limitations that apply to substantially all medical/surgical 
benefits in a classification.\59\ The 2013 final regulations defined 
the ``substantially all'' numerical standard for a financial 
requirement or quantitative treatment limitation as two-thirds, using 
the same approach as the regulations implementing MHPA 1996 with 
respect to aggregate annual and lifetime limits.\60\ The 2013 final 
regulations also quantified ``predominant'' to mean the level of the 
financial requirement or quantitative treatment limitation that applies 
to more than one-half of medical/surgical benefits in the relevant 
classification subject to the financial requirement or quantitative 
treatment limitation. Using these numerical standards, the Departments 
established a mathematical test by which plans and issuers could 
determine if a financial requirement or quantitative treatment 
limitation that applies to medical/surgical benefits in a 
classification may be applied to mental health and substance use 
disorder benefits in that classification, and if so, what level of the 
financial requirement or quantitative treatment limitation is the most 
restrictive level that could be imposed on mental health or substance 
use disorder benefits within the classification.
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    \59\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
    \60\ With respect to aggregate lifetime and annual limits under 
MHPA 1996, the regulations in 26 CFR 54.9812-1(b); 29 CFR 
2590.712(b), and 45 CFR 146.136(b) set forth rules based on whether 
a plan (or health insurance coverage) includes an aggregate lifetime 
or annual dollar limit that applies to less than one-third or at 
least two-thirds of all medical/surgical benefits. These provisions 
do not address the provisions of PHS Act section 2711, as 
incorporated by ERISA section 715 and Code section 9815, which 
prohibit imposing lifetime and annual limits on the dollar value of 
EHBs. As a result, plans and issuers cannot impose lifetime and 
annual dollar limits on mental health and substance use disorder 
benefits that are not EHBs, if such a limit applies to less than 
one-third of all medical/surgical benefits.
---------------------------------------------------------------------------

    MHPAEA generally prohibits separate financial requirements and 
treatment limitations that apply only to mental health and substance 
use disorder benefits.\61\ The 2013 final regulations also prohibit 
plans and issuers from applying separate cumulative financial 
requirements, such as deductibles or out-of-pocket maximums, or 
separate cumulative quantitative treatment limitations, such as annual 
or lifetime day or visit limits, to mental health or substance use 
disorder benefits in a classification.\62\
---------------------------------------------------------------------------

    \61\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and 
PHS Act section 2726(a)(3)(A).
    \62\ 26 CFR 54.9812-1(c)(3)(v), 29 CFR 2590.712(c)(3)(v), 45 CFR 
146.136(c)(3)(v) and 147.160.
---------------------------------------------------------------------------

    In addition, the 2013 final regulations require that a group health 
plan or health insurance issuer may not impose an NQTL with respect to 
mental health and substance use disorder benefits in any classification 
unless, under the terms of the plan (or health insurance coverage) as 
written and in operation, any processes, strategies, evidentiary 
standards, or other factors used in applying the NQTL to mental health 
and substance use disorder benefits 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 to medical/surgical benefits in the same 
classification.\63\ The 2013 final regulations also implemented the 
statutory disclosure requirements imposed on group health plans and 
health insurance issuers that are subject to MHPAEA's requirements.\64\
---------------------------------------------------------------------------

    \63\ 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), 45 CFR 
146.136(c)(4)(i) and 147.160.
    \64\ 26 CFR 54.9812-1(d), 29 CFR 2590.712(d), 45 CFR 146.136(d) 
and 147.160.
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C. Guidance

    As described earlier in this preamble, since the promulgation of 
the 2013 final regulations, the Departments have provided extensive 
guidance and compliance assistance materials to the regulated 
community, State regulators, and other interested parties to facilitate 
the implementation and enforcement of MHPAEA. Specifically, the 
Departments have jointly issued 15 sets of FAQs with 96 questions, 
eight enforcement fact sheets, six compliance assistance tools and 
templates, seven reports to Congress, six press releases, and seven 
consumer publications. In general, the Departments' FAQs are designed 
to provide additional guidance and clarification on how MHPAEA applies 
in specific contexts and are informed by questions raised by interested 
parties and scenarios encountered in the context of the Departments' 
enforcement efforts. For example, FAQs Part 34 addresses how MHPAEA 
applies to treatment of substance use disorders (such as treating 
opioid use disorder with medication) and provides examples of 
impermissible NQTLs (such as more stringent fail-first or step-therapy 
requirements, including where an individual cannot reasonably satisfy 
if there are no available providers that can provide services related 
to the requirement in the participant's geographic area).\65\
---------------------------------------------------------------------------

    \65\ See FAQs Part 34, Q4-Q9.
---------------------------------------------------------------------------

    Guidance issued by the Departments also reflects stakeholder 
feedback and, in several instances, guidance documents were proposed 
before they were issued in final form. For example, the Departments 
proposed FAQs Part 39 on April 23, 2018. The finalized FAQs Part 39 was 
issued on September 5, 2019, and incorporate insights from the 
regulated community regarding compliance issues faced by plans and 
issuers, as well as issues faced by plan participants and their 
authorized representatives when seeking information about mental health 
and substance use disorder benefits. FAQs Part 39 also provides 
guidance on how the law and regulations apply to treatments for eating 
disorders, opioid use disorder, and ASD, as well as exclusions for 
experimental or investigative treatments, and standards for provider 
admission to a plan's or issuer's network, including the methodology 
for determining reimbursement rates for mental health and substance use 
disorder providers.\66\
---------------------------------------------------------------------------

    \66\ See FAQs Part 39, Q1-8.
---------------------------------------------------------------------------

    In addition to FAQs issued after the promulgation of the 2013 final 
regulations, the Departments have issued, generally every 2 years, an 
updated compliance program guidance document (the MHPAEA Self-
Compliance Tool), which is intended to help plans and issuers, State 
regulators, and other interested parties comply with and understand 
MHPAEA and the additional related requirements under ERISA that apply 
to group health plans. The Departments most recently issued

[[Page 51560]]

the MHPAEA Self-Compliance Tool in 2020 (2020 MHPAEA Self-Compliance 
Tool).\67\ The 2020 MHPAEA Self-Compliance Tool includes an 
illustrative, non-exhaustive list of NQTLs, a process for conducting 
NQTL comparative analyses, a list of the types of documents and 
information that a plan or issuer should have available to support its 
analyses, and illustrations of specific fact patterns to aid in 
compliance.\68\
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    \67\ Section 13001(a) of the 21st Century Cures Act added 
section 2726(a)(6) of the PHS Act, which directs the Departments to 
provide a publicly available compliance program guidance document 
that is updated every 2 years.
    \68\ See Self-Compliance Tool for the Mental Health Parity and 
Addiction Equity Act (MHPAEA) (2020), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf. The Departments 
issued the proposed 2020 MHPAEA Self-Compliance Tool on June 19, 
2020, and requested comments from interested parties. Engagement 
with interested parties through written comments and listening 
sessions provided vital feedback for finalizing the 2020 update to 
the MHPAEA Self-Compliance Tool, and that final version includes 
revisions in response to that feedback.
---------------------------------------------------------------------------

    The 2020 MHPAEA Self-Compliance Tool includes a stepwise process a 
plan or issuer can follow to perform an analysis assessing whether its 
NQTLs satisfy MHPAEA's parity requirements.\69\ Under this stepwise 
process, the plan or issuer should identify all NQTLs that apply to 
benefits under the plan or coverage. The plan or issuer should also 
identify all the medical/surgical benefits and mental health and 
substance use disorder benefits to which each NQTL applies. After 
identifying all NQTLs and the benefits to which each NQTL applies, the 
2020 MHPAEA Self-Compliance Tool suggests the plan or issuer identify 
the factors considered in the design of each NQTL. The plan or issuer 
should also identify the sources used to define those factors. Plans 
and issuers have flexibility in determining the factors and sources of 
factors to apply to NQTLs, so long as they are comparable and applied 
no more stringently to mental health and substance use disorder 
benefits than to medical/surgical benefits in the respective benefits 
classification. When identifying the sources of the factors considered 
in designing an NQTL, the plan or issuer should also identify any 
threshold of a factor that will implicate the NQTL.
---------------------------------------------------------------------------

    \69\ Id. at section F (at pp. 21-28).
---------------------------------------------------------------------------

    After identifying the plan's NQTLs, their application to mental 
health and substance use disorder benefits and to medical/surgical 
benefits, the factors used in designing each NQTL, and the sources of 
those factors, the plan or issuer should determine whether the 
processes, strategies, and evidentiary standards used in applying the 
NQTL are comparable and no more stringently applied to mental health 
and substance use disorder benefits than to medical/surgical benefits, 
both as written and in operation, in the relevant benefit 
classification. For instance, if a plan's or issuer's utilization 
review is conducted by different entities or individuals for mental 
health and substance use disorder benefits and medical/surgical 
benefits, the plan or issuer should have measures in place to ensure 
comparable application of utilization review policies.
    The 2020 MHPAEA Self-Compliance Tool stresses that measuring and 
evaluating results and quantitative outcomes can be helpful to identify 
potential areas of noncompliance. For example, comparing a plan's or 
issuer's average reimbursement rates for both mental health and 
substance use disorder providers and medical/surgical providers against 
an external benchmark of reimbursement rates, such as Medicare, may 
help identify whether the underlying methodology used to determine the 
plan's or issuer's reimbursement rates warrants additional review. The 
2020 MHPAEA Self-Compliance Tool notes that substantially disparate 
results are a red flag that a plan or issuer may be imposing an NQTL on 
mental health and substance use disorder benefits in a way that fails 
to satisfy the parity requirements. Other warning signs of potential 
noncompliance identified in the 2020 MHPAEA Self-Compliance Tool 
include generally paying at or near Medicare reimbursement rates for 
mental health or substance use disorder benefits, while paying much 
more than Medicare reimbursement rates for medical/surgical benefits, 
and reimbursing psychiatrists, on average, less than medical/surgical 
physicians for the same evaluation and management codes.\70\
---------------------------------------------------------------------------

    \70\ 2020 MHPAEA Self-Compliance Tool, at p. 21, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
---------------------------------------------------------------------------

    The 2020 MHPAEA Self-Compliance Tool also provides many compliance 
tips on how an NQTL should be analyzed. For example, a plan or issuer 
should have information available to substantiate how factors are used 
to design or apply any specific NQTL to both medical/surgical benefits 
and mental health or substance use disorder benefits. The plan or 
issuer should be clear as to whether and why any factors were given 
more weight than others and should be able to explain any variation in 
the application of a guideline or evidentiary standard, including the 
process and factors relied upon for establishing the variation. To 
comply with MHPAEA's parity requirements, plans and issuers must adopt 
measures for mental health and substance use disorder providers that 
are at least comparable to and no more stringently applied (with regard 
to limiting the scope and duration of a participant's, beneficiary's, 
or enrollee's benefits under the plan or coverage) than those applied 
to medical/surgical providers. This includes taking steps to help 
address provider shortages, ensure an adequate network of mental health 
and substance use disorder providers, and ensure reasonable patient 
wait times to avoid noncompliance with MHPAEA's parity requirements. By 
providing a basic framework for plans and issuers to do a stepwise 
analysis and providing additional warning signs and tips, the 2020 
MHPAEA Self-Compliance Tool has provided additional guidance for plans 
and issuers to comply with the requirements of MHPAEA with respect to 
NQTLs.

D. The Consolidated Appropriations Act, 2021 and Related Guidance

    The CAA, 2021 was enacted on December 27, 2020.\71\ Section 203 of 
Title II of Division BB of the CAA, 2021 amended MHPAEA, in part, by 
adding Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act 
section 2726(a)(8) to expressly require group health plans and health 
insurance issuers offering group or individual health insurance 
coverage that include both medical/surgical benefits and mental health 
or substance use disorder benefits and impose NQTLs on mental health or 
substance use disorder benefits to perform and document their 
comparative analyses of the design and application of NQTLs.\72\ 
Further, plans and issuers are required to make their comparative 
analyses and other applicable information available to the Departments 
or applicable State authorities, upon request.\73\ The comparative 
analysis requirement took effect on February 10, 2021, 45 days after 
the date of enactment of the CAA, 2021.
---------------------------------------------------------------------------

    \71\ Public Law 116-260, 134 Stat. 1182 (Dec. 27, 2020).
    \72\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), and 
PHS Act section 2726(a)(8)(A).
    \73\ Id.
---------------------------------------------------------------------------

    In order to advance compliance with MHPAEA, the CAA, 2021 states 
that the Departments shall request that a group health plan or health 
insurance issuer

[[Page 51561]]

offering group or individual health insurance coverage submit 
comparative analyses, with respect to a plan or coverage, that involve 
potential MHPAEA violations, in response to complaints against a plan 
or coverage regarding potentially noncompliant NQTLs, and in any other 
instances that the Departments determine appropriate.\74\ These 
comparative analyses must include:
---------------------------------------------------------------------------

    \74\ Code section 9812(a)(8)(B)(i), ERISA section 
712(a)(8)(B)(i), and PHS Act section 2726(a)(8)(B)(i).
---------------------------------------------------------------------------

    (1) the specific plan or coverage terms or other relevant terms 
regarding the NQTLs and a description of all mental health and 
substance use disorder benefits and medical/surgical benefits to which 
each such term applies in each benefit classification;
    (2) the factors used to determine how the NQTLs will apply to 
mental health or substance use disorder benefits and medical/surgical 
benefits;
    (3) the evidentiary standards used to develop the identified 
factors, when applicable, provided that each factor shall be defined, 
and any other source or evidence relied upon to design and apply the 
NQTLs to mental health or substance use disorder benefits and medical/
surgical benefits;
    (4) the comparative analyses demonstrating that the processes, 
strategies, evidentiary standards, and other factors used to apply the 
NQTLs to mental health or substance use disorder benefits, as written 
and in operation, are comparable to, and are applied no more 
stringently than those used to apply the NQTLs to medical/surgical 
benefits in the benefits classification; and
    (5) the specific findings and conclusions reached by the plan or 
issuer, including any results of the analyses that indicate that the 
plan or coverage is or is not in compliance with MHPAEA 
requirements.\75\
---------------------------------------------------------------------------

    \75\ Code section 9812(a)(8)(A)(i)-(v), ERISA section 
712(a)(8)(A)(i)-(v), and PHS Act section 2726(a)(8)(A)(i)-(v).
---------------------------------------------------------------------------

    The CAA, 2021 further sets forth a process by which the Departments 
must evaluate the requested NQTL comparative analyses and enforce the 
comparative analyses requirements. If the relevant Department with 
jurisdiction over the group health plan (or health insurance coverage) 
determines that a plan or issuer has not provided sufficient 
information for the relevant Department to review the comparative 
analyses, the CAA, 2021 provides that the Departments shall specify the 
information the plan or issuer must submit to be responsive to the 
request.\76\ In instances in which the Departments have reviewed the 
requested comparative analyses and determined that the plan or issuer 
is not in compliance with MHPAEA, the plan or issuer must specify the 
actions it will take to come into compliance and submit additional 
comparative analyses that demonstrate compliance not later than 45 days 
after the initial determination of noncompliance.\77\ Following the 45-
day corrective action period, if the relevant Department makes a final 
determination that the plan or issuer is still not in compliance, the 
plan or issuer must notify all individuals enrolled in the plan or 
coverage of this determination, not later than 7 days after such final 
determination.\78\
---------------------------------------------------------------------------

    \76\ Code section 9812(a)(8)(B)(ii), ERISA section 
712(a)(8)(B)(ii), and PHS Act section 2726(a)(8)(B)(ii).
    \77\ Code section 9812(a)(8)(B)(iii)(I), ERISA section 
712(a)(8)(B)(iii)(I), and PHS Act section 2726(a)(8)(B)(iii)(I).
    \78\ Id.
---------------------------------------------------------------------------

    The CAA, 2021 also requires the Departments, after review of the 
comparative analyses, to share information on findings of compliance 
and noncompliance with the State where the plan is located or the State 
where the issuer is licensed to do business, in accordance with any 
information sharing agreement entered into with the State.\79\ 
Additionally, as explained in more detail later in this preamble, the 
CAA, 2021 requires the Departments to submit annually to Congress and 
make publicly available a report summarizing the comparative analyses 
requested by the Departments. The report must state, in part, whether 
each plan or issuer submitted sufficient information to permit review; 
whether and why the plan or issuer is in compliance with MHPAEA; the 
specific information each plan or issuer needed to submit to allow for 
a review of their comparative analysis; and, for each plan or issuer 
the Departments determined not to be in compliance, specifications of 
the actions that must be taken to come into compliance.\80\
---------------------------------------------------------------------------

    \79\ Code section 9812(a)(8)(C)(iii), ERISA section 
712(a)(8)(C)(iii), and PHS Act section 2726(a)(8)(C)(iii).
    \80\ Code section 9812(a)(8)(B)(iv), ERISA section 
712(a)(8)(B)(iv), and PHS Act section 2726(a)(8)(B)(iv).
---------------------------------------------------------------------------

    On April 2, 2021, the Departments issued FAQs Part 45 to provide 
guidance on the amendments to MHPAEA made by the CAA, 2021 and to 
promote compliance by plans and issuers. FAQs Part 45 underscores that, 
for a comparative analysis to be treated as sufficient under the CAA, 
2021, it must contain a detailed, written, and reasoned explanation of 
the specific plan terms and practices at issue and include the bases 
for the plan's or issuer's conclusion that the NQTL complies with 
MHPAEA. As FAQs Part 45 explains, at a minimum, a sufficient NQTL 
comparative analysis must include a robust discussion of certain 
elements, including a clear description of the specific NQTL; plan 
terms; policies at issue; and identification of any factors, 
evidentiary standards, sources, strategies, and processes considered in 
the design and application of the NQTL and in determining which 
benefits, including both mental health and substance use disorder 
benefits and medical/surgical benefits, are subject to the NQTL. To the 
extent a plan or issuer defines any of the factors, evidentiary 
standards, strategies, or processes in a quantitative manner, its 
analysis should include the precise definitions used and any supporting 
sources. The analysis also should explain whether the plan or issuer 
imposes any variation in the application of a guideline or standard 
between mental health and substance use disorder benefits and medical/
surgical benefits, and if so, should describe the processes and factors 
used for establishing that variation. The plan or issuer should provide 
a reasoned discussion, including citations or any specific evidence of 
its findings and conclusions, as to the comparability of the processes, 
strategies, evidentiary standards, factors, and sources identified 
within each affected classification and their relative stringency, both 
as written and in operation.
    FAQs Part 45 highlights that a general statement of compliance by 
plans and issuers, coupled with a conclusory reference to broadly 
stated processes, strategies, evidentiary standards, or other factors 
is insufficient to meet the statutory requirements for an NQTL 
comparative analysis. Accordingly, a comparative analysis that consists 
of conclusory or generalized statements, without specific supporting 
evidence and detailed explanations, or the production of a large volume 
of documents without a clear explanation of how and why each document 
is relevant to the comparative analysis, fails to satisfy the statutory 
requirements.
    In addition, FAQs Part 45 provides guidance as to the types of 
documents that plans and issuers should be prepared to make available 
to support the analysis and conclusions reached in their comparative 
analyses. This includes records documenting NQTL processes and 
detailing how the plan or

[[Page 51562]]

issuer applies NQTLs to both medical/surgical and mental health or 
substance use disorder benefits, documents and other information 
relevant to the factors identified, and samples of covered and denied 
mental health or substance use disorder and medical/surgical benefits 
claims. FAQs Part 45 also highlights several NQTLs that DOL anticipated 
focusing on in the near term.
    FAQs Part 45 also notes that under the CAA, 2021, plans and issuers 
must make available their respective comparative analyses of NQTLs and 
other applicable information to the applicable State authority upon 
request. Additionally, plans and issuers must make the comparative 
analyses and other applicable information required by the CAA, 2021 
available upon request to participants and beneficiaries in plans 
subject to ERISA and to participants, beneficiaries, and enrollees in 
all non-grandfathered group health plans and non-grandfathered group or 
individual health insurance coverage upon request in connection with an 
appeal of an adverse benefit determination. If a provider or other 
individual is acting as a patient's authorized representative, the 
provider or other authorized representative may request these 
documents.

E. Reports to Congress

    DOL is required to send Congress a biennial report on MHPAEA 
implementation,\81\ and the Departments are required to send Congress 
an annual report on NQTL comparative analyses reviews.\82\ To satisfy 
these requirements, on January 25, 2022, the Departments issued the 
first report to Congress since the enactment of the CAA, 2021 (2022 
MHPAEA Report to Congress).\83\ The 2022 MHPAEA Report to Congress 
contains extensive descriptions of the Departments' MHPAEA enforcement 
efforts, outreach efforts, consumer and compliance assistance efforts, 
and guidance to interested parties, including information related to 
the requirement that plans and issuers perform and document comparative 
analyses with respect to the design and application of NQTLs.
---------------------------------------------------------------------------

    \81\ ERISA section 712(f).
    \82\ Section 203 of the CAA, 2021 (Pub. L. 116-260, 134 Stat. 
1182 (Dec. 27, 2020)). In addition, the Departments were required to 
send Congress an annual report on complaints and investigations 
concerning compliance with the requirements of MHPAEA from 2017 
until 2021. See section 13003 of the 21st Century Cures Act (Cures 
Act), Public Law 114-255, 130 Stat. 1033 (Dec. 13, 2016), as amended 
by the Substance Use-Disorder Prevention that Promotes Opioid 
Recovery and Treatment for Patients and Communities Act, Public Law 
115-271, 132 Stat. 3894 (Oct. 24, 2018).
    \83\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
---------------------------------------------------------------------------

    Contemporaneously with these proposed rules, the Departments are 
issuing the second report to Congress since the enactment of the CAA, 
2021, the MHPAEA Comparative Analysis Report to Congress, July 2023 
(2023 MHPAEA Report to Congress).\84\ The 2023 MHPAEA Report to 
Congress details efforts by the Departments to implement and enforce 
the amendments to MHPAEA made by the CAA, 2021. The 2023 MHPAEA Report 
to Congress focuses on the Departments' enforcement efforts regarding 
NQTLs during the second year of CAA, 2021 implementation, looks broadly 
at the 18-month period since plans and issuers were first required to 
make their comparative analyses and other applicable information 
available on request, discusses common deficiencies in comparative 
analyses submitted by plans and issuers, and explores examples of 
results that the Departments have achieved through enforcement.
---------------------------------------------------------------------------

    \84\ 2023 MHPAEA Report to Congress, July 2023, available at 
www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf and https://www.cms.gov/cciio/resources/forms-reports-and-other-resources#mental-health-parity.
---------------------------------------------------------------------------

    The 2023 MHPAEA Report to Congress notes that nearly all of the 
comparative analyses reviewed by the Departments during the relevant 
time period contained insufficient information upon initial receipt and 
identifies common deficiencies in the comparative analyses prepared by 
plans and issuers. Specifically, many initial responders seemed 
unprepared to submit their comparative analyses upon request and some 
plans did not complete or start a comparative analysis until after one 
was requested. Some comparative analyses lacked specific supporting 
evidence, detailed explanations, or sufficient detail to draw 
meaningful comparisons. For example, many plans' comparative analyses 
failed to adequately explain whether or how factors were comparably 
applied to mental health and substance use disorder benefits and to 
medical/surgical benefits. Also, many plans and issuers provided 
supporting documents for which the relevance and probative value was 
not readily apparent.
    Some plans also failed to identify the specific mental health or 
substance use disorder benefits and medical/surgical benefits or MHPAEA 
benefit classification to which an NQTL applied. Additionally, some 
comparative analyses failed to identify or define every relevant 
factor. In other instances, plans failed to demonstrate the application 
of identified factors in the design of an NQTL, and most comparative 
analyses failed to evaluate the relative stringency of how the NQTL was 
applied to mental health or substance use disorder benefits versus 
medical/surgical benefits. When data was included in a comparative 
analysis, the data often lacked meaning because the plan or issuer did 
not provide a description of its source, how the source was selected, 
or information about underlying calculations. Many comparative analyses 
for standards to participate in a network did not adequately address 
apparent differences in access standards for medical/surgical providers 
as opposed to mental health and substance use disorder providers, such 
as different time and distance standards or provider-to-member ratios.

F. MHPAEA Opt Out for Self-Funded Non-Federal Governmental Plans

    Prior to the enactment of the Affordable Care Act, PHS Act section 
2721(b)(2), as added by the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA), permitted sponsors of self-funded, 
non-Federal governmental plans to elect to exempt those plans from 
(that is, ``opt out of'') any or all of the following requirements of 
title XXVII of the PHS Act:
    1. Limitations on preexisting condition exclusion periods under PHS 
Act section 2701 (redesignated as section 2704 by the Affordable Care 
Act).
    2. Requirements for special enrollment periods under PHS Act 
section 2701 (redesignated as section 2704 by the Affordable Care Act).
    3. Prohibitions against discriminating against individual 
participants and beneficiaries based on health status (but not 
including provisions added by the Genetic Information Nondiscrimination 
Act of 2008) under PHS Act section 2702 (redesignated as section 2705 
by the Affordable Care Act).
    4. Standards relating to benefits for newborns and mothers under 
PHS Act section 2704 (redesignated as section 2725 by the Affordable 
Care Act).
    5. Parity in the application of certain limits to mental health and 
substance use disorder benefits (including requirements of MHPAEA) 
under PHS Act section 2705 (redesignated as section 2726 by the 
Affordable Care Act).
    6. Required coverage for reconstructive surgery following 
mastectomies under PHS Act section

[[Page 51563]]

2706 (redesignated as section 2727 by the Affordable Care Act).
    7. Coverage of dependent students on a medically necessary leave of 
absence under PHS Act section 2707 (redesignated as section 2728 by the 
Affordable Care Act).
    The Affordable Care Act redesignated PHS Act section 2721 as 
section 2722 and amended PHS Act section 2722(a)(2) to allow sponsors 
of self-funded, non-Federal governmental plans to only opt out of 
requirements categories 4-7 listed above.
    In response to the Affordable Care Act amendments, HHS issued 
guidance on September 21, 2010, indicating that, for plan years 
beginning on or after September 23, 2010, plan sponsors of non-
collectively bargained plans could elect to be exempt only from 
requirements categories 4-7 listed above and that requirements 
categories 1-3 were no longer available for exemption.\85\ Group health 
plans maintained pursuant to a collective bargaining agreement ratified 
before March 23, 2010, and that had been exempted from any of the first 
three requirements categories listed above, would not have to come into 
compliance with those requirements categories until the commencement of 
the first plan year following the expiration of the last plan year 
governed by the collective bargaining agreement.
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    \85\ Office of Consumer Information and Insurance Oversight, 
Amendments to the HIPAA opt-out provision (formerly section 
2721(b)(2) of the Public Health Service Act) made by the Affordable 
Care Act (Sept. 21, 2010), available at www.cms.gov/CCIIO/Resources/Files/Downloads/opt_out_memo.pdf.
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    On March 21, 2014, HHS published proposed regulations in the 
Federal Register that proposed to revise the provisions of 45 CFR 
146.180 to reflect the amendments made by the Affordable Care Act, 
consistent with the September 21, 2010, guidance.\86\ On May 27, 2014, 
HHS finalized those proposed regulations with modifications related to 
how opt out elections must be filed.\87\
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    \86\ 79 FR 15808 (Mar. 21, 2014).
    \87\ 79 FR 30240 (May 27, 2014).
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    The CAA, 2023,\88\ enacted on December 29, 2022, eliminated the 
election for self-funded, non-Federal governmental plans to opt out of 
MHPAEA.\89\ Specifically, PHS Act section 2722(a)(2), as amended by the 
CAA, 2023, provides that no election to opt out of compliance with the 
requirements of MHPAEA may be made on or after December 29, 2022 (the 
date of enactment of the CAA, 2023) and that generally no such election 
with respect to MHPAEA expiring on or after June 27, 2023 (the date 
that is 180 days after the date of enactment of the CAA, 2023), may be 
renewed.\90\ In addition, PHS Act section 2722(a)(2), as amended by the 
CAA, 2023, includes an exception for certain collectively bargained 
plans. Specifically, a self-funded, non-Federal governmental plan that 
is subject to multiple collective bargaining agreements of varying 
lengths and that has a MHPAEA opt-out election in effect on December 
29, 2022, that expires on or after June 27, 2023, may extend such 
election until the date on which the term of the last collective 
bargaining agreement expires.\91\
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    \88\ Public Law 117-328, 136 Stat. 4459.
    \89\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321, 
Public Law 117-328, 136 Stat. 4459. As a result of the CAA, 2023 
amendments to PHS Act section 2722(a)(2), self-funded, non-Federal 
governmental plan sponsors may opt out of only the following three 
PHS Act requirement categories: Standards relating to benefits for 
newborns and mothers (PHS Act section 2725), Required coverage for 
reconstructive surgery following mastectomies (PHS Act section 
2727), and Coverage for dependent students on a medically necessary 
leave of absence (PHS Act section 2728).
    \90\ PHS Act section 2722(a)(2)(F)(i).
    \91\ PHS Act section 2722(a)(2)(F)(ii).
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    HHS issued a Bulletin on June 7, 2023, that informs self-funded, 
non-Federal governmental plans and other interested parties about the 
CAA, 2023 amendments to PHS Act section 2722(a)(2), outlines when plans 
that currently opt out of compliance with MHPAEA are required to come 
into compliance with these requirements, and specifies the form and 
manner for submission of opt-out renewal election requests \92\ to 
operationalize the special rule for certain collectively bargained 
plans.\93\
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    \92\ See 45 CFR 146.180(b) and (f).
    \93\ Center for Consumer Information and Insurance Oversight, 
Insurance Standards Bulletin Series--INFORMATION, Sunset of MHPAEA 
opt-out provision for self-funded, non-Federal governmental group 
health plans (June 7, 2023), available at https://www.cms.gov/files/document/hipaa-opt-out-bulletin.pdf.
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II. Overview of the Proposed Rules--Departments of the Treasury, Labor, 
and HHS

    The Departments are proposing these rules to further MHPAEA's 
fundamental goal of ensuring that limitations on mental health and 
substance use disorder benefits provided by group health plans or 
health insurance issuers offering group or individual health insurance 
coverage are no more restrictive than the predominant limitations 
applicable to substantially all medical/surgical benefits, and to 
further implement important new statutory requirements to ensure that 
plans and issuers document their NQTL comparative analyses and other 
applicable information to demonstrate whether the processes, 
strategies, evidentiary standards, and other factors used to apply an 
NQTL to mental health and substance use disorder benefits are 
comparable to, and applied no more stringently than, those used to 
apply the limitation with respect to medical/surgical benefits in the 
same benefit classification. The goal of these proposed rules is to 
ensure that individuals with mental health conditions and substance use 
disorders can benefit from the full protections afforded to them under 
MHPAEA, while offering clear guidance to plans and issuers on how to 
comply with MHPAEA's requirements.
    These proposed rules would be codified in 26 CFR part 54, 29 CFR 
part 2590, and 45 CFR parts 146 and 147. Specifically, these proposed 
rules would amend certain provisions of existing MHPAEA regulations at 
26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136 to incorporate 
new and revised definitions of key terms, as well as to specify 
additional steps that plans and issuers must take to meet their 
obligations under MHPAEA. These proposed rules also would add a new 
regulation at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 
establishing minimum standards for developing NQTL comparative analyses 
to assess whether an NQTL, as written and in operation, complies with 
MHPAEA's requirements. In addition, these proposed rules would set 
forth the content elements of comparative analyses and the timeframe 
for plans and issuers to respond to a request from the Departments to 
submit their comparative analyses. Additionally, HHS proposes an 
amendment to 45 CFR 147.160 to specify that proposed regulations at 45 
CFR 146.137 would apply to individual health insurance coverage offered 
by a health insurance issuer in the same manner and to the same extent 
that this proposed provision would apply to health insurance coverage 
offered by a health insurance issuer in connection with a group health 
plan in the large group market.\94\ Consistent with the existing text 
at 45 CFR 147.160(a), HHS also proposes to extend the same requirements 
and framework outlined in the proposed amendments to 45 CFR

[[Page 51564]]

146.136 in these proposed rules to individual health insurance coverage 
in the same manner and to the same extent as such proposed amendments, 
if finalized, would apply to group health insurance coverage. Finally, 
HHS also proposes amendments to 45 CFR 146.180 to reflect the sunset of 
the election option for self-funded, non-Federal governmental plans to 
opt out of compliance with MHPAEA, consistent with changes made by the 
CAA, 2023 to PHS Act section 2722(a)(2).\95\
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    \94\ Non-grandfathered health insurance coverage offered by a 
health insurance issuer in connection with a group health plan in 
the small group market is required to comply with the requirements 
under PHS Act section 2726 to satisfy the requirement to provide 
coverage for mental health and substance use disorder services, 
including behavioral health treatment, as part of EHB, and as such 
would also be required to comply with the comparative analysis 
requirements proposed under 45 CFR 146.137. See 45 CFR 
156.115(a)(3).
    \95\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321, 
Public Law 117-328, 136 Stat. 4459 (Dec. 29. 2022).
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    The Departments are soliciting public comment on all aspects of 
these proposed rules.

A. Amendments to Existing Regulations at 26 CFR 54.9812-1, 29 CFR 
2590.712, and 45 CFR 146.136

1. Purpose Section--26 CFR 54.9812-1(a)(1), 29 CFR 2590.712(a)(1), and 
45 CFR 146.136(a)(1)
    In general, the fundamental purpose of MHPAEA, its existing 
implementing regulations, and these proposed rules is to ensure that 
participants and beneficiaries in a group health plan or in group 
health insurance coverage offered by a health insurance issuer that 
offers mental health or substance use disorder benefits are not subject 
to greater restrictions, such as more restrictive lifetime or annual 
dollar limits, financial requirements, or treatment limitations, when 
seeking those benefits than when they seek medical/surgical benefits 
under the terms of the plan or coverage. This should serve as the 
guiding principle for group health plans and health insurance issuers 
offering group health insurance coverage as they work to comply with 
MHPAEA and its implementing regulations. While MHPAEA generally does 
not mandate coverage of mental health or substance use disorder 
benefits, these proposed rules aim to better ensure that plans and 
issuers that cover such benefits implement MHPAEA in accordance with 
its express terms and fundamental purpose.
    Accordingly, the Departments propose to add a purpose section to 
the regulations, specifying that a fundamental purpose of MHPAEA and 
its implementing regulations is to ensure that participants and 
beneficiaries covered under a plan or health insurance coverage that 
offers mental health or substance use disorder benefits are not subject 
to more restrictive lifetime or annual dollar limits, financial 
requirements, or treatment limitations with respect to covered mental 
health and substance use disorder benefits than the predominant dollar 
limits, financial requirements, or treatment limitations that are 
applied to substantially all medical/surgical benefits covered by the 
plan or coverage.\96\ The purpose section would further state that in 
complying with the provisions of MHPAEA and its implementing 
regulations, plans and issuers must not design or apply financial 
requirements and treatment limitations that impose a greater burden on 
access (that is, are more restrictive) to mental health and substance 
use disorder benefits under the plan or coverage than plans and issuers 
impose on access to generally comparable medical/surgical benefits. 
Further, these proposed rules provide that MHPAEA and its implementing 
regulations should be interpreted in a manner that is consistent with 
this purpose. The Departments seek comment on the proposed addition of 
a purpose section to the implementing regulations and the proposed 
language.
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    \96\ While the Departments recognize the relevant statutory text 
for dollar limits does not use the term ``predominant'' and 
different rules apply, the purpose of MHPA 1996 was similar and 
therefore the provisions for dollar limits should generally be read 
and applied in a similar manner. See, e.g., Government 
Accountability Office (GAO), Mental Health Parity Act, May 2000, at 
p. 13, available at https://www.gao.gov/assets/hehs-00-95.pdf (``To 
help address the discrepancies in coverage between mental and other 
illnesses, the Congress passed the Mental Health Parity Act of 
1996.'').
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2. Meaning of Terms--26 CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 
45 CFR 146.136(a)(2)
    The Departments propose to amend the 2013 final regulations to 
revise several existing definitions, add new definitions of key terms, 
and add language to specify that, except where the context clearly 
indicates otherwise, the definitions in 26 CFR 54.9812-1(a)(2), 29 CFR 
2590.712(a)(2), and 45 CFR 146.136(a)(2) would also apply to the new 
proposed comparative analysis requirements set forth in proposed 26 CFR 
54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137, which are discussed 
in more detail later in this preamble.\97\
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    \97\ To accommodate the proposed addition of the ``purpose'' 
provision in paragraph (a)(1), these proposed rules would also 
redesignate the definitions from paragraph (a) to paragraph (a)(2) 
of 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR 146.136.
---------------------------------------------------------------------------

    Under MHPAEA, the term ``medical or surgical benefits'' means 
benefits with respect to medical or surgical services, as defined under 
the terms of the plan or coverage.\98\ This statutory definition 
further clarifies that the term does not include mental health or 
substance use disorder benefits.\99\ The terms ``mental health 
benefits'' and ``substance use disorder benefits'' are defined by the 
statute to mean benefits with respect to services for mental health 
conditions or substance use disorders, respectively, as defined under 
the terms of the plan and in accordance with applicable Federal and 
State law.\100\ The definitions of all three of these terms included in 
the 2013 final regulations further provide that any condition defined 
by the plan or coverage as being or as not being a medical/surgical 
condition, mental health condition, or substance use disorder, 
respectively, must be defined to be consistent with generally 
recognized independent standards of current medical practice (for 
example, the most current version of the Diagnostic and Statistical 
Manual of Mental Disorders (DSM), the most current version of the 
International Classification of Diseases (ICD), or State guidelines).
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    \98\ Code section 9812(e)(3), ERISA section 712(e)(3), and PHS 
Act section 2726(e)(3).
    \99\ Id.
    \100\ See Code section 9812(e)(4)-(5), ERISA section 712(e)(4)-
(5), and PHS Act section 2726(e)(4)-(5).
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    The Departments have received questions from interested parties 
about what it means for a definition of a mental health condition or 
substance use disorder to be ``consistent with'' generally recognized 
independent standards of current medical practice, and whether, for 
purposes of MHPAEA, a condition is a medical condition, a mental health 
condition, or a substance use disorder when State insurance law and 
generally recognized independent standards of current medical practice 
conflict. In response to these requests for further guidance, the 
Departments propose to amend the existing regulatory definitions of the 
terms ``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits'' to address these questions and help 
delineate more clearly what is a medical/surgical benefit, a mental 
health benefit, or a substance use disorder benefit for purposes of 
complying with MHPAEA.
    Specifically, the Departments propose to amend the definition of 
the term ``medical/surgical benefits'' to mean benefits with respect to 
items or services for medical conditions or surgical procedures, as 
defined under the terms of the group health plan (or health insurance 
coverage offered by an issuer in connection with such a plan) and in 
accordance with applicable Federal and State law, but does not include 
mental health benefits or substance use disorder benefits. These 
proposed rules

[[Page 51565]]

would also amend this regulatory definition of ``medical/surgical 
benefits'' to provide that, notwithstanding the first sentence, any 
condition or procedure defined by the plan or coverage as being or not 
being a medical condition or surgical procedure must be defined 
consistent with generally recognized independent standards of current 
medical practice (for example, the most current version of the ICD). To 
the extent that generally recognized independent standards of current 
medical practice do not address whether a condition or procedure is a 
medical condition or surgical procedure, plans and issuers may define 
the condition or procedure as medical/surgical benefits, as long as 
such definitions are in accordance with applicable Federal and State 
law.
    The Departments propose to remove the reference to State guidelines 
in the definition of medical/surgical benefits. This proposed amendment 
is more consistent with the statute, and importantly, would no longer 
allow plans and issuers to rely on standards that are not applicable to 
the plan or coverage at issue in applying financial requirements or 
treatment limitations to mental health and substance use disorder 
benefits.\101\ Generally recognized independent standards of current 
medical practice more accurately align with how a plan should 
characterize benefits for purposes of compliance with MHPAEA, and this 
provision would minimize situations where contradictions with State 
guidelines create conflicts and improperly limit the protections under 
MHPAEA.
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    \101\ For example, some self-insured ERISA plans have argued 
that they can rely on State insurance law definitions that 
characterize a particular condition as a medical condition, mental 
health condition, or substance use disorder based on State 
guidelines despite the fact that State insurance law is generally 
not applicable to self-insured ERISA plans and such plans do not 
otherwise consistently comply with State insurance law.
---------------------------------------------------------------------------

    The Departments propose to make similar changes to the definitions 
of ``mental health benefits'' and ``substance use disorder benefits'' 
by amending the first sentences of these definitions, removing the 
reference to State guidelines, and clarifying that, notwithstanding the 
terms of a plan or coverage, any condition or disorder defined by the 
plan or coverage as being or not being a mental health condition or a 
substance use disorder must be defined to be consistent with generally 
recognized independent standards of current medical practice. 
Specifically, under these proposed rules, to be consistent with 
generally recognized independent standards of current medical practice, 
the plan's or coverage's definition of ``mental health benefits'' must 
include all conditions covered under the plan or coverage, except for 
substance use disorders, that fall under any of the diagnostic 
categories listed in the mental, behavioral, and neurodevelopmental 
disorders chapter (or equivalent chapter) of the most current version 
of the ICD or that are listed in the most current version of the DSM. 
Similarly, the plan's or coverage's definition of ``substance use 
disorders'' must include all disorders covered under the plan or 
coverage that fall under any of the diagnostic categories listed as a 
mental or behavioral disorder due to psychoactive substance use (or 
equivalent category) in the mental, behavioral, and neurodevelopmental 
disorders chapter (or equivalent chapter) of the most current version 
of the ICD or that are listed as a Substance-Related and Addictive 
Disorder (or equivalent category) in the most current version of the 
DSM.\102\ Similar to the proposed revisions to the definition of 
``medical/surgical benefits,'' the proposed amended definitions of 
``mental health benefits'' and ``substance use disorder benefits'' also 
provide that, to the extent generally recognized independent standards 
of current medical practice do not address whether a condition or 
disorder is a mental health condition or substance use disorder, 
respectively, plans and issuers may define the condition or disorder in 
accordance with applicable Federal and State law.
---------------------------------------------------------------------------

    \102\ Substance use disorders that fall under any of the 
diagnostic categories listed in the mental and behavioral health 
disorders chapter of the most current version of the ICD or that are 
listed in the most current version of the DSM would be excluded from 
the definition of the term ``mental health benefits'' because they 
would be included in the definition of the term ``substance use 
disorder benefits.''
---------------------------------------------------------------------------

    The ICD would be defined as the World Health Organization's 
International Classification of Diseases adopted by HHS through 45 CFR 
162.1002 or successor regulations, and the DSM would be defined as the 
American Psychiatric Association's Diagnostic and Statistical Manual of 
Mental Disorders. Because the proposed amendments to the definitions of 
``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits,'' refer to the most current version 
of the ICD or DSM, respectively, these proposed rules also explain how 
to determine which version is the most current as of a particular date. 
This serves to provide plans and issuers with clarity on when they 
would be required to begin to rely on a new version of the ICD or DSM 
after it is released, and sufficient time after the adoption of an 
updated version of the ICD or DSM to ensure that the terms of their 
plan or coverage are consistent with any changes made from the previous 
version. The definitions would specify that, for purposes of compliance 
with these proposed rules, the most current version of the ICD or DSM, 
respectively, would be that which is applicable no earlier than on the 
date that is 1 year before the first day of the applicable plan year.
    These proposed rules also would permit plans and issuers to use a 
more current version of the ICD or DSM than the version in effect 1 
year before the first day of the applicable plan year. In addition, the 
Departments recognize that future versions of the ICD or DSM may 
include revisions to the categories of conditions or disorders or 
chapters listed in the proposed amended definitions for ``mental health 
benefits'' and ``substance use disorder benefits,'' which could affect 
the characterization of a benefit under MHPAEA. Therefore, the proposed 
amended definitions for these two terms also refer to ``equivalent 
categories'' and ``equivalent chapters'' to help plans and issuers 
understand how they would apply the proposed definitions, if finalized, 
and how to implement such changes if they are made in the future. The 
Departments request comments on this aspect of these proposed amended 
definitions.
    To ensure parity between mental health and substance use disorder 
benefits and medical/surgical benefits, it is critical that plans and 
issuers define mental health conditions and substance use disorders in 
a manner consistent with the purposes of MHPAEA. While plans and 
issuers have some discretion in defining mental health benefits and 
substance use disorder benefits, this discretion must be exercised in a 
manner that comports with generally recognized independent standards of 
current medical practice. Moreover, the proposed amended definitions 
for ``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits'' specify that plans and issuers may 
use applicable State law to inform their definitions, but only to the 
extent that those laws are consistent with and do not contradict 
generally recognized independent standards of current medical practice 
(or to the extent these standards do not address whether a condition or 
disorder is a medical condition or surgical procedure or a mental 
health condition or substance use disorder). Under both the

[[Page 51566]]

2013 final regulations and these proposed rules, plans and issuers must 
be prepared to provide supporting documentation to demonstrate that the 
way the plan or issuer has defined a condition or disorder for purposes 
of MHPAEA is consistent with generally recognized independent standards 
of current medical practice. The Departments solicit comments on 
whether any additional clarification is needed on how State law may 
interact with the proposed amended definitions for these key terms.
    As discussed earlier in this section of the preamble, the 
Departments are proposing these amendments to the definitions of the 
terms ``medical/surgical benefits,'' ``mental health benefits,'' and 
``substance use disorder benefits'' in part to ensure that the use of 
State laws does not prevent the application of MHPAEA's protections 
with respect to conditions or disorders that are recognized as mental 
health conditions and substance use disorders under generally 
recognized independent standards of current medical practice. The 
Departments recognize that States may enact various laws for different 
purposes. Therefore, the Departments are proposing to make clear that 
when a plan or issuer relies upon a State law to inform its definitions 
for purposes of MHPAEA, the plan or issuer must ensure that definitions 
operate to apply MHPAEA's protections to mental health conditions and 
substance use disorders, as they are generally defined by the medical 
community. The Departments also clarify that under the proposed 
framework, to the extent a State law or generally recognized 
independent standards of current medical practice define a condition or 
disorder as a mental health condition or substance use disorder, plans 
and issuers must treat all benefits for the condition or disorder as 
mental health benefits or substance use disorder benefits, 
respectively, for purposes of analyzing parity and compliance with 
MHPAEA. The Departments solicit comments on any potential challenges of 
applying MHPAEA to all benefits for a mental health condition or 
substance use disorder where items and services can be delivered for 
both medical conditions or surgical procedures and mental health 
conditions or substance use disorders, and whether additional 
clarifications or modifications to the proposed definitions are 
necessary.
    Interested parties also have requested that the Departments confirm 
whether specific conditions are mental health conditions for purposes 
of MHPAEA. Under these proposed rules, as under the existing MHPAEA 
regulations and section 13007 of the Cures Act,\103\ the Departments 
confirm that eating disorders, such as anorexia nervosa, bulimia 
nervosa, and binge-eating disorder, are mental health conditions under 
generally recognized independent standards of current medical 
practice.\104\ Therefore, benefits for treatment of eating disorders 
are mental health benefits for purposes of MHPAEA and may not be 
defined as medical/surgical benefits under a plan or coverage.\105\
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    \103\ Section 13007 of the Cures Act states that, if a plan or 
an issuer offering group or individual health insurance coverage 
provides coverage for eating disorder benefits, including 
residential treatment, such group health plan or health insurance 
issuer shall provide such benefits consistent with the requirements 
of MHPAEA.
    \104\ See, e.g., Diagnostic and Statistical Manual of Mental 
Disorders (5th ed.), section II, Feeding and Eating Disorders; ICD-
10, Chapter 05.
    \105\ The Departments previously clarified that eating disorders 
are mental health conditions, and therefore treatment of an eating 
disorder is a mental health benefit, in FAQs Part 38, Q1. See DSM 
(5th ed.), section II, Feeding and Eating Disorders.
---------------------------------------------------------------------------

    Similarly, in response to questions from interested parties, these 
proposed rules would make clear that, for purposes of MHPAEA, ASD is a 
mental health condition under generally recognized independent 
standards of current medical practice.\106\ Therefore, under the 
proposed amended definition and framework established in these proposed 
rules, if a plan or issuer generally provides benefits for ASD, ASD may 
not be defined by the plan or issuer as a medical/surgical condition. 
In addition, the plan or issuer may not impose any financial 
requirements or treatment limitations in a classification on benefits 
for ASD treatment that are more restrictive than the predominant 
financial requirements or treatment limitations that apply to 
substantially all medical/surgical benefits in the classification. The 
plan or issuer also may not impose any financial requirements or 
treatment limitations, including exclusions for Applied Behavior 
Analysis (ABA) therapy (one of the primary treatments for ASD), that 
are separately applicable to ASD benefits in a classification and not 
to any medical/surgical benefits in the same classification. The 
Departments propose to incorporate new examples illustrating the 
application of MHPAEA to eating disorders and ASD, as discussed later 
in this preamble. The Departments solicit comments on other specific 
mental health conditions or substance use disorders that may warrant 
additional clarification for purposes of analyzing parity and 
compliance with MHPAEA.
---------------------------------------------------------------------------

    \106\ See DSM (5th ed.), section II, Autism Spectrum Disorder.
---------------------------------------------------------------------------

    In addition to the proposals outlined above to amend certain 
existing definitions, these proposed rules also would add several new 
definitions to codify the meaning of terms used in paragraph (c)(4)(i) 
of the 2013 final regulations, which requires the processes, 
strategies, evidentiary standards, and other factors used in applying 
an NQTL to mental health or substance use disorder benefits to be 
comparable to, and no more stringently applied than those used to apply 
the NQTL to medical/surgical benefits in the same classification. These 
terms and the standard were incorporated into MHPAEA's statutory 
language in the amendments made by the CAA, 2021.\107\ The Departments 
propose to add new definitions for the terms ``processes,'' 
``strategies,'' ``evidentiary standards,'' and ``factors'' to the list 
of definitions for key terms proposed to be included in 26 CFR 54.9812-
1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) of these 
proposed rules. These new definitions would provide clarity to plans 
and issuers, as well as to State regulators and participants and 
beneficiaries, and help facilitate compliance with the provisions of 
these proposed rules related to NQTLs and the development of sufficient 
comparative analyses required under the CAA, 2021 and proposed 26 CFR 
54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137. Although the 
Departments have issued guidance with examples that demonstrate how 
these terms apply, interested parties have stated that it can be 
difficult to determine what constitutes relevant processes, strategies, 
evidentiary standards, and other factors. The Departments solicit 
comments on these proposed definitions, including any alternate 
definitions or additional clarifications that should be considered.
---------------------------------------------------------------------------

    \107\ See, e.g., Code section 9812(a)(8)(A), ERISA section 
712(a)(8)(A), and PHS Act section 2726(a)(8)(A).
---------------------------------------------------------------------------

    The Departments propose to add a definition of the term 
``evidentiary standards'' to mean any evidence, sources, or standards 
that a group health plan (or health insurance issuer offering coverage 
in connection with such a plan) considered or relied upon in designing 
or applying a factor with respect to an NQTL, including specific 
benchmarks or thresholds. The proposed definition further provides that 
evidentiary standards may be empirical, statistical, or clinical in 
nature, and include sources acquired or originating from an objective 
third party, such as recognized medical literature, professional 
standards and

[[Page 51567]]

protocols (which may include comparative effectiveness studies and 
clinical trials), published research studies, payment rates for items 
and services (such as publicly available databases of the ``usual, 
customary, and reasonable'' rates paid for items and services), and 
clinical treatment guidelines. The proposed definition provides that 
evidentiary standards would also include internal plan or issuer data, 
such as claims or utilization data or criteria for assuring a 
sufficient mix and number of network providers, and benchmarks or 
thresholds, such as measures of excessive utilization, cost levels, 
time or distance standards, or network participation percentage 
thresholds.
    Under these proposed rules, evidentiary standards generally would 
not be considered factors, but instead would be considered or relied 
upon in designing or applying a factor. Under the framework established 
in the 2013 final regulations, the terms within the phrase ``processes, 
strategies, evidentiary standards, and other factors'' were treated as 
having overlapping meanings, and specifically, the term ``other 
factors'' was treated as a catch-all. The CAA, 2021 codified in the 
statute the phrase ``processes, strategies, evidentiary standards, and 
other factors.'' \108\ However, the CAA, 2021 added to MHPAEA other 
references to factors and evidentiary standards that indicate the 
drafters meant to distinguish between factors and evidentiary 
standards. For example, Code section 9812(a)(8)(A)(iii), ERISA section 
712(a)(8)(A)(iii), and PHS Act 2726(a)(8)(A)(iii) refer to the 
evidentiary standards that are used for the factors to determine that 
an NQTL will apply to benefits, and those provisions go on to 
distinguish between factors and any other sources or evidence relied 
upon to design or apply an NQTL. The proposed definition of evidentiary 
standards is consistent with the use of these terms by Congress in the 
CAA, 2021 amendments to MHPAEA and the Departments' goal of clarifying 
the meanings of these terms to help the regulated community comply with 
MHPAEA's requirements. The Departments request comments on this 
approach, including whether there are any circumstances under which an 
evidentiary standard should also be considered a factor under these 
proposed rules (such as, for example, when the plan or issuer only 
relies upon a single evidentiary standard to design or apply an NQTL, 
and no additional processes, strategies, or other factors).
---------------------------------------------------------------------------

    \108\ Code section 9812(a)(7)(B)(ii)(II) and (8)(A)(iv), ERISA 
section 712(a)(7)(B)(ii)(II) and (8)(A)(iv), and PHS Act section 
2726(a)(7)(B)(ii)(II) and (8)(A)(iv).
---------------------------------------------------------------------------

    The Departments also propose to clarify that the definition of the 
term ``factors'' should be read broadly, so that factors are all 
information, including processes and strategies (but generally not 
evidentiary standards), that a group health plan (or health insurance 
issuer offering coverage in connection with such a plan) considered or 
relied upon to design an NQTL or used to determine whether or how the 
NQTL applies to benefits under the plan or coverage. The proposed 
definition of the term ``factors'' also would include information (but 
generally not evidentiary standards) that the plan or issuer considered 
but rejected, consistent with previous guidance on MHPAEA in the 
context of the documents or plan information the Departments consider 
relevant to a compliance determination.\109\ The proposed definition 
also provides examples of factors, which include, but are not limited 
to, provider discretion in determining diagnosis or type or length of 
treatment; clinical efficacy of any proposed treatment or service; 
licensing and accreditation of providers; claim types with a high 
percentage of fraud; quality measures; treatment outcomes; severity or 
chronicity of condition; variability in the cost of an episode of 
treatment; high cost growth; variability in cost and quality; 
elasticity of demand; and geographic location.
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    \109\ See FAQs Part 31, Q9, which states that a plan must 
provide documents and plan information to a participant or 
beneficiary, or their authorized representative, including the 
specific underlying processes, strategies, evidentiary standards, 
and other factors (including, but not limited to, all evidence) 
considered by the plan (including factors that were relied upon and 
were rejected) in determining that the NQTL will apply to a 
particular mental health and substance use disorder benefit or any 
medical/surgical benefits within the benefit classification at 
issue.
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    Under these proposed rules, factors would include processes and 
strategies, but the Departments note that there may be factors that do 
not satisfy the proposed definitions of ``processes'' or 
``strategies.'' By defining the term ``factor'' broadly, the 
Departments intend to capture any information used to design or apply 
an NQTL (other than evidentiary standards generally), regardless of 
whether a plan or issuer believes that information could also be 
characterized as a process or a strategy, as those terms are proposed 
to be defined under these proposed rules.
    Additionally, the Departments propose to define ``processes'' and 
``strategies'' as types of factors, in a manner that makes clear the 
differences between the two terms as they relate to the design and 
application of an NQTL. Specifically, the Departments would define 
``processes'' as relating to the application of an NQTL, while 
``strategies'' would relate to the design of an NQTL.
    The Departments therefore propose to define ``processes'' to mean 
actions, steps, or procedures that a plan or issuer uses to apply an 
NQTL. ``Processes'' would include requirements established by the plan 
or issuer for a participant or beneficiary to access benefits, 
including through actions by a participant's or beneficiary's 
authorized representative, or a provider or facility. The proposed 
definition further provides that processes include, but are not limited 
to: procedures to submit information to authorize coverage for an item 
or service prior to receiving the benefit or while treatment is ongoing 
(including requirements for peer or expert clinical review of that 
information); provider referral requirements; and the development and 
approval of a treatment plan. The proposed definition also provides 
that processes include the specific procedures used by staff or other 
representatives of a plan or issuer (or the service provider of a plan 
or issuer) to administer the application of NQTLs, such as: how a panel 
of staff members applies the NQTL (including the qualifications of 
staff involved, number of staff members allocated, and time allocated); 
consultations with panels of experts in applying the NQTL; and reviewer 
discretion in adhering to criteria hierarchy when applying an NQTL.
    These proposed rules would define ``strategies'' as practices, 
methods, or internal metrics that a plan or issuer considers, reviews, 
or uses to design an NQTL. The proposed definition provides that 
examples of strategies include, but are not limited to: the development 
of the clinical rationale used in approving or denying benefits; 
deviation from generally accepted standards of care; the selection of 
information (such as from medical or clinical guidelines) deemed 
reasonably necessary to make a medical necessity determination; 
reliance on treatment guidelines or guidelines provided by third-party 
organizations; and rationales used in selecting and adopting certain 
threshold amounts, professional protocols, and fee schedules. These 
proposed rules would further specify that strategies also include the 
creation and composition of the staff or other representatives of a 
plan or issuer (or the service provider of a plan or issuer) that 
deliberates, or otherwise makes decisions, on the design of NQTLs, 
including the plan's decisions related to

[[Page 51568]]

qualifications of staff involved, number of staff members allocated, 
and time allocated; breadth of sources and evidence considered; 
consultations with panels of experts in designing the NQTL; and the 
composition of the panels used to design an NQTL.
    To illustrate the interaction of the definitions of these terms, a 
plan might rely on various combinations of processes, strategies, 
evidentiary standards, and other factors in designing and applying a 
prior authorization NQTL for in-network, non-hospital-based, inpatient/
residential facilities for non-emergency medical/surgical or mental 
health or substance use disorder treatment. For example, the strategies 
used by the plan to design the NQTL could include the development of 
the clinical rationales the plan used in determining when to approve or 
deny benefits for the facility, and the composition of the staff of the 
plan that chose what information would be deemed necessary to determine 
whether a participant or beneficiary has an immediate, clinically valid 
need for treatment at the facility. The processes the plan used in 
applying the NQTL could include the specific steps a participant or 
beneficiary (or their authorized representative, including their 
provider or the facility) would need to take to obtain prior 
authorization, such as obtaining a written treatment plan. The 
processes would also include the procedures used by staff or other 
representatives of the plan (or the service provider of the plan) in 
determining whether a particular request for prior authorization would 
be approved. These processes and strategies would also be considered 
factors, as would the licensing and accreditation requirements for non-
hospital-based, inpatient/residential facilities and the severity or 
chronicity of a patient's condition when they are seeking treatment at 
such a facility. Finally, the evidentiary standards used to design or 
apply the factors would include, for example, the benchmarks or 
thresholds the plan uses to inform the number of days of treatment at 
the facility that would be authorized at one time, as well as published 
research studies on the efficacy of the treatment in this particular 
facility setting.
    Finally, the Departments propose to amend the definition of 
``treatment limitation'' to clarify that the illustrative list of NQTLs 
to which the definition refers is non-exhaustive, and to amend the last 
sentence to state that a complete exclusion of all benefits for a 
particular condition or disorder is not a treatment limitation for 
purposes of this definition. By changing the existing reference in the 
definition from a ``permanent'' exclusion to a ``complete'' exclusion, 
the proposed amended definition of ``treatment limitation'' would 
better reflect a plan's or issuer's ability to amend the terms of their 
plan or coverage and affirm that this part of the definition refers to 
an exclusion of all benefits for a particular condition or disorder.
    While NQTLs are generally defined as treatment limitations that are 
not expressed numerically, the application of an NQTL in a numerical 
way does not modify its nonquantitative character simply because the 
NQTL sometimes involves numerical standards. For example, standards to 
participate in a network would be NQTLs because such standards are 
treatment limitations that typically are not expressed numerically. 
Nevertheless, these standards sometimes rely on or involve numerical 
standards, such as reimbursement rates. In this case, the numerical 
expression of a reimbursement rate does not modify the nonquantitative 
character of the standards related to network composition. Therefore, 
such standards would still be evaluated in accordance with the rules 
for NQTLs under the statute and these proposed rules.
    The Departments solicit comments on all aspects of these proposed 
amendments to existing definitions, as well as the new proposed 
definitions. The Departments also request comment on what additional 
clarifications or examples might be helpful in understanding these 
amended and new proposed defined terms.
3. Nonquantitative Treatment Limitations--26 CFR 54.9812-1(c)(4), 29 
CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4)
    As explained earlier in this preamble, the Departments are 
proposing changes that are designed to prevent plans and issuers from 
designing and implementing NQTLs that impose greater limits on access 
to mental health and substance use disorder benefits as compared to 
medical/surgical benefits. These proposed rules would add additional 
requirements for plans and issuers that apply NQTLs with respect to 
mental health and substance use disorder benefits, to prevent the 
imposition of a greater burden on participants and beneficiaries 
accessing those benefits, while preserving the ability of plans and 
issuers to impose those NQTLs to the extent they are consistent with 
generally recognized independent professional medical or clinical 
standards or standards related to fraud, waste, and abuse. Subject to 
those two narrow exceptions, these proposed rules provide that plans 
and issuers would not be permitted to impose an NQTL unless (1) the 
NQTL is no more restrictive as applied to mental health and substance 
use disorder benefits than to medical/surgical benefits (also referred 
to in this preamble as the no more restrictive requirement); \110\ (2) 
the plan or issuer satisfies requirements related to the design and 
application of the NQTL (also referred to in this preamble as the 
design and application requirements); \111\ and (3) the plan or issuer 
collects, evaluates, and considers the impact of relevant data on 
access to mental health and substance use disorder benefits relative to 
access to medical/surgical benefits; and subsequently takes reasonable 
action as necessary to address any material differences in access shown 
in the data to ensure compliance with MHPAEA (also referred to in this 
preamble as the relevant data evaluation requirements).\112\
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    \110\ Proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i).
    \111\ Proposed 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii).
    \112\ Proposed 26 CFR 54.9812-1(c)(4)(iv), 29 CFR 
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv).
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    The proposed rules do not require or suggest a particular sequence 
to the analysis for evaluating compliance, and no inferences should be 
drawn from the order in which each of these independent requirements 
appear in the proposed regulatory text. For example, a plan or issuer 
designing or applying an NQTL with respect to mental health or 
substance use disorder benefits could begin analyzing compliance with 
MHPAEA by looking at the design and application requirements under 
these proposed rules before fully evaluating whether the NQTL with 
respect to mental health or substance use disorder benefits complies 
with the no more restrictive requirement. Additionally, if a plan or 
issuer, in the process of complying with the relevant data evaluation 
requirements, identifies material differences in access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits, those differences would be considered a strong 
indicator that the plan or issuer violated the proposed no more 
restrictive requirement or the design and application 
requirements.\113\ In such

[[Page 51569]]

instances, if the plan or issuer took the additional steps required 
under the material differences requirement at 26 CFR 54.9812-
1(c)(4)(iv)(B), 29 CFR 2590.712(c)(4)(iv)(B), or 45 CFR 
146.136(c)(4)(iv)(B) (and the special rule for NQTLs related to network 
composition at 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 
2590.712(c)(4)(iv)(C), or 45 CFR 146.136(c)(4)(iv)(C) did not apply), 
then the plan or issuer would meet all three independent 
requirements.\114\ The Departments solicit comments on this proposed 
approach.
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    \113\ But see the special rule for NQTLs related to network 
composition at proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C), which states 
that, when designing and applying one or more NQTLs related to 
network composition standards, a plan fails to meet the no more 
restrictive requirement and the design and application requirements, 
in operation, if the relevant data show material differences in 
access to in-network mental health and substance use disorder 
benefits as compared to in-network medical/surgical benefits in a 
classification.
    \114\ The plan or issuer would also be required to document any 
steps taken in accordance with the material differences requirement 
(and the special rule for NQTLs related to network composition, if 
applicable) as part of its comparative analyses. Even if the plan or 
issuer had assessed compliance prior to the steps taken in 
accordance with the material differences requirement and the special 
rule for NQTLs related to network composition, the plan or issuer 
would be required to re-evaluate whether the no more restrictive 
requirement and the design and application requirements are met with 
respect to the adjusted NQTL.
---------------------------------------------------------------------------

    If a plan or issuer fails to meet any of the three requirements 
with respect to an NQTL in a classification, these proposed rules state 
that the NQTL would violate MHPAEA and may not be imposed on mental 
health or substance use disorder benefits in the classification. Where 
a plan or issuer fails to satisfy the requirements of one part of these 
proposed rules for NQTLs, the plan or issuer must make changes to the 
terms of the plan or coverage or the way the NQTL is designed or 
applied to ensure compliance with MHPAEA.
    These proposed rules also would prohibit plans and issuers from 
relying upon any factor or evidentiary standard if the information, 
evidence, sources, or standards on which the factor or evidentiary 
standard is based discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits.\115\ 
Additionally, the proposed rules would require plans and issuers to 
collect and evaluate relevant outcomes data and address any material 
differences in access between mental health and substance use disorder 
benefits and medical/surgical benefits as necessary to ensure 
compliance. This proposed provision also would impose a special rule 
for NQTLs related to network composition.\116\
---------------------------------------------------------------------------

    \115\ Proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR 
2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B).
    \116\ Proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C).
---------------------------------------------------------------------------

    Finally, these proposed rules would make clear that a plan or 
issuer that has received a final determination of noncompliance under 
the comparative analysis review process established by the CAA, 2021, 
including a final determination of noncompliance based on failure to 
provide a sufficient comparative analysis, also could be in violation 
of the substantive requirements that apply to NQTLs under MHPAEA, as 
determined by the Departments. Upon such a determination, the 
Departments would direct the plan or issuer to not impose the NQTL that 
is the subject of the comparative analysis, unless and until the plan 
or issuer can demonstrate compliance or take appropriate action to 
remedy the violation.\117\ The Departments request comments on all 
aspects of these proposed amendments and additions to the rules 
regarding NQTLs.
---------------------------------------------------------------------------

    \117\ Proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii).
---------------------------------------------------------------------------

a. Requirement That NQTLs be No More Restrictive for Mental Health and 
Substance Use Disorder Benefits--26 CFR 54.9812-1(c)(4)(i), 29 CFR 
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i)
    These proposed rules, if finalized, would redesignate, from what is 
currently 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 
CFR 146.136(c)(4)(i) to 26 CFR 54.9812-1(c)(4)(ii)(A), 29 CFR 2590.712 
(c)(4)(ii)(A), and 45 CFR 146.136(c)(4)(ii)(A), the general rule for 
evaluating NQTLs, and add new language to these paragraphs to impose 
additional requirements for NQTLs. As noted elsewhere in the preamble, 
these proposed rules would provide that a plan or issuer may not apply 
any NQTL to mental health or substance use disorder benefits in any 
classification that is more restrictive, as written or in operation, 
than the predominant NQTL that applies to substantially all medical/
surgical benefits in the same classification.\118\ While the 2013 final 
regulations largely relied on an analysis of the processes, strategies, 
evidentiary standards, and other factors used in the application of 
NQTLs, proposed 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), 
and 45 CFR 146.136(c)(4)(i) is consistent with the fundamental purpose 
of MHPAEA and more closely mirrors the statutory language in Code 
section 9812(a)(3)(A), ERISA section 712(a)(3)(A), and PHS Act 
2726(a)(3)(A), which states that plans and issuers ``. . . shall ensure 
that . . . the treatment limitations applicable to . . . mental health 
or substance use disorder benefits are no more restrictive than the 
predominant treatment limitations applied to substantially all medical 
and surgical benefits covered by the plan ([or coverage]) . . . .''
---------------------------------------------------------------------------

    \118\ As explained later in this preamble, the Departments are 
also proposing to add clarifying language to these proposed rules to 
make clear that any references to the term ``classifications'' in 
MHPAEA's implementing regulations also includes permissible sub-
classifications, including with respect to NQTLs.
---------------------------------------------------------------------------

    To that end, the proposed rules provide an explanation of how the 
terms ``restrictive,'' ``substantially all,'' and ``predominant'' would 
apply in the context of the no more restrictive requirement in proposed 
26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i). To comply with these proposed rules, if finalized, 
plans and issuers would be required to follow similar steps to those 
that apply when analyzing parity with respect to financial requirements 
or quantitative treatment limitations under the 2013 final regulations. 
These steps would involve determining the portion of plan payments for 
medical/surgical benefits subject to an NQTL in a classification; 
whether the NQTL applies to substantially all medical/surgical benefits 
in the classification; the predominant variation of the NQTL that 
applies to medical/surgical benefits in the classification; and whether 
the NQTL, as applied to mental health and substance use disorder 
benefits in the classification, is more restrictive than the 
predominant variation of the NQTL as applied to substantially all 
medical/surgical benefits.
    First, in determining whether an NQTL applies to substantially all 
medical/surgical benefits in a classification, plans and issuers would 
be required to determine the portion of plan payments for medical/
surgical benefits expected to be subject to the NQTL based on the 
dollar amount of all plan payments for medical/surgical benefits in the 
classification expected to be paid under the plan or coverage for the 
plan year (or the portion of the plan year after a change in benefits 
that affects the applicability of the NQTL). Similar to the 
longstanding rules for financial requirements and quantitative 
treatment limitations, these proposed rules would provide that for 
NQTLs, any reasonable method may be used to determine the dollar amount 
expected to be paid under the plan or coverage for medical/surgical 
benefits. In the Departments' view, for a method to be reasonable with 
respect to large group market and self-insured group health plans, a 
plan or issuer would be

[[Page 51570]]

required to consider group health plan-level claims data to perform the 
substantially all and predominant analyses, and must rely on such data 
if it is credible to perform the required projections.\119\ Similarly, 
for small group market plans, an issuer would be required to consider 
``plan''-level (as opposed to the ``product''-level) claims data to 
perform the substantially all analysis, using the definitions of 
``plan'' and ``product'' in 45 CFR 144.103, and would be required to 
rely on such data if it is credible to perform the required 
projections.\120\ However, if an actuary who is subject to and meets 
the qualification standards for the issuance of a statement of 
actuarial opinion regarding health plans in the United States,\121\ 
including having the necessary education and experience to provide the 
actuarial opinion, determines that a group health plan or issuer does 
not have sufficient data at the plan level for a reasonable projection 
of future claims costs for the ``substantially all'' analyses, the 
group health plan or issuer should utilize other reasonable claims data 
to make a projection to conduct actuarially-appropriate analyses. As 
part of using a ``reasonable method'' to make these projections, plans 
and issuers should document the assumptions used in choosing a data set 
and making projections. Plans and issuers would not be required to 
perform the parity analysis under proposed 26 CFR 54.9812-1(c)(4)(i), 
29 CFR 2590.712 (c)(4)(i), and 45 CFR 146.136(c)(4)(i) each plan year 
unless there is a change in plan benefit design or utilization that 
would affect an NQTL within a classification. The Departments solicit 
comments on whether there are any challenges or other considerations 
with this approach regarding which level of data plans and issuers 
should look to in performing this prong of the analysis, and whether 
there should be a different standard given the different nature of 
NQTLs.
---------------------------------------------------------------------------

    \119\ See FAQs Part 34, Q3 (interpreting the reasonable method 
requirement with respect to financial requirements and quantitative 
treatment limits).
    \120\ 45 CFR 144.103 generally defines ``product'' as a discrete 
package of health insurance coverage benefits offered using a 
particular product network type within a service area, and ``plan'' 
as the pairing of the health insurance coverage benefits under the 
product with a particular cost-sharing structure, provider network, 
and service area. In this context, the term ``plan'' is not 
synonymous with the term ``group health plan.'' This approach would 
also apply to individual health insurance coverage under HHS 
regulations that incorporate the group market rules by reference.
    \121\ The U.S. Qualification Standards apply to members of the 
six U.S.-based organizations who issue Statements of Actuarial 
Opinion in the United States. The organizations are the American 
Academy of Actuaries, American Society of Pension Professionals and 
Actuaries, American Society of Enrolled Actuaries, Casualty 
Actuarial Society, Conference of Consulting Actuaries, and Society 
of Actuaries.
---------------------------------------------------------------------------

    Second, plans and issuers would be required to determine whether 
the NQTL applies to substantially all medical/surgical benefits in the 
classification, based on the plan payments for medical/surgical 
benefits subject to an NQTL as a portion of the dollar amount of all 
plan payments for medical/surgical benefits in the classification 
expected to be paid under the plan for the plan year. An NQTL would be 
considered to apply to substantially all medical/surgical benefits in a 
classification if it applies to at least two-thirds of all medical/
surgical benefits in that classification. Whether the NQTL applies to 
at least two-thirds of all medical/surgical benefits would be 
determined without regard to whether the NQTL was triggered based on a 
particular factor or evidentiary standard. For example, if a plan or 
issuer applies a general exclusion for all benefits in a classification 
that are for experimental or investigative treatment, and defines 
experimental or investigative treatment to be treatments with less than 
a certain number of peer-reviewed studies demonstrating efficacy, the 
exclusion would be treated as applying to all of the benefits in the 
classification--not just those that may be subject to the general 
exclusion for experimental or investigative treatment because they lack 
the requisite number of peer-reviewed studies (that is, those that 
actually triggered the NQTL based on the evidentiary standard). These 
proposed rules further provide that if an NQTL does not apply to at 
least two-thirds of all medical/surgical benefits in a classification, 
then that NQTL would not be permitted to be applied to mental health or 
substance use disorder benefits in that classification.
    The Departments request comment on whether any additional 
clarification is needed for plans and issuers to determine whether an 
NQTL applies to substantially all medical/surgical benefits in a 
classification. The Departments acknowledge that there are significant 
differences between financial requirements or quantitative treatment 
limitations and NQTLs and therefore also request comments on whether 
plans and issuers maintain systems capable of making such 
determinations and the potential administrative burdens that would be 
associated with such determinations. Specifically, the Departments are 
interested in feedback on the approach under these proposed rules for 
determining substantially all medical/surgical benefits in a 
classification with respect to certain NQTLs, including those that are 
used to exclude benefits under the plan or coverage (such as exclusions 
for experimental or investigational treatment). The Departments also 
solicit comments on the interaction of this approach with other 
statutory requirements for plans and issuers prohibiting certain NQTLs 
on medical/surgical benefits (such as the prohibition on prior 
authorization for any minimum hospital length of stay after childbirth 
under the Newborns' and Mothers' Health Protection Act \122\).
---------------------------------------------------------------------------

    \122\ Code section 9811, ERISA section 711, and PHS Act sections 
2725 and 2751; 26 CFR 54.9811-1, 29 CFR 2590.711, and 45 CFR 146.130 
and 148.170.
---------------------------------------------------------------------------

    If an NQTL applies to substantially all medical/surgical benefits 
in a classification, the third step would require plans and issuers to 
determine the predominant variation of the NQTL that is applied to 
substantially all medical/surgical benefits subject to the NQTL in the 
classification. The Departments propose that the term ``predominant'' 
would, for this purpose, mean the most common or most frequent 
variation of an NQTL within a benefit classification. For example, if a 
plan applies inpatient concurrent review commencing 1 day, 3 days, or 7 
days after admission, depending on the reason for a stay in a hospital 
or other inpatient facility, or the procedure performed during such a 
stay, the plan imposes three different variations of the NQTL within 
the benefit classification. Under this example, to determine which 
variation is predominant, the plan would determine the portion of 
inpatient benefits subject to each of the three different variations of 
the NQTL based on the dollar amount of all plan payments expected to be 
paid under the plan or coverage for the plan year (or the portion of 
the plan year after a change in benefits that affects the applicability 
of the NQTL). Similarly, if a plan applies an NQTL such as prior 
authorization in a manner that differs based on the manner of review 
(auto-adjudication vs. manual review) and the number of levels of 
review (first-level review vs. first-level review and peer-to-peer 
review), the plan would regard each unique combination as a separate 
variation. If the plan or issuer imposes only one variation of an NQTL, 
that variation is considered the predominant NQTL for purposes of the 
no more restrictive requirement.
    Variations of an NQTL for purposes of the determination of which is

[[Page 51571]]

``predominant'' are different than levels of a type of financial 
requirement or quantitative treatment limitation. Because of the nature 
of NQTLs, the same mathematical principles for combining plan payments 
to get to more than one-half for a financial requirement or 
quantitative treatment limitation may not always be transferrable when 
determining which variation of an NQTL is predominant. Therefore, for 
purposes of NQTLs, the ``predominant'' variation would be the most 
common or frequent variation of the NQTL. The most common or frequent 
variation would be the variation that applies to the highest portion of 
all medical/surgical benefits within a classification that are subject 
to the NQTL based on expected plan payments. This proposed definition 
mirrors the statutory definition of the term ``predominant'' in Code 
section 9812(a)(3)(B)(ii), ERISA section 712(a)(3)(B)(ii), and PHS Act 
section 2726(a)(3)(B)(ii). However, it is different in some ways from 
the 2013 final regulations for financial requirements and quantitative 
treatment limitations, because the distinct nature of NQTLs 
necessitates looking to the most common or frequent variation rather 
than comparing and combining numerical levels. Using the inpatient 
concurrent review example described earlier in this section of the 
preamble, if the plan had determined that applying concurrent review 7 
days after admission was the predominant variation, the plan would be 
prohibited from applying a more restrictive variation of that NQTL to 
mental health or substance use disorder benefits in the classification.
    The Departments request comment on this approach and any additional 
clarifications or specificity that is necessary for plans and issuers 
to determine the predominant NQTL that applies to substantially all 
medical/surgical benefits in a classification, including what 
characteristics of a particular NQTL should be considered when 
determining the predominant variation when a plan or issuer imposes 
multiple variations, and how to distinguish between what might be a 
single NQTL without any variations versus what might be variations of a 
single NQTL. The Departments also request comment on what should be 
considered the predominant variation of an NQTL when multiple 
variations are equally common or frequent. Additionally, the 
Departments are interested in alternative approaches to determining the 
predominant variation of an NQTL that would provide clarity across a 
wide variety of NQTLs and ways that plans and issuers design and apply 
NQTLs to various types of benefits.
    Fourth, under these proposed rules, an NQTL applied to mental 
health or substance use disorder benefits cannot be more restrictive 
than the predominant NQTL applied to substantially all medical/surgical 
benefits in the same classification. An NQTL is restrictive if it 
imposes conditions, terms, or requirements that limit access to 
benefits under the terms of the plan or coverage. For purposes of 
determining whether an NQTL is restrictive, ``conditions, terms, or 
requirements'' would include, but would not be limited to, those that 
compel an action by or on behalf of a participant or beneficiary 
(including by their authorized representative or a provider or 
facility) to access benefits and those that limit access to the full 
range of treatment options available for a condition or disorder under 
the plan or coverage. Thus, if an NQTL applied to mental health or 
substance use disorder benefits is determined to be more restrictive, 
as written or in operation, than the predominant NQTL applied to 
substantially all medical/surgical benefits in the same classification, 
the NQTL would violate MHPAEA, subject to certain exceptions for 
independent professional medical or clinical standards and standards 
related to fraud, waste, and abuse, discussed in more detail later in 
this preamble.
    The Departments recognize that the term ``restrictive'' is not 
specifically defined in MHPAEA or the 2013 final regulations in the 
context of the parity analysis for financial requirements and 
quantitative treatment limitations. The Departments are of the view 
that it is generally apparent when one financial requirement or 
quantitative treatment limitation is more restrictive than another. For 
example, a $25 copayment is clearly more restrictive than a $15 
copayment, and a 5-visit limit is more restrictive than a 10-visit 
limit. However, due to the nature of NQTLs, which generally do not 
allow for such straightforward comparison, and the fact that many plans 
and issuers have designed and applied NQTLs to mental health and 
substance use disorder benefits in a manner that limits access to those 
benefits as compared to medical/surgical benefits, the Departments are 
proposing a definition of ``restrictive'' to clarify how this term 
should be interpreted specifically for NQTLs in a manner that is 
consistent with MHPAEA's fundamental purpose. The Departments solicit 
comments on any additional clarifications necessary for plans and 
issuers to apply the no more restrictive requirement with respect to 
NQTLs applicable to mental health and substance use disorder benefits. 
The Departments also solicit comments on whether there are any specific 
NQTLs for which it would be challenging for plans and issuers to 
determine whether the NQTL is more restrictive with respect to mental 
health and substance use disorder benefits than medical/surgical 
benefits, consistent with the proposed definition of ``restrictive.''
    The following example applies each of the steps in the analysis 
described earlier in this preamble for the proposed no more restrictive 
requirement at 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 
45 CFR 146.136(c)(4)(i). Under this example, a self-insured group 
health plan imposes a medical management requirement that all 
inpatient, in-network medical/surgical and mental health and substance 
use disorder facilities have 24-hour onsite nursing services available. 
First, the plan would determine the portion of plan payments for 
medical/surgical benefits that are subject to the NQTL, based on the 
dollar amount of all plan payments for medical/surgical benefits in the 
inpatient, in-network classification expected to be paid under the plan 
for the plan year. Second, based on this calculation, the plan would 
determine whether the NQTL applies to at least two-thirds of inpatient, 
in-network medical/surgical benefits. Because all medical/surgical 
benefits in the classification are subject to the medical management 
requirement, the NQTL would apply to substantially all medical/surgical 
benefits in the classification. Third, the plan would identify the 
predominant, or most common or frequent, variation of the NQTL based on 
the portion of plan payments for medical/surgical benefits that are 
subject to each variation of the NQTL. In this case, because there is 
only one variation (the requirement that facilities have 24-hour on-
site nursing services available), that variation of the NQTL would be 
predominant under the framework in these proposed rules. Finally, the 
plan would evaluate whether the NQTL as applied to mental health and 
substance use disorder benefits is more restrictive, as written or in 
operation, than the predominant NQTL applicable to substantially all 
medical/surgical benefits in the inpatient, in-network classification. 
Because the requirement that facilities have 24-hour on-site nursing 
services available does not impose additional conditions, terms, or 
requirements that

[[Page 51572]]

limit access to benefits under the terms of the plan or coverage for 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits by, for example, compelling an additional 
action by a participant or beneficiary to access mental health and 
substance use disorder benefits or limiting access to the full range of 
treatment options available, for mental health or substance use 
disorder benefits as compared to medical/surgical benefits in the 
classification, this NQTL would satisfy the no more restrictive 
requirement under 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), 
and 45 CFR 146.136(c)(4)(i) of these proposed rules.
    If a plan or issuer analyzes an NQTL and determines that it 
satisfies the no more restrictive requirement under these proposed 
rules, it would also still be required under these proposed rules to 
analyze the NQTL under the design and application requirements and the 
relevant data evaluation requirements, discussed later in this 
preamble, to ensure compliance with MHPAEA. As discussed earlier in 
this preamble, the Departments note that, while the no more restrictive 
requirement appears first in these proposed rules, nothing in these 
proposed rules is intended to require that compliance with the no more 
restrictive requirement be assessed before the other requirements for 
NQTLs in proposed 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 
CFR 146.136(c)(4). The Departments propose adding several examples, 
described later in this preamble, to illustrate how the no more 
restrictive requirement, the design and application requirements, and 
the relevant data evaluation requirements in these proposed rules apply 
to various factual scenarios.
    Under these proposed rules, the Departments do not intend to 
interfere with a plan's or issuer's attempts to ensure that coverage 
for benefits for the treatment of mental health conditions and 
substance use disorders is consistent with generally accepted 
independent professional medical or clinical standards. Similarly, the 
Departments do not intend for the no more restrictive requirement to 
prevent plans and issuers from applying reasonably designed and 
carefully circumscribed measures adopted for the purpose of detecting 
or preventing and proving fraud, waste, and abuse. The Departments 
recognize that the application of independent professional medical or 
clinical standards and standards related to fraud, waste, and abuse 
generally improve and help to ensure appropriate care for participants 
and beneficiaries, rather than restrict access to needed benefits. The 
Departments also acknowledge that there are instances in which the 
application of independent professional medical or clinical standards 
might result in plans and issuers applying NQTLs to mental health or 
substance use disorder benefits that would otherwise be more 
restrictive than the predominant NQTL applied to substantially all 
medical/surgical benefits in the same classification when applying the 
no more restrictive requirement in proposed 26 CFR 54.9812-
1(c)(4)(i)(A) through (D), 29 CFR 2590.712(c)(4)(i)(A) through (D), and 
45 CFR 146.136(c)(4)(i)(A) through (D). Therefore, the Departments 
propose that an NQTL applied to mental health or substance use disorder 
benefits in any classification would not be considered to violate the 
no more restrictive requirement if the NQTL impartially applies 
independent professional medical or clinical standards or applies 
standards related to fraud, waste, and abuse, that meet specific 
requirements, discussed in more detail later in this preamble.
b. Requirements Related to Design and Application of the NQTL--26 CFR 
54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 
146.136(c)(4)(ii)
    As mentioned earlier in this preamble, these proposed rules would 
redesignate the requirement currently in 26 CFR 54.9812-1(c)(4)(i), 29 
CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) as paragraph 
(c)(4)(ii)(A) and would amend the requirement codified in the 2013 
final regulations to align with the Departments' consistent 
interpretation that a plan or issuer may not impose an NQTL with 
respect to mental health or substance use disorder benefits in any 
classification unless, under the terms of the plan (or health insurance 
coverage) as written and in operation, any processes, strategies, 
evidentiary standards, or other factors used in designing and applying 
the NQTL to mental health or substance use disorder benefits in the 
classification are comparable to, and are applied no more stringently 
than, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the limitation with respect to 
medical/surgical benefits in the classification. To codify this 
interpretation, and for consistency with statutory language added by 
the CAA, 2021, the Departments propose to revise the regulatory text to 
make this requirement explicit.
    Under these proposed rules, a key consideration in determining 
whether, in designing or applying an NQTL to mental health or substance 
use disorder benefits, the processes, strategies, evidentiary 
standards, or other factors are applied no more stringently than those 
used in designing and applying the limitation to medical/surgical 
benefits in the classification, would be whether any process, strategy, 
evidentiary standard, or other factor restricts access more so to 
mental health or substance use disorder benefits than to generally 
comparable medical/surgical benefits. This approach is consistent with 
the proposed new purpose section set forth in these proposed rules and 
discussed earlier in this preamble.
    Under these proposed rules, if a plan or issuer imposes an NQTL 
that impartially applies independent professional medical or clinical 
standards to medical/surgical benefits and mental health or substance 
use disorder benefits that would not be considered a violation of the 
no more restrictive requirement or the relevant data evaluation 
requirements. However, the plan or issuer would still need to comply 
with the design and application requirements in proposed 26 CFR 
54.49812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR 
146.136(c)(4)(ii)(A). That is, the plan or issuer would not be 
permitted to impose an NQTL with respect to mental health or substance 
use disorder benefits in any classification unless, under the terms of 
the plan (or health insurance coverage) as written and in operation, 
any processes, strategies, evidentiary standards, or other factors used 
in designing and applying the NQTL to mental health or substance use 
disorder benefits in the classification are comparable to, and are 
applied no more stringently than those used in designing and applying 
the NQTL with respect to medical/surgical benefits in the 
classification. Similarly, if a plan or issuer imposes standards 
related to fraud, waste, and abuse in a manner described in the 
proposed rules, the plan or issuer would still be required to comply 
with the design and application requirements and the relevant data 
evaluation requirements in proposed 26 CFR 54.49812-1(c)(4)(ii) and 
(iv), 29 CFR 2590.712(c)(4)(ii) and (iv), and 45 CFR 146.136(c)(4)(ii) 
and (iv).
    The Departments also propose to add a new provision to further 
ensure that processes, strategies, evidentiary standards, and other 
factors used in designing and applying an NQTL to mental health or 
substance use disorder benefits in a classification are comparable to, 
and are applied no more stringently than, those used in designing

[[Page 51573]]

and applying an NQTL to medical/surgical benefits in the same 
classification. Specifically, for purposes of determining comparability 
and stringency under the design and application requirements of 26 CFR 
54.49812-1(c)(4)(ii)(A), 29 CFR 2590.712(c)(4)(ii)(A), and 45 CFR 
146.136(c)(4)(ii)(A), these proposed rules would prohibit plans and 
issuers from relying upon any factor or evidentiary standard if the 
information, evidence, sources, or standards on which the factor or 
evidentiary standard is based discriminates against mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits. Various factors and evidentiary standards that plans and 
issuers have previously relied on, or currently rely on, to design or 
apply NQTLs to mental health or substance use disorder benefits might 
themselves discriminate against mental health and substance use 
disorder benefits by treating them in a different and less favorable 
manner. Consistent with MHPAEA's fundamental purpose, the Departments 
are of the view that plans and issuers should not be permitted to rely 
on such factors or evidentiary standards to design and apply an NQTL if 
the information, evidence, sources, or standards on which the factor or 
evidentiary standard is based discriminates against mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits. These proposed rules establish this requirement as a 
threshold component of the analysis that a plan or issuer would be 
required to undertake when analyzing an NQTL's compliance with the 
design and application requirements under these proposed rules.\123\
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    \123\ The Departments note that the prohibition on 
discriminatory factors and evidentiary standards in proposed 26 CFR 
54.49812-1(c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(ii)(B), and 45 CFR 
146.136(c)(4)(ii)(B) is not intended to affect the application of 
any other Federal or State laws for other purposes, and solicit 
comments on any potential interactions with other such laws that may 
warrant additional clarification.
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    For purposes of these proposed rules, independent professional 
medical or clinical standards described in proposed 26 CFR 54.49812-
1(c)(4)(v)(A), 29 CFR 2590.712(c)(4)(v)(A), and 45 CFR 
146.136(c)(4)(v)(A) would not be considered to discriminate against 
mental health or substance use disorder benefits, consistent with the 
exceptions to other requirements for NQTLs in described elsewhere in 
this preamble. Similarly, standards related to fraud, waste, and abuse 
under proposed 26 CFR 54.49812-1(c)(4)(v)(B), 29 CFR 
2590.712(c)(4)(v)(B), and 45 CFR 146.136(c)(4)(v)(B) would also not be 
considered to discriminate against mental health or substance use 
disorder benefits. The Departments request comments on this approach. 
The Departments also solicit comments on any additional clarifications 
necessary for plans and issuers to apply this standard with respect to 
NQTLs applicable to mental health and substance use disorder benefits, 
as the term ``discriminate'' is proposed to be defined in these 
proposed rules.
    Under these proposed rules, information is considered to 
discriminate against mental health or substance use disorder benefits 
if it is biased or not objective, in a manner that results in less 
favorable treatment of mental health or substance use disorder 
benefits, based on all the relevant facts and circumstances. Such 
relevant facts and circumstances include, but are not limited to, the 
source of the information, the purpose or context of the information, 
and the content of the information. Therefore, plans and issuers would 
not be permitted to rely on information that reflects bias, as those 
factors or evidentiary standards would be discriminatory under these 
proposed rules. For this purpose, the Departments are of the view that 
information that results in the less favorable treatment of mental 
health and substance use disorder benefits without legitimate 
justification or that is otherwise not objective would be considered to 
be biased and to discriminate against mental health and substance use 
disorder benefits. Under these proposed rules, the determination of 
whether information is objective and unbiased would be based on all the 
relevant facts and circumstances including, but not limited to, the 
source of the information, the purpose or context of the information, 
and the content of the information. When determining which information, 
evidence, sources, or standards should inform the factors or 
evidentiary standards used to design or apply an NQTL, plans and 
issuers would not be permitted under these proposed rules to use 
information, evidence, sources, or standards if they are biased in 
favor of imposing greater restrictions on access to covered mental 
health and substance use disorder benefits or not objective, based on 
all the relevant facts and circumstances.
    More specifically, the proposed rules would prohibit plans and 
issuers from relying on historical plan data or other historical 
information from a time when the plan or coverage was not subject to 
MHPAEA or was in violation of MHPAEA's requirements where the use of 
such data results in less favorable treatment of mental health and 
substance use disorder benefits. As an example, under these proposed 
rules, a plan or issuer would not be permitted to calculate 
reimbursement rates based on historical data on total plan spending for 
each specialty that is divided between mental health and substance use 
disorder providers and medical/surgical providers, when the total 
spending by the plan was based on a time period when the plan or 
coverage was not subject to MHPAEA or was in violation of MHPAEA, if 
the data results in less favorable treatment of mental health and 
substance use disorder benefits. Consequently, plans and issuers could 
not use such data to develop a factor or evidentiary standard for the 
design or application of an NQTL to mental health or substance use 
disorder benefits.
    Under these proposed rules, to the extent a plan or issuer relies 
on any factor or evidentiary standard that discriminates against mental 
health or substance use disorder benefits, or any information, 
evidence, sources, or standards that inform such factors or evidentiary 
standards to design and apply NQTLs, the plan or issuer violates the 
requirement set forth in proposed 26 CFR 54.9812-1(c)(4)(ii)(B), 29 CFR 
2590.712(c)(4)(ii)(B), and 45 CFR 146.136(c)(4)(ii)(B). The Departments 
request comments on all aspects of these provisions of the proposed 
rules, including whether additional definitions are necessary to comply 
with these requirements.
c. Illustrative, Non-Exhaustive List of NQTLs--26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii)
    These proposed rules, if finalized, would move the illustrative, 
non-exhaustive list of NQTLs from 26 CFR 54.9812-1(c)(4)(ii), 29 CFR 
2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii) to 26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) 
and make several minor changes to this provision. First, these proposed 
rules would amend this provision to make clear that this illustrative 
list of NQTLs is non-exhaustive and that there are additional NQTLs not 
listed in this paragraph.\124\

[[Page 51574]]

As stated in the definition of the term ``treatment limitations'' in 
the 2013 final regulations and these proposed rules, an NQTL is any 
provision that limits the scope or duration of benefits for treatment 
under a plan or coverage that is not a quantitative treatment 
limitation. Some interested parties have requested that the Departments 
issue an exhaustive list of NQTLs to provide clarity as to the exact 
provisions for which plans and issuers are expected to perform and 
document comparative analyses pursuant to the CAA, 2021. Others have 
asked the Departments not to provide such a list, asserting that doing 
so could encourage plans and issuers to create new NQTLs outside the 
list or rename NQTLs in an attempt to circumvent MHPAEA's requirements.
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    \124\ The Departments are also proposing to add the term ``non-
exhaustive'' to cross-references to the illustrative, non-exhaustive 
list of NQTLs, contained in the definition of ``treatment 
limitations'' in 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), and 45 CFR 
146.136(a) and in the clarification of the term ``type of financial 
requirement or treatment limitation'' in 26 CFR 54.9812-1(c)(1)(ii), 
29 CFR 2590.712(c)(1)(ii), and 45 CFR 146.136(c)(1)(ii).
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    Because of the broad scope of the meaning of the term 
``nonquantitative treatment limitation,'' \125\ and the fact that plan 
or coverage terms that otherwise limit the scope or duration of 
benefits for treatment in similar ways may use different terminology, 
the Departments are not proposing to issue an exhaustive list of NQTLs. 
However, the Departments are proposing to add examples of additional 
NQTLs to these proposed rules, as discussed later in this preamble. 
Previous Reports to Congress \126\ also include lists of the NQTLs that 
have been the subject of comparative analyses reviewed by the 
Departments. Additionally, the 2020 MHPAEA Self-Compliance Tool 
provides an illustrative, non-exhaustive list of NQTLs.\127\ As the 
Departments encounter additional NQTLs, the Departments expect to 
highlight them in future resources. The list of NQTLs, therefore, is 
more accurately framed as a non-exhaustive list of examples that can be 
updated, as appropriate, as part of the resources the Departments make 
available to assist the regulated community and interested parties in 
their efforts to understand and comply with MHPAEA.
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    \125\ 26 CFR 54.9812-1(a), 29 CFR 2590.712(a), and 45 CFR 
146.136(a) state that ``[t]reatment limitations include . . . 
nonquantitative treatment limitations, which otherwise limit the 
scope or duration of benefits for treatment under a plan or 
coverage.''
    \126\ See, e.g., 2022 MHPAEA Report to Congress, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf and https://www.cms.gov/files/document/2022-mhpaea-report-congress.pdf.
    \127\ Self-Compliance Tool for the Mental Health Parity and 
Addiction Equity Act (MHPAEA) (2020), available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
---------------------------------------------------------------------------

    These proposed rules would also amend the illustrative, non-
exhaustive list of NQTLs to replace ``[s]tandards for provider 
admission to participate in a network, including reimbursement rates'' 
with ``standards related to network composition, including but not 
limited to, standards for provider and facility admission to 
participate in a network or for continued network participation, 
including methods for determining reimbursement rates, credentialing 
standards, and procedures for ensuring the network includes an adequate 
number of each category of provider and facility to provide covered 
services under the plan or coverage.'' The standards that govern how 
the network is constructed and defined are critical limitations on the 
availability of benefits under the plan or coverage. Accordingly, the 
Departments reaffirm that standards related to network composition are 
subject to the requirements applicable to NQTLs, including their design 
and application as set forth in these proposed rules. Standards related 
to network composition operate to limit the scope or duration of 
benefits for treatment--a fundamental characteristic of an NQTL. The 
design, administration, and composition of networks that comply with 
MHPAEA's requirements are essential to participants and beneficiaries 
having access to treatment for mental health conditions and substance 
use disorders in parity with medical/surgical benefits.
    Additionally, the Departments recognize that some plans and issuers 
use other related NQTLs, such as credentialing standards, to help 
ensure an adequate number of available providers as part of their 
standards related to network composition. Therefore, the Departments 
propose to specifically include credentialing standards and procedures 
for ensuring the network includes an adequate number of each category 
of mental health and substance use disorder providers and facilities 
relative to the number of medical/surgical providers and facilities in 
the illustrative, non-exhaustive list of NQTLs to make clear that plans 
and issuers setting standards to participate in a network through the 
application of one or more NQTLs would be required to satisfy the 
requirements for NQTLs under these proposed rules.
    In the 2013 final regulations, the phrase ``usual, customary, and 
reasonable charges,'' found in the illustrative list of NQTLs is often 
used to refer to a plan's method for determining out-of-network rates. 
However, the Departments are aware that plans and issuers may use other 
methods to determine out-of-network rates, such as using a percentage 
of Medicare rates.\128\ These proposed rules therefore would amend the 
description of this illustrative NQTL to encompass a broader range of 
methods for determining out-of-network rates, such as allowed amounts; 
usual, customary, and reasonable charges; or application of other 
external benchmarks for out-of-network rates.
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    \128\ See NY Times, Insurers Alter Cost Formula, and Patients 
Pay More, available at https://www.nytimes.com/2012/04/24/nyregion/health-insurers-switch-baseline-for-out-of-network-charges.html; 
FairHealth, ``Types of Out-of-Network Reimbursement,'' available at 
https://www.fairhealthprovider.org/download/your-costs/Types%20of%20Out-of-Network%20Reimbursement.pdf.
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    Finally, these proposed rules would add a specific reference to 
prior authorization requirements as an example of a medical management 
standard limiting or excluding benefits based on medical necessity or 
medical appropriateness, consistent with Example 1 in 26 CFR 54.9812-
1(c)(4)(iii), 29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii) 
of the 2013 final regulations. In addition to proposing amendments to 
the NQTLs included in the illustrative, non-exhaustive list codified in 
this provision, the Departments emphasize that even if an NQTL is not 
included on this list, a plan or issuer is not excused from compliance 
with the same standards and framework outlined in these proposed rules. 
That is, the many other NQTLs not included in the list codified in this 
provision would also be subject to the same standards and framework 
outlined in these proposed rules. Examples of additional NQTLs not 
listed include, but are not limited to, concurrent care review; billing 
restrictions, such as a requirement for a licensed provider to bill 
through or under the supervision of another type of licensed provider; 
retrospective review; treatment plan requirements; refusal to cover 
treatment until completion of a comprehensive assessment by specific 
providers; outlier management; and limitations based on expectation of 
improvement, likelihood of progress, or demonstration of progress. The 
Departments request comments on the proposed amendments to this 
provision and additional clarifications that may be necessary with 
respect to specific NQTLs listed.

[[Page 51575]]

d. Required Use of Outcomes Data and Special Rule for NQTLs Related to 
Network Composition--26 CFR 54.9812-1(c)(4)(iv), 29 CFR 
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv)
    As the Departments have highlighted in previous guidance, 
substantially disparate results are often a red flag that a plan or 
issuer may be imposing an NQTL in a manner that does not comply with 
MHPAEA.\129\ The Departments are of the view that relevant outcomes 
data should be collected and evaluated as part of analyzing whether an 
NQTL with respect to mental health or substance use disorder benefits 
in a classification, is more restrictive, in operation, than the 
predominant NQTL that is applied to substantially all medical/surgical 
benefits in the classification. Additionally, the comparative analysis 
requirement added to MHPAEA by the CAA, 2021 requires a demonstration 
of whether the processes, strategies, evidentiary standards, and other 
factors used to apply an NQTL to mental health or substance use 
disorder benefits, as written and in operation, are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, and other factors used to apply the NQTL to 
medical/surgical benefits in a classification.\130\
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    \129\ 2020 MHPAEA Self-Compliance Tool; see FAQs Part 39, Q7.
    \130\ See Code section 9812(a)(8)(A)(iv), ERISA section 
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
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    In evaluating how such processes, strategies, evidentiary 
standards, and other factors are applied in operation, it is necessary 
to look at how the plan is administered in operation, which in the 
Departments' view necessarily requires review and consideration of 
quantitative outcomes data to get a sense of how the NQTL functions in 
the context of the plan's or issuer's administration and provision of 
benefits. For example, the Departments have highlighted in prior 
guidance that plans and issuers should have samples of covered and 
denied mental health and substance use disorder and medical/surgical 
benefit claims available to support the comparative analysis.\131\ It 
is critical that a plan or issuer collect information to assess 
relevant data that show the outcomes that result from the application 
of an NQTL, evaluate those outcomes (which, as stated earlier in this 
preamble, may be a red flag that the plan or issuer is imposing an 
impermissible NQTL that disparately impacts access to covered mental 
health or substance use disorder benefits), and take reasonable action 
as necessary to address any material differences in access.
---------------------------------------------------------------------------

    \131\ See FAQs Part 45, Q4.
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    Of particular concern to the Departments are the NQTLs described in 
26 CFR 54.9812-1(c)(4)(iii)(D), 29 CFR 2590.712(c)(4)(iii)(D), and 45 
CFR 146.136(c)(4)(iii)(D) of these proposed rules. These NQTLs involve 
standards related to network composition, which include but are not 
limited to, standards for provider and facility admission to 
participate in a network or for continued network participation, 
including methods for determining reimbursement rates, credentialing 
standards, and procedures for ensuring the network includes an adequate 
number of each category of provider and facility to provide services 
under the plan or coverage. These standards are critical to ensuring 
parity in access to mental health and substance use disorder benefits 
for participants and beneficiaries. The Departments are also aware that 
there is a growing disparity between in-network reimbursement rates for 
mental health and substance use disorder providers and medical/surgical 
providers, which may more negatively impact access under a plan or 
coverage to mental health and substance use disorder benefits as 
compared with medical/surgical benefits.\132\ Additionally, there is a 
significant disparity between how often participants and beneficiaries 
have little or no choice under their plan or coverage but to utilize 
out-of-network mental health and substance use disorder providers and 
facilities, as compared to medical/surgical providers and 
facilities.\133\
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    \132\ Melek, S., Davenport, S., Gray, T.J. (2019). Addiction and 
mental health vs. physical health: Widening disparities in network 
use and provider reimbursement (p. 6). Milliman. https://assets.milliman.com/ektron/Addiction_and_mental_health_vs_physical_health_Widening_disparities_in_network_use_and_provider_reimbursement.pdf.
    \133\  Id.
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    Therefore, the Departments propose to add a requirement to provide 
that, when designing and applying an NQTL, a plan or issuer must 
collect and evaluate relevant data in a manner reasonably designed to 
assess the impact of the NQTL on access to mental health and substance 
use disorder benefits and medical/surgical benefits, and consider the 
impact as part of the plan's or issuer's analysis of whether such NQTL, 
in operation, complies with proposed 26 CFR 54.9812-1(c)(4)(i) and 
(ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) 
and (ii). These proposed rules would permit the Departments to specify 
the type, form, and manner for this data collection and evaluation in 
future guidance.
    Under these proposed rules, the relevant data that a plan or issuer 
would be required to collect and evaluate for all NQTLs (in each 
individual comparative analysis) includes, but is not limited to, the 
number and percentage of relevant claims denials, as well as any other 
data relevant to the NQTLs as required by State law or private 
accreditation standards. The Departments seek comments on whether plans 
and issuers collect such data as part of their normal business 
operations, as well as whether there are NQTLs for which the number and 
percentage of relevant claims denials would not be relevant for 
evaluating the impact of the NQTL. The Departments also seek comments 
on any additional guidance plans and issuers would need to comply with 
the requirements of proposed 26 CFR 54.9812-1(c)(4)(iv), 29 CFR 
2590.712(c)(4)(iv), and 45 CFR 146.136(c)(4)(iv) for newly imposed 
NQTLs or for NQTLs imposed by new plans or issuers, for which relevant 
data may not be immediately available.
    Moreover, because of the Departments' specific concerns about 
standards related to network composition and other related NQTLs, these 
proposed rules would require that, in addition to the relevant data 
required for all NQTLs, plans and issuers must collect and evaluate 
additional relevant data for NQTLs related to network composition. Such 
data would include, but would not be limited to, in-network and out-of-
network utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges). While 
this list of data for NQTLs related to network composition is not 
reflective of the full list of data that plans and issuers often use to 
assess their networks, these specific data points provide a cross-
section of relevant data points that the Departments have looked at in 
their MHPAEA compliance reviews and investigations, or that States and 
other interested parties have found useful.\134\

[[Page 51576]]

The Departments solicit comments on these specific data points, 
including whether provider reimbursement rates should be compared to 
Medicare reimbursement rates as an alternative to billed charges or 
another external benchmark.
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    \134\ See, e.g., 2020 MHPAEA Self-Compliance Tool, Appendix II 
available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf; 
Washington State, Model Data Definitions and Methodology Form (used 
by Washington State for their Second Market Scan), available at 
http://www.mhtari.org/model-data-definitions-method.pdf; Maryland, 
Instructions for Completing Data Supplement 1 Report (Utilization 
Review) Form, available at https://insurance.maryland.gov/Consumer/Pages/workgroups.aspx.
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    Pursuant to these proposed rules, to the extent the relevant data 
evaluated under these proposed rules reveal material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, the differences would be considered a 
strong indicator that the plan or issuer violates proposed 26 CFR 
54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 
CFR 146.136(c)(4)(i) and (ii). While under this provision, material 
differences alone would not be dispositive (except, as discussed below, 
for NQTLs related to network composition), and would not automatically 
result in a finding of noncompliance, a plan or issuer would be 
required to take reasonable action to address any material differences 
in access as necessary to ensure compliance, in operation, with 26 CFR 
54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 
CFR 146.136(c)(4)(i) and (ii) of these proposed rules. Whether any 
particular action would be considered reasonable in response to any 
given material differences in access resulting from an evaluation of 
outcomes data would be determined based on the relevant facts and 
circumstances, including the NQTL itself, the relevant data, the extent 
of the material differences in access to mental health and substance 
use disorder benefits as compared to medical/surgical benefits, and the 
impact of the material differences in access on participants and 
beneficiaries. The Departments also solicit comments on what additional 
information is necessary to clarify what would constitute reasonable 
action in response to relevant data that reveals material differences 
in access.
    In addition to taking reasonable action to address material 
differences in access, the plan or issuer would also be required to 
document in their comparative analyses any such action that has been or 
is being taken by the plan or issuer to mitigate those material 
differences, under proposed 26 CFR 54.9812-2(c)(5)(v), 29 CFR 2590.712-
1(c)(5)(v), and 45 CFR 146.137(c)(5)(v), as discussed later in this 
preamble. This requirement would allow plans and issuers to explain why 
material differences in access demonstrated by the outcomes data should 
not result in a violation of the rules for NQTLs. The Departments 
solicit comments on all aspects of the material difference standard at 
proposed 26 CFR 54.9812-1(c)(4)(iv)(B), 29 CFR 2590.712(c)(4)(iv)(B), 
and 45 CFR 146.136(c)(4)(iv)(B), including how to define a material 
difference in access. The Departments are particularly interested in 
comments regarding how ``material difference'' could be defined in a 
manner that translates into tangible quantitative research methods that 
would ensure that data is analyzed using statistical tools and results 
in meaningful information for plans and issuers to use in addressing 
barriers to accessing benefits. Specifically, the Departments seek 
comment on whether materiality should be defined in terms of the 
results of statistical testing and request feedback from interested 
parties on the optimal method for assembling data and statistical 
analysis.
    Network composition is the result of the design and application of 
a myriad of NQTLs and is informed by various processes, strategies, 
evidentiary standards, and other factors, many of which interact in 
complex ways and are often either difficult to evaluate separately, or 
do not portray an adequate picture of the overall relative impact on 
access when analyzed separately. For example, plans and issuers may 
develop or consult several standards to help inform their network 
composition, such as State licensing standards, quality and performance 
metrics, patient utilization in particular geographic regions, and 
overall provider availability. Because plans and issuers generally look 
to the cumulative effect of such standards, practices, and strategies 
when designing their networks, it is important that plans and issuers 
also look to the cumulative effect of such standards, practices, and 
strategies when evaluating any data and standards related to network 
composition for compliance with MHPAEA.
    The Departments are concerned that some plans or issuers may define 
their NQTLs related to network composition in a way that silos 
interrelated processes, strategies, and evidentiary standards that 
should be evaluated together under a plan's or issuer's standards 
related to network composition. In the Departments' view, all NQTLs 
related to network composition, taken together, must be designed and 
applied in compliance with MHPAEA's parity requirements to ensure that 
networks do not materially disfavor access to mental health and 
substance use disorder benefits when compared to medical/surgical 
benefits. Furthermore, because such NQTLs will inherently impact a 
participant's or beneficiary's access to mental health and substance 
use disorder benefits, the Departments are of the view that material 
differences in access shown by outcomes data related to such NQTLs 
should be subject to a higher level of scrutiny than for other NQTLs.
    Accordingly, these proposed rules include a special rule for NQTLs 
related to network composition. Under these proposed rules at 26 CFR 
54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), and 45 CFR 
146.136(c)(4)(iv)(C), when designing and applying one or more NQTLs 
related to network composition standards, a plan or issuer fails to 
meet the requirements of proposed 26 CFR 54.9812-1(c)(4)(i) and (ii), 
29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) and 
(ii), in operation, if the relevant data show material differences in 
access to in-network mental health or substance use disorder benefits 
as compared to in-network medical/surgical benefits in a 
classification. The Departments also solicit comments on the likely 
impacts, costs, and benefits of treating network composition as an NQTL 
for purposes of the regulation, as opposed to treating it merely as an 
outcome of other NQTLs. To what extent would such an approach better 
promote equal access to networks? What are potential unintended 
consequences or implementation issues? In soliciting these comments, 
the Departments recognize that there is no one established and 
universal set of metrics for determining the parity of networks, and 
that parity across mental health and substance use disorder and 
medical/surgical networks does not necessarily mean equal number of 
providers in a classification. As such, the Departments recognize that 
different plans and issuers may take different approaches to ensuring 
that their mental health and substance use disorder networks are as 
robust as their medical/surgical networks. The Departments also 
recognize that there may be significant challenges for some plans and 
issuers to ensure that their mental health and substance use disorder 
networks are not more restrictive in operation than their medical/
surgical networks. Accordingly, in addition to the comments solicited 
in the accompanying Technical Release 2023-01P discussed later in this 
preamble, the Departments solicit comments in this document on ways to 
compare or assess the parity of mental health and substance use 
disorder and

[[Page 51577]]

medical/surgical networks, while accommodating the different approaches 
and different challenges that plans and issuers face in building strong 
mental health and substance use disorder and medical/surgical networks.
    The Departments are aware that some plans and issuers rely on 
minimum time and distance standards set by a private accreditation 
organization or by other Federal or State programs as the basis for a 
factor or evidentiary standard for an NQTL related to network 
composition. Under these proposed rules, plans and issuers would not be 
permitted to solely rely on this information as an evidentiary standard 
or to inform a factor used to design and apply an NQTL, unless the plan 
or issuer complies with the relevant data evaluation requirements and 
the special rule for NQTLs related to network composition to determine 
whether the relevant data show material differences in access to in-
network mental health or substance use disorder benefits as compared to 
in-network medical/surgical benefits in a classification. The 
Departments are of the view that minimum time and distance standards 
set by a private accreditation organization or by other Federal or 
State programs may provide a helpful starting point for plans and 
issuers to develop factors or evidentiary standards but note that these 
standards are often not designed with purposes of MHPAEA compliance in 
mind. Therefore, to comply with the relevant data evaluation 
requirements and the special rule for NQTLs related to network 
composition under these proposed rules, a plan or issuer may need to go 
beyond the minimum times and distances outlined in such standards, and 
also ensure that they do not result in less favorable treatment for 
mental health and substance use disorder benefits under the plan or 
coverage, based on all the relevant facts and circumstances. The 
Departments solicit comments on what additional clarifications are 
needed on how this proposed provision would apply to the use of private 
accreditation standards and other Federal or State program standards.
    Plans and issuers would be required to take action to address 
material differences in access or no longer impose the relevant NQTLs. 
Such actions could include, for example, ensuring that they or their 
service providers (as applicable) make special efforts to contract with 
a broad range of mental health and substance use disorder providers who 
are available, including authorizing greater compensation or other 
inducements to the extent necessary; expanding telehealth arrangements 
as appropriate to manage regional shortages; notifying participants and 
beneficiaries in clear and prominent language on the website, employee 
brochures, and the summary plan description of a toll-free number for 
help finding in-network providers; ensuring that the plan's or issuer's 
service providers (as applicable) reach out to the treating 
professionals and facilities to see if they will enroll in the network; 
and ensuring the network directories are accurate and reliable.
    The Departments recognize that shortages of mental health and 
substance use disorder providers could pose challenges to issuers, 
plans, and their service providers.\135\ If, despite taking appropriate 
action, the relevant data continues to reveal material differences in 
access, such as, because of provider shortages that the plan or issuer 
cannot effectively address through no fault of its own, the Departments 
would not cite such a plan or issuer for failure to comply with 26 CFR 
54.9812-1(c)(4)(iv), 29 CFR 2590.712(c)(4)(iv), and 45 CFR 
146.136(c)(4)(iv) with respect to the plan's or issuer's NQTL(s) 
related to network composition if the plan or issuer otherwise complied 
with the other applicable MHPAEA requirements. Plans and issuers should 
be prepared, however, to document the actions they have taken and to 
demonstrate why any disparities are attributable to provider shortages 
in the geographic area, rather than their NQTLs related to network 
composition. The Departments request comments on this provision, 
including on whether and how to allow plans and issuers to account for 
external circumstances that impact material differences in access. The 
Departments specifically request comment on how to ensure that any 
permitted allowances would be sufficiently narrow so they do not permit 
plans and issuers to inappropriately rely on external circumstances, 
including provider shortages, as a reason they cannot comply with this 
provision, and similarly welcome comments on the types of external 
circumstances, actions, and responses that should be treated as 
properly mitigating materially different access shown by outcomes data.
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    \135\ See White House Issue Brief, Reducing the Economic Burden 
of Unmet Mental Health Needs, available at https://www.whitehouse.gov/cea/written-materials/2022/05/31/reducing-the-economic-burden-of-unmet-mental-health-needs/ (acknowledging that 
provider shortages exist and 37% of the population live in areas 
with mental health practitioner shortages).
---------------------------------------------------------------------------

    These proposed rules would also specify that plans and issuers are 
not required to comply with the relevant data evaluation requirements 
for NQTLs that impartially apply generally recognized independent 
professional medical or clinical standards, consistent with the 
exceptions to other requirements for NQTLs described elsewhere in this 
preamble. The Departments solicit comments regarding the degree to 
which such NQTLs would cause material differences in access revealed by 
the proposed data that plans and issuers would be required to evaluate 
with respect to other NQTLs, and how these rules should address multi-
faceted causation of material differences in access. Proposed 26 CFR 
54.49812-1(c)(4)(iv)(D), 29 CFR 2590.712(c)(4)(iv)(D), and 45 CFR 
146.136(c)(4)(iv)(D) would not provide a comparable exception for 
standards related to fraud, waste, and abuse. As a result, for these 
standards, plans and issuers would be required to comply with the 
relevant data evaluation requirements under these proposed rules. While 
standards related to fraud, waste, and abuse are important tools for 
plans and issuers, the Departments are of the view that those tools are 
more likely than independent professional medical or clinical standards 
to result in NQTLs that improperly restrict access to mental health or 
substance use disorder benefits and the impact of those NQTLs on access 
to mental health and substance use disorder benefits should be 
assessed. Therefore, the Departments propose that plans and issuers 
that apply NQTLs to detect or prevent and prove fraud, waste, and abuse 
to mental health and substance use disorder benefits in a 
classification would be required to comply with the relevant data 
evaluation requirements with respect to those NQTLs. The Departments 
solicit comments on these proposals related to the relevant data 
evaluation requirements and the special rule for NQTLs related to 
network composition, including whether plans and issuers (and their 
service providers) generally collect this data as part of their normal 
business operations.
    Contemporaneously with these proposed rules, DOL is issuing 
Technical Release 2023-01P that sets out principles and seeks public 
comment to inform future guidance with respect to required data 
submissions for NQTLs related to network composition and a potential 
enforcement safe harbor.\136\ Specifically,

[[Page 51578]]

the Technical Release solicits feedback on the type, form, and manner 
for the data that plans and issuers would be required to include, along 
with other relevant data as appropriate, as part of their comparative 
analyses for NQTLs related to network composition (which must be 
submitted to the Departments upon request). The Technical Release also 
solicits feedback on how to define certain thresholds for required data 
and a potential enforcement safe harbor to be specified in future 
guidance that, if satisfied, would demonstrate to the Departments that 
a plan or coverage provides comparable access to in-network of 
providers for mental health and substance use disorder benefits as 
compared to medical/surgical benefits. In turn, if the safe harbor 
threshold is met, the plan or issuer would not be subject to Federal 
enforcement under MHPAEA with respect to NQTLs related to network 
composition for a specified period of time. The Departments encourage 
interested parties to review the Technical Release and submit their 
comments consistent with the instructions contained in it (separate 
from any comments they submit in response to these proposed rules). The 
Departments also solicit comments on this approach, including whether 
the Departments should incorporate additional specific data elements, 
such as those collected by States, into these proposed rules.
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    \136\ The Technical Release was developed in collaboration with 
HHS and Treasury, and all comments submitted to DOL will be shared 
with them and posted on the EBSA website.
---------------------------------------------------------------------------

e. Independent Professional Medical or Clinical Standards and Standards 
to Detect or Prevent and Prove Fraud, Waste, and Abuse--26 CFR 54.9812-
1(c)(4)(v), 29 CFR 2590.712(c)(4)(v), and 45 CFR 146.136(c)(4)(v)
    As explained earlier in this preamble, the Departments do not 
intend to interfere with a plan's or issuer's attempts to ensure that 
NQTLs for benefits for treatment of mental health conditions or 
substance use disorders are consistent with generally accepted 
independent professional medical or clinical standards of care or are 
appropriately designed and carefully circumscribed measures used solely 
for the purpose of detecting or preventing and proving fraud, waste, 
and abuse. The Departments recognize that the application of generally 
recognized independent professional medical or clinical standards and 
appropriately designed and carefully circumscribed fraud, waste, and 
abuse measures generally improve care and outcomes for participants and 
beneficiaries, rather than restrict access to benefits.
    Therefore, as discussed earlier in this preamble, the Departments 
propose to provide exceptions to the proposed requirements in 26 CFR 
54.9812-1(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv), 29 CFR 
2590.712(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv), and 45 CFR 
146.136(c)(4)(i), (c)(4)(ii)(B), and (c)(4)(iv) (the no more 
restrictive requirements, the prohibition on discriminatory factors and 
evidentiary standards, and the relevant data evaluation requirements) 
for NQTLs that impartially apply generally recognized independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care) to medical/surgical benefits and mental 
health or substance use disorder benefits. Under these proposed rules, 
the exception would not be available to any plan or issuer with respect 
to an NQTL that fails to impartially apply such standards, or deviates 
from those standards in any way, such as by imposing additional or 
different requirements.
    The Departments also propose to provide an exception to the 
proposed no more restrictive requirements in 26 CFR 54.9812-1(c)(4)(i) 
and (c)(4)(ii)(B), 29 CFR 2590.712(c)(4)(i) and (c)(4)(ii)(B), and 45 
CFR 146.136(c)(4)(i) and (c)(4)(ii)(B) for NQTLs reasonably designed to 
detect or prevent, and prove fraud, waste, and abuse, based on indicia 
of fraud, waste, and abuse that have been reliably established through 
objective and unbiased data. Additionally, these proposed rules would 
require such NQTLs to also be narrowly designed to minimize the 
negative impact on access to appropriate mental health and substance 
use disorder benefits. The Departments believe NQTLs reasonably 
designed to detect or prevent and prove fraud, waste, and abuse can 
help improve the overall efficiency of the health care delivery system 
and play an important role in safeguarding the interests of 
participants and beneficiaries, where narrowly designed to avoid 
creating more restrictive limitations on access to mental health and 
substance use disorder benefits. To ensure that NQTLs reasonably 
designed to detect or prevent and prove fraud, waste, and abuse are 
also narrowly designed to minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits, such 
NQTLs are still subject to the relevant data evaluation requirements. 
Additionally, these proposed rules do not provide any exception from 
the design and application requirements under 26 CFR 54.9812-
1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 146.136(c)(4)(ii), 
although as discussed earlier in this preamble, NQTLs that apply 
independent professional medical or clinical standards or standards 
related to fraud, waste, and abuse in a manner that meets the 
requirements of this section would not be considered to discriminate 
against mental health or substance use disorder benefits. The only 
circumstances in which plans and issuers would not be required to 
satisfy all three of the requirements of proposed 26 CFR 54.9812-
1(c)(4)(i), (ii), and (iv); 29 CFR 2590.712(c)(4)(i), (ii), and (iv); 
and 45 CFR 146.136(c)(4)(i), (ii), and (iv) to meet their obligations 
to demonstrate compliance with MHPAEA's parity requirements for NQTLs 
would be if the NQTL is subject to one of these two exceptions. In 
instances that an NQTL qualifies for one of these exceptions, the plan 
or issuer would still be required to comply with the requirements for 
which the exception or exceptions do not apply.
    The Departments stress that these exceptions are not intended to 
create potential loopholes that would undermine the statutory 
requirement that NQTLs applied to mental health and substance use 
disorder benefits be no more restrictive than the predominant NQTLs 
applicable to substantially all medical/surgical benefits. If these 
rules are finalized as proposed and the Departments become aware of the 
creation of new standards for the purpose of imposing NQTLs that are 
more restrictive with respect to mental health and substance use 
disorder benefits (or the establishment of new organizations that 
create such standards), they may provide additional guidance consistent 
with MHPAEA's fundamental purpose, as necessary.
    The Departments solicit comments on these proposed exceptions, 
including ways to better or more specifically frame them (such as, for 
example, specifying that generally recognized independent professional 
medical or clinical standards must be independent, peer-reviewed, or 
unaffiliated with plans and issuers), consistent with the Departments' 
view that these exceptions should be narrowly tailored. The Departments 
also solicit comments on how the framework outlined in these proposed 
rules could be improved to better ensure that individuals with mental 
health conditions and substance use disorders benefit from MHPAEA's 
consumer protections, while also allowing plans and issuers to apply 
generally recognized independent professional medical or clinical 
standards and to adopt appropriate, narrowly tailored measures to 
detect or

[[Page 51579]]

prevent and prove fraud, waste, and abuse.
f. Effect of Final Determination of Noncompliance--26 CFR 54.9812-
1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii)
    The Departments propose to add language to these proposed rules 
specifying that, if a plan or issuer receives a final determination 
from the relevant Secretary that it is not in compliance with the 
requirements of proposed 26 CFR 54.9816-2, 29 CFR 2590.712-1, and 45 
CFR 146.137 with respect to an NQTL, the NQTL would violate 26 CFR 
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) and 
the relevant Secretary may direct the plan or issuer not to impose the 
NQTL, unless and until the plan or issuer demonstrates to the relevant 
Secretary compliance with the requirements of MHPAEA or takes 
appropriate action to remedy the violation. Whereas the requirement in 
the introductory paragraph of 26 CFR 54.9812-1(c)(4), 29 CFR 
2590.712(c)(4), and 45 CFR 146.136(c)(4) states that a plan or issuer 
may not impose an NQTL in the first instance unless it meets all of the 
applicable substantive requirements for NQTLs under these proposed 
rules, this proposed provision addresses the effect of a final 
determination of noncompliance with the NQTL comparative analysis 
documentation requirements under proposed 26 CFR 54.9812-2, 29 CFR 
2590.712-1, and 45 CFR 146.137.
    The MHPAEA statute requires ``such plan or coverage shall ensure 
that'' the treatment limitations comply with the substantive 
requirements of the statute.\137\ The statute further requires that the 
plan or issuer perform and document adequate comparative analyses for 
NQTLs to ensure compliance.\138\ Accordingly, under these proposed 
rules plans and issuers would be required to ensure that they are 
complying with MHPAEA's requirements at all times an NQTL is imposed 
with respect to mental health or substance use disorder benefits and, 
as explained later in this preamble, plans and issuers would be 
required to ensure that they have performed and documented comparative 
analyses for their NQTLs imposed on mental health or substance use 
disorder benefits (regardless of the timing of any request for such 
documentation) to ensure compliance. When a plan or issuer has not 
substantiated compliance with MHPAEA for an NQTL applied to mental 
health and substance use disorder benefits, the application of the NQTL 
also would violate MHPAEA. At the same time, the Departments 
acknowledge that whether and how to cease the application of an 
impermissible NQTL depends on the nature of the NQTL, the impact on 
access to mental health or substance use disorder benefits, and other 
facts and circumstances that are specific to a particular case.
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    \137\ Code section 9812(a)(3)(A), ERISA section 712(a)(3)(A), 
and PHS Act section 2726(a)(3)(A).
    \138\ Code section 9812(a)(8), ERISA section 712(a)(8), and PHS 
Act section 2726(a)(8).
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    Therefore, when a plan or issuer receives a final determination 
from the Departments with respect to an NQTL based on failure to 
demonstrate compliance with proposed 26 CFR 54.9816-2, 29 CFR 2590.712-
1, and 45 CFR 146.137, including because the plan or issuer has not 
submitted a sufficient comparative analysis to demonstrate compliance, 
these proposed rules would treat such a failure not only as a violation 
of the NQTL comparative analysis documentation requirements but also as 
a violation of the substantive NQTL rules under proposed 26 CFR 
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4). The 
Departments recognize that an immediate cessation of the application of 
an NQTL may not be feasible for all NQTLs; accordingly, a determination 
by the Departments of whether to require immediate cessation would be 
based on the evaluation of facts and circumstances involved in the 
specific violation and nature of the underlying NQTL. Such facts may 
include, for example, the level of disruption in the provision of 
benefits under the plan or coverage if the NQTL immediately ceased to 
apply, the practicality and complexities involved in the cessation of 
the NQTL, the effect on participants and beneficiaries and the likely 
time period needed to cease or modify the NQTL. The Departments also 
note that such determination would take into account feedback from the 
plan or issuer. These facts and circumstances would also be relevant to 
the Departments' assessment of the plan's or issuer's overall efforts 
to come into compliance with MHPAEA. The Departments stress that, as 
discussed later in this preamble, the review process for the NQTL 
comparative analyses allows multiple opportunities for plans and 
issuers to provide additional information to the Departments and 
correct a deficient or insufficient comparative analysis. The 
application of proposed 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 2590.712 
(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii) would be illustrated by a 
new proposed Example 7 of 26 CFR 54.9812-1(c)(4)(viii), 29 CFR 
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii), discussed later 
in this preamble. The Departments solicit comments on this proposed 
provision, including whether there are specific challenges or 
considerations the Departments should be cognizant of, as a general 
matter, in approaching situations that involve ceasing application of a 
particular NQTL.
g. NQTL Examples--26 CFR 54.9812-1(c)(4)(viii), 29 CFR 
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii)
    These proposed rules also would amend 26 CFR 54.9812-1(c)(4)(iii), 
29 CFR 2590.712(c)(4)(iii), and 45 CFR 146.136(c)(4)(iii), redesignated 
as part of these proposed rules as 26 CFR 54.9812-1(c)(4)(viii), 29 CFR 
2590.712(c)(4)(viii), and 45 CFR 146.136(c)(4)(viii). These proposed 
rules would revise some existing examples, remove other existing 
examples, and add several new examples to further demonstrate the rules 
of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 
146.136(c)(4), as proposed to be amended in these rules.
    In some cases, the Departments propose to revise existing examples 
to show how an NQTL would be analyzed under paragraph (c)(4) in 
accordance with the proposed amendments. In other cases, the 
Departments are proposing to replace existing examples with new fact 
patterns that would more clearly demonstrate how these proposed rules 
for NQTLs would apply to plans and issuers. In each example in 26 CFR 
54.9812-1(c)(4)(viii), 29 CFR 2590.712(c)(4)(viii), and 45 CFR 
146.136(c)(4)(viii), a group health plan is subject to the requirements 
of MHPAEA and provides coverage for both medical/surgical benefits and 
mental health and substance use disorder benefits. Additionally, in 
examples that conclude that the plan or issuer violates one provision 
of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 
146.136(c)(4), such examples do not necessarily imply compliance with 
all of the other relevant provisions (as these examples do not analyze 
compliance with all other provisions). The Departments solicit comments 
on these new examples and the proposed amendments to existing examples.
    Example 1--More restrictive prior authorization requirement in 
operation. First, the Departments propose to amend existing Example 1 
to illustrate the effect of a disparity in the routine approval of 
benefits for mental health

[[Page 51580]]

conditions and substance use disorders compared to benefits for 
medical/surgical conditions in a classification. This proposed amended 
example would retain similar facts to the existing example, in which a 
plan requires prior authorization from the plan's utilization reviewer 
that a treatment is medically necessary for all inpatient, in-network 
medical/surgical benefits and for all inpatient, in-network mental 
health and substance use disorder benefits. While the plan approves 
inpatient, in-network benefits for medical/surgical conditions for 
periods of 1, 3, and 7 days, after which a treatment plan must be 
submitted by the patient's attending provider and approved by the plan, 
the approvals for 7 days are most common under this plan. However, for 
mental health and substance use disorder benefits, the plan routinely 
approves only 1 day of inpatient, in-network benefits before a 
treatment plan must be submitted by the patient's attending provider 
and approved by the plan. In this example, the difference in the 
duration of approvals is not the result of independent professional 
medical or clinical standards or standards related to fraud, waste, and 
abuse, but rather reflects the application of a heightened standard to 
the provision of the mental health and substance use disorder benefits 
in the relevant classification.
    The existing conclusion to Example 1 states that the plan violates 
the no more restrictive requirement in 26 CFR 54.9812-1(c)(4)(i), 29 
CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) because it is 
applying a stricter NQTL in operation to mental health and substance 
use disorder benefits than is applied to medical/surgical benefits. The 
proposed amended conclusion would provide additional explanation to 
illustrate how the prior authorization NQTL would be analyzed under 
these proposed rules (and revise the conclusion to indicate that 
paragraph (c)(4)(i) of those sections would be redesignated as 
paragraph (c)(4)(ii)(A), and new requirements would be added at 
paragraph (c)(4)(i)). The proposed conclusion would explain that the 
NQTL applies to at least two-thirds of all medical/surgical benefits in 
the inpatient, in-network classification, because it applies to all 
inpatient medical/surgical benefits in that classification. The most 
common or frequent variation of this NQTL, and, therefore, the 
predominant NQTL that applies to medical/surgical benefits in the 
classification, is the routine approval of inpatient benefits for 7 
days before the patient's attending provider must submit a treatment 
plan. However, the plan routinely approves inpatient, in-network 
benefits for mental health and substance use disorder conditions for 
only 1 day before the patient's attending provider must submit a 
treatment plan. In doing so, the plan does not impartially apply 
independent professional medical or clinical standards or apply 
standards related to fraud, waste, and abuse that qualify for the 
exceptions in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR 
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E).
    In this proposed amended Example 1, in operation, the prior 
authorization NQTL imposed on mental health and substance use disorder 
benefits in the inpatient in-network classification is more restrictive 
than the predominant prior authorization requirement applicable to 
substantially all medical/surgical benefits in the classification, 
because the practice of approving 1 day of inpatient, in-network mental 
health and substance use disorder benefits limits access to the full 
range of treatment options available for benefits for a condition or 
disorder under the plan or coverage as compared to the routine 7-day 
approval that is given for inpatient, in-network medical/surgical 
benefits. As the prior authorization requirement violates the no more 
restrictive requirement, the proposed amended example does not address 
the other aspects of the NQTL parity analysis under these proposed 
rules (the design and application requirements or the relevant data 
evaluation requirements), because the plan would violate MHPAEA, even 
if it satisfied those requirements.
    Example 2--More restrictive peer-to-peer concurrent review 
requirements in operation. In new Example 2 in these proposed rules, a 
plan follows a written process for the concurrent review of all 
medical/surgical benefits and mental health and substance use disorder 
benefits within the inpatient, in-network classification. Under the 
process, a first-level review is conducted in every instance in which 
concurrent review applies, and an authorization request is approved by 
the first-level reviewer only if the clinical information submitted by 
the facility meets the plan's criteria for a continued stay. If the 
first-level reviewer is unable to approve the authorization request 
because the clinical information submitted by the facility does not 
meet the criteria for a continued stay, it is sent to a second-level 
reviewer who will either approve or deny the request. While the written 
process only requires review by the second-level reviewer to either 
deny or approve the request, in operation, second-level reviewers for 
mental health and substance use disorder benefits conduct a peer-to-
peer review with a provider (acting as the authorized representative of 
a participant or beneficiary) before coverage of the treatment is 
approved. The peer-to-peer review requirement is not the result of 
independent professional medical or clinical standards or standards 
related to fraud, waste, and abuse. The plan does not impose a peer-to-
peer review, as written or in operation, as part of the second-level 
review for medical/surgical benefits.
    In this proposed example, the concurrent review requirement 
violates the no more restrictive requirement at proposed 26 CFR 
54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i). The concurrent review NQTL applies to at least two-
thirds of all medical/surgical benefits within the inpatient, in-
network classification because the plan follows the concurrent review 
process for all medical/surgical benefits. The most common or frequent 
variation of this NQTL and, therefore, the predominant NQTL that 
applies to all medical/surgical benefits in the classification, is that 
peer-to-peer review is not imposed as part of second-level review. The 
plan does not impartially apply independent professional medical or 
clinical standards or apply standards related to fraud, waste, and 
abuse that qualify for the exceptions in 26 CFR 54.9812-1(c)(4)(i)(E), 
29 CFR 2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E) of these 
proposed rules. While, as written, the plan's concurrent review 
requirements are the same for medical/surgical benefits and mental 
health and substance use disorder benefits, in operation, by compelling 
an additional action (peer-to-peer review as part of second-level 
review) to access only mental health or substance use disorder 
benefits, the plan applies the concurrent review NQTL to mental health 
or substance use disorder benefits in a manner that is more restrictive 
than the predominant concurrent review requirements applied to 
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the no more 
restrictive requirement, the example does not analyze compliance with 
the design and application requirements or the relevant data evaluation 
requirements in these proposed rules.
    Example 3--More restrictive peer-to-peer review medical necessity 
standard in operation; deviation from independent professional medical 
and clinical standards. The Departments

[[Page 51581]]

propose to add new Example 3 focusing on the imposition of an 
additional NQTL (completion of peer-to-peer review) on benefits for 
substance use disorders that is more restrictive than the predominant 
NQTL applicable to substantially all medical/surgical benefits in the 
classification. In this example, the plan generally requires that all 
treatment be medically necessary in the inpatient, out-of-network 
classification. For both medical/surgical benefits and mental health 
and substance use disorder benefits, the written medical necessity 
standards are based on independent professional medical or clinical 
standards that do not require peer-to-peer review. In operation, the 
plan covers out-of-network benefits for medical/surgical or mental 
health inpatient treatment outside of a hospital if the physician 
documents medical appropriateness, but for out-of-network substance use 
disorder inpatient treatment outside of a hospital, the plan requires a 
physician to also complete peer-to-peer review.
    In this example, the plan violates proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i). The 
medical necessity NQTL applies to at least two-thirds of all medical/
surgical benefits in the out-of-network, inpatient classification. The 
most common or frequent variation of the NQTL and, therefore, the 
predominant NQTL that applies to substantially all medical/surgical 
benefits, is the requirement that a physician document medical 
appropriateness without peer-to-peer review. The plan purports to 
satisfy the exception for independent professional medical or clinical 
standards in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR 
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E), but deviates from 
those standards in operation by imposing the additional requirements to 
complete peer-to-peer review with respect to substance use disorder 
inpatient treatment outside of a hospital within the classification. As 
written, the plan provisions apply the NQTL to mental health and 
substance use disorder benefits in the inpatient, out-of-network 
classification in the same manner as for medical/surgical benefits. 
However, in operation, the medical necessity NQTL imposed on out-of-
network substance use disorder benefits for treatment outside of a 
hospital is more restrictive than the predominant NQTL applied to 
substantially all medical/surgical benefits in the classification 
because it limits access to the full range of treatment options 
available for a condition or disorder under the plan or coverage as 
compared to medical/surgical benefits. The NQTL is not the result of 
independent professional medical or clinical standards or standards 
related to fraud, waste, and abuse that qualify for the exceptions to 
the no more restrictive requirement under these proposed rules. Because 
the plan violates the no more restrictive requirement, the example does 
not analyze compliance with the design and application requirements or 
the relevant data evaluation requirements under these proposed rules.
    Example 4--Not comparable and more stringent methods for 
determining reimbursement rates in operation. New proposed Example 4 
would illustrate how plans and issuers must ensure compliance in 
operation with the design and application requirements under 26 CFR 
54.9812-1(c)(4)(ii), 29 CFR 2590.712(c)(4)(ii), and 45 CFR 
146.136(c)(4)(ii) for a plan's reimbursement rate methodology NQTL, 
based in part on guidance in FAQs Part 39.\139\ For purposes of this 
example, the facts assume that the plan's methods for determining 
reimbursement rates for mental health and substance use disorder 
benefits satisfy the no more restrictive requirement. In this example, 
a plan's base reimbursement rates for outpatient, in-network providers 
are determined based on a variety of factors, including the provider's 
required training, licensure, and expertise. As written, for mental 
health, substance use disorder, and medical/surgical benefits, all 
reimbursement rates for physicians and non-physician practitioners for 
the same Current Procedural Terminology (CPT) code vary based on a 
combination of factors, such as the nature of the service, provider 
type, number of providers qualified to provide the service in a given 
geographic area, and market need (demand). As a result, reimbursement 
rates for mental health, substance use disorder, and medical/surgical 
benefits furnished by non-physician providers are generally less than 
for physician providers. In operation, the plan reduces the 
reimbursement rate for mental health and substance use disorder non-
physician providers from that paid to mental health and substance use 
disorder physicians by the same percentage for every CPT code but does 
not do the same for non-physician medical/surgical providers.
---------------------------------------------------------------------------

    \139\ FAQs Part 39, Q6.
---------------------------------------------------------------------------

    In this proposed new example, the plan violates the design and 
application requirements under these proposed rules. Because the plan 
reimburses non-physician providers of mental health and substance use 
disorder services by reducing their reimbursement rate from the rate 
for physician providers by the same percentage for every CPT code, but 
does not apply the same reduction to non-physician providers of 
medical/surgical services, in operation, the factors used in applying 
the NQTL to mental health and substance use disorder benefits are not 
comparable to, and are applied more stringently than, the factors used 
in applying the limitation with respect to medical/surgical benefits. 
To continue to apply the current reimbursement rate methodology, the 
plan would need to ensure that the percentage reduction for mental 
health and substance use disorder non-physician providers complies with 
the design and application requirements as compared to the percentage 
reduction for medical/surgical non-physician providers. Because the 
plan violates the design and application requirements of these proposed 
rules, the example does not analyze compliance with the relevant data 
evaluation requirements (and the facts stipulate compliance with the no 
more restrictive requirement).
    Example 5--Exception for impartially applied generally recognized 
independent professional medical or clinical standards. In new proposed 
Example 5, a group health plan develops a medical management 
requirement for all inpatient, out-of-network benefits for both 
medical/surgical benefits and mental health and substance use disorder 
benefits to ensure treatment is medically necessary. The medical 
management requirement impartially applies independent professional 
medical or clinical standards in a manner that qualifies for the 
exception in proposed 26 CFR 54.9812-1(c)(4)(i)(E), 29 CFR 
2590.712(c)(4)(i)(E), and 45 CFR 146.136(c)(4)(i)(E). The plan does not 
rely on any other factors or evidentiary standards, and the processes, 
strategies, evidentiary standards, and other factors used in designing 
and applying the medical management requirement to mental health and 
substance use disorder benefits are comparable to, and are applied no 
more stringently than, the processes, strategies, evidentiary 
standards, and other factors used in designing and applying the 
requirement with respect to medical/surgical benefits. Within the 
inpatient, out-of-network classification, the application of the 
medical management requirement results in a higher percentage of 
denials for mental health and substance use

[[Page 51582]]

disorder claims than medical/surgical claims because the benefits were 
found to be medically necessary for a lower percentage of mental health 
and substance use disorder claims based on the impartial application of 
the independent professional medical or clinical standards by the NQTL.
    The proposed new example would conclude that the plan does not 
violate 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 
146.136(c)(4) of these proposed rules. The medical management NQTL 
imposed on mental health and substance use disorder benefits does not 
violate the no more restrictive requirement or the relevant data 
evaluation requirements because the plan impartially applies 
independent professional medical or clinical standards for both 
medical/surgical benefits and mental health and substance use disorder 
benefits in a manner that qualifies for the exception under proposed 26 
CFR 54.9812-1(c)(4)(i)(E) and (c)(4)(iv)(D), 29 CFR 
2590.712(c)(4)(i)(E) and (c)(4)(iv)(D), and 45 CFR 146.136(c)(4)(i)(E) 
and (c)(4)(iv)(D), respectively. Moreover, the independent professional 
medical or clinical standards are not considered to be a discriminatory 
factor or evidentiary standard and, as written and in operation, the 
plan complies with the design and application requirements with respect 
to the NQTL, regardless of the fact that the application of the NQTL 
resulted in higher percentages of claim denials for mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits.
    Example 6--More restrictive prior authorization requirement; 
exception for impartially applied generally recognized independent 
professional medical or clinical standards not met. New proposed 
Example 6 would incorporate guidance issued in FAQs Part 34,\140\ as 
well as these proposed rules. In this example, the provisions of a plan 
state that it applies independent professional medical and clinical 
standards consistent with generally accepted standards of care for 
setting prior authorization requirements for both medical/surgical and 
mental health and substance use disorder prescription drugs. The 
relevant generally recognized independent professional medical standard 
for treatment of opioid use disorder that the plan utilizes (the 
American Society of Addiction Medicine national practice guidelines) 
does not support prior authorization every 30 days for buprenorphine/
naloxone. However, in operation, the plan requires prior authorization 
for buprenorphine/naloxone combination at each refill (every 30 days) 
for treatment of opioid use disorder.
---------------------------------------------------------------------------

    \140\ See FAQs Part 34, Q8.
---------------------------------------------------------------------------

    In Example 6, the plan violates the no more restrictive requirement 
under 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 
146.136(c)(4)(i) of these proposed rules. The plan does not qualify for 
the proposed exception for independent professional medical or clinical 
standards, because although the provisions of the plan state that it 
applies independent professional medical and clinical standards, the 
plan deviates from the relevant standards with respect to prescription 
drugs to treat opioid use disorder. The prior authorization NQTL is 
applied to at least two-thirds of all medical/surgical benefits in the 
prescription drugs classification. The most common or frequent 
variation of this NQTL and, therefore, the predominant NQTL that 
applies to substantially all medical/surgical benefits in the 
classification is following generally recognized independent 
professional medical and clinical standards (consistent with generally 
accepted standards of care). The prior authorization requirements 
imposed on substance use disorder benefits are more restrictive than 
the predominant requirement applicable to substantially all medical/
surgical benefits in the classification, because the plan imposes 
additional requirements on substance use disorder benefits that limit 
access to the full range of treatment options available for a condition 
or disorder under the plan or coverage as compared to medical/surgical 
benefits in the same classification. Because the plan violates the no 
more restrictive requirement under the proposed rules, the example does 
not analyze compliance with the design and application requirements or 
the relevant data evaluation requirements.
    The Departments note that, if the NQTL satisfied the no more 
restrictive requirement, in compliance with proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i), the 
clarification in FAQs Part 34 would still be relevant to this example. 
In that guidance, the Departments explained that, if the plan had used 
a Pharmacy and Therapeutics (P&T) committee to decide how to cover 
prescription drugs and to evaluate whether to follow or deviate from 
nationally recognized treatment guidelines for setting prior 
authorization requirements, this approach may not have violated MHPAEA. 
Nonetheless, as explained in the FAQs, use of the P&T committee would 
need to be evaluated for compliance with MHPAEA's NQTL requirements 
(for example, by evaluating whether the P&T committee is composed of 
comparable experts for mental health conditions and substance use 
disorders, as compared to the experts for medical/surgical conditions, 
and how these experts evaluated nationally recognized treatment 
guidelines in setting prior authorization requirements for medications 
for mental health conditions, substance use disorders, and medical/
surgical conditions). Although this language on P&T committees has not 
been added to the text of this example, this guidance continues to 
apply.
    Example 7--Impermissible NQTL imposed following a final 
determination of noncompliance and direction by Secretary. New proposed 
Example 7 would illustrate the application of the provisions of these 
proposed rules at 26 CFR 54.9812-1(c)(4)(vii), 29 CFR 
2590.712(c)(4)(vii), and 45 CFR 146.136(c)(4)(vii). In this example, 
following an initial request by the Secretary for a plan's comparative 
analysis of an NQTL pursuant to proposed 26 CFR 54.9812-2(d), 29 CFR 
2590.712-1(d), and 45 CFR 146.137(d), the plan submits a comparative 
analysis for the NQTL. After review of the comparative analysis, the 
Secretary makes an initial determination that the comparative analysis 
fails to demonstrate that the processes, strategies, evidentiary 
standards, or other factors used in designing and applying the NQTL to 
mental health or substance use disorder benefits in the relevant 
classification are comparable to, and applied no more stringently than, 
those used in designing and applying the limitation with respect to 
medical/surgical benefits in the classification. Pursuant to proposed 
26 CFR 54.9812-2(d)(3), 29 CFR 2590.712-1(d)(3), and 45 CFR 
146.137(d)(3), the plan submits a corrective action plan and additional 
comparative analyses within 45 calendar days after the initial 
determination, and the Secretary then determines that the additional 
comparative analyses do not demonstrate compliance with the 
requirements of proposed 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), 
and 45 CFR 146.136(c)(4). The plan receives a final determination of 
noncompliance from the Secretary, which informs the plan that it is not 
in compliance with proposed 26 CFR 54.9812-1(c)(4), 29 CFR 
2590.712(c)(4), and 45 CFR 146.136(c)(4) and directs the plan not to 
impose the NQTL by a certain date, unless and until the plan

[[Page 51583]]

demonstrates compliance to the Secretary or takes appropriate action to 
remedy the violation. As of that date, the plan makes no changes to its 
plan terms by that date and continues to impose the NQTL.
    The proposed example would conclude that the plan violates the 
requirements of 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 
CFR 146.136(c)(4) by imposing the NQTL after the Secretary directs the 
plan not to impose the NQTL, pursuant to proposed 26 CFR 54.9812-
1(c)(4)(vii), 29 CFR 2590.712(c)(4)(vii), and 45 CFR 
146.136(c)(4)(vii).
    Example 8--Provider network admission standards not more 
restrictive and compliant with requirements for design and application 
of NQTLs. The Departments propose to amend Example 7 of the 2013 final 
regulations (and redesignate it as Example 8) to better align the 
example with the amended requirements for NQTLs set forth in these 
proposed rules. In this example, as part of a plan's standards for 
provider admission to its network in the outpatient, in-network 
classification, any provider seeking to contract with the plan must 
have supervised clinical experience. As a result of that standard, 
master's level mental health therapists are required to obtain 
supervised clinical experience beyond their licensure to participate in 
the network, while master's level medical/surgical providers, 
psychiatrists and Ph.D.-level psychologists do not require additional 
experience beyond their licensure (because their licensure already 
requires supervised clinical experience). The plan collects and 
evaluates relevant data in a manner reasonably designed to assess the 
impact of the NQTL. This includes in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges). This 
data demonstrates that participants and beneficiaries seeking 
outpatient care are able to access outpatient, in-network mental health 
and substance use disorder providers at the same frequency as 
outpatient, in-network medical/surgical providers, that mental health 
and substance use disorder providers are active in the network and are 
accepting new patients to the same extent as medical/surgical 
providers, and that mental health and substance use disorder providers 
are within similar time and distances to plan participants and 
beneficiaries as are medical/surgical providers. This data also does 
not identify material differences in what the plan or issuer pays 
psychiatrists or non-physician mental health providers, compared to 
physicians or non-physician medical/surgical providers, respectively, 
both for the same reimbursement codes and as compared to Medicare 
rates. Material differences could suggest that, in operation, NQTLs 
related to methodologies for determining reimbursement rates are being 
applied in a non-comparable or more restrictive manner for mental 
health or substance use disorder services than medical/surgical 
services, resulting in a material difference in access.
    The conclusion to Example 8 states that the plan does not violate 
26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) 
of these proposed rules. The standards for provider admission to the 
plan's network are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as they 
apply to all medical/surgical benefits in the classification. 
Additionally, the most common or frequent variation of the NQTL (the 
predominant NQTL that applies to substantially all medical/surgical 
benefits) in the classification is having a certain number of years of 
supervised clinical experience. The conclusion notes that the standards 
for provider admission to the plan's network that are imposed with 
respect to mental health or substance use disorder benefits are no more 
restrictive, as written and in operation, than the predominant 
standards for provider admission applicable to substantially all 
medical/surgical benefits in the classification, because the standards 
do not limit access to the full range of treatment options available 
for a mental health condition or substance use disorder under the plan 
or coverage as compared to medical/surgical benefits. The requirement 
that providers have a certain number of years of supervised clinical 
experience that the plan relied on to design and apply the NQTL is not 
considered to discriminate against mental health or substance use 
disorder benefits, even though this results in the requirement that 
master's level mental health therapists obtain supervised clinical 
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the 
processes, strategies, evidentiary standards, or other factors used in 
applying the NQTL to mental health or substance use disorder benefits 
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 benefits in the classification. Finally, the plan collects and 
evaluates relevant data in a manner reasonably designed to assess the 
impact of the NQTL, which does not show material differences in access 
to in-network mental health and substance use disorder benefits as 
compared to in-network medical/surgical benefits in the classification.
    Example 9--More restrictive requirement for primary caregiver 
participation applied to ABA therapy. As discussed earlier in this 
preamble, the Departments are proposing amendments clarifying in these 
proposed rules that ASD is a mental health condition under generally 
recognized independent standards of current medical practice. Thus, ASD 
is a mental health condition, and coverage for treatment for ASD is a 
mental health benefit as defined in 26 CFR 54.9812-1(a), 29 CFR 
2590.712(a), and 45 CFR 146.136(a) of the 2013 final regulations and 26 
CFR 54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2) of 
these proposed rules. In new proposed Examples 9 and 10, the 
Departments would illustrate the application of MHPAEA to ASD 
treatment, consistent with ASD being classified as a mental health 
condition. In proposed new Example 9, a plan generally applies medical 
necessity criteria in adjudicating claims for coverage of all 
outpatient, in-network medical/surgical and mental health and substance 
use disorder benefits, including ABA therapy for the treatment of ASD. 
The medical necessity criteria for coverage of ABA therapy requires 
evidence that the participant's or beneficiary's primary caregivers 
actively participate in ABA therapy, as documented by consistent 
attendance in parent, caregiver, or guardian training sessions. In 
adding this requirement, the plan deviates from independent 
professional medical or clinical standards, and there are no similar 
medical necessity criteria requiring evidence of primary caregiver 
participation to receive coverage for any medical/surgical benefits.
    Proposed Example 9 would violate the no more restrictive 
requirement of these proposed rules. The conclusion notes that the plan 
applies medical necessity criteria to at least two-thirds of all 
outpatient, in-network medical/surgical benefits, as they apply to all 
medical/surgical benefits in the classification. The most common or

[[Page 51584]]

frequent variation of this NQTL (the predominant NQTL) that applies to 
substantially all medical/surgical benefits in the classification does 
not include the requirement to provide evidence that the participant's 
or beneficiary's primary caregivers actively participate in the 
treatment. The plan does not qualify for the exception in 26 CFR 
54.9812-1(c)(4)(i)(E), 29 CFR 2590.712(c)(4)(i)(E), and 45 CFR 
146.136(c)(4)(i)(E) of these proposed rules in applying its restriction 
on coverage for ABA therapy because the plan deviates from the 
independent professional medical or clinical standards by imposing a 
different requirement that does not comport with independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care). The proposed new example would conclude 
that the plan's treatment of ABA therapy and the imposition of the 
additional requirement to provide evidence that primary caregivers 
actively participate in treatment violates proposed 26 CFR 54.9812-
1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i) 
because the NQTL imposed on mental health and substance use disorder 
benefits in the example is more restrictive than the predominant 
medical necessity requirement imposed on substantially all medical/
surgical benefits (which does not include the requirement to provide 
evidence that primary caregivers actively participate in treatment). 
Because the plan violates the no more restrictive requirement, the 
example does not analyze compliance with the design and application 
requirements or the relevant data evaluation requirements of these 
proposed rules.
    Example 10--More restrictive exclusion for experimental or 
investigative treatment applied to ABA therapy. Proposed new Example 10 
would incorporate guidance issued as part of FAQs Part 39.\141\ In this 
example, a plan, as written, generally excludes coverage for all 
treatments that are experimental or investigative for medical 
conditions and surgical procedures, mental health conditions, and 
substance use disorders in the outpatient, in-network classification. 
As a result, the plan generally excludes experimental treatment of 
medical conditions and surgical procedures, mental health conditions, 
and substance use disorders when no professionally recognized treatment 
guidelines define clinically appropriate standards of care for the 
condition or disorder, and fewer than two randomized controlled trials 
are available to support the treatment's use with respect to the given 
condition or disorder. The plan provides benefits for the treatment of 
ASD, which is a mental health condition, but in operation, the plan 
excludes coverage for ABA therapy to treat children with ASD, deeming 
it experimental. More than one professionally recognized treatment 
guideline defines clinically appropriate standards of care for ASD and 
more than two randomized controlled trials are available to support the 
use of ABA therapy to treat certain children with ASD.
---------------------------------------------------------------------------

    \141\ See FAQs Part 39, Q1.
---------------------------------------------------------------------------

    In this proposed new example, the coverage exclusion for 
experimental or investigative treatment applies to at least two-thirds 
of all medical/surgical benefits, as it applies to all outpatient 
medical/surgical benefits in the outpatient, in-network classification. 
The most common or frequent variation of this NQTL and, therefore, the 
predominant NQTL applicable to substantially all medical/surgical 
benefits is the exclusion under the plan for coverage of experimental 
treatment of medical conditions and surgical procedures when no 
professionally recognized treatment guidelines define clinically 
appropriate standards of care for the condition or disorder and fewer 
than two randomized controlled trials are available to support the 
treatment's use with respect to the given condition or procedure. In 
operation, the exclusion for experimental or investigative treatment 
imposed on ABA therapy is more restrictive than the predominant 
variation of the NQTL for experimental or investigative treatment 
imposed on substantially all medical/surgical benefits in the 
classification because the exclusion limits access to the full range of 
treatment options available for a mental health condition under the 
plan as compared to medical/surgical benefits. This is the case, 
despite the fact that the requisite number of professionally recognized 
treatment guidelines and randomized controlled trials support its use 
to treat certain children with ASD. Therefore, the plan's application 
of the experimental exclusion to ABA therapy violates the no more 
restrictive requirement in 26 CFR 54.9812-1(c)(4)(i), 29 CFR 
2590.712(c)(4)(i), and 45 CFR 146.136(c)(4)(i), and the example does 
not analyze compliance with the design and application requirements or 
the relevant data evaluation requirements under these proposed rules.
    Example 11--Separate EAP exhaustion treatment limitation applicable 
only to mental health benefits. The Departments also propose to amend 
Example 6 of the 2013 final regulations and redesignate it as Example 
11. In this example, the employer maintains both a major medical plan 
and an employee assistance plan (EAP). The EAP provides, among other 
benefits, a limited number of mental health or substance use disorder 
counseling sessions, which, together with other benefits provided by 
the EAP, are not significant benefits in the nature of medical care. 
Participants are eligible for mental health and substance use disorder 
benefits under the employer's major medical coverage only after 
exhausting the counseling sessions provided by the EAP. No similar 
exhaustion requirement applies with respect to medical/surgical 
benefits provided under the major medical plan.
    In this example, limiting eligibility for mental health and 
substance use disorder benefits under the major medical plan until EAP 
benefits are exhausted is an NQTL subject to MHPAEA and violates these 
proposed rules. Because the limitation does not apply to medical/
surgical benefits, it is a separate NQTL applicable only to mental 
health and substance use disorder benefits, which violates 26 CFR 
54.9812-1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 
146.136(c)(4)(vi) of these proposed rules. The Departments also note 
that this EAP would generally not qualify as excepted benefits as set 
forth in the final excepted benefits rules (published after the 2013 
final regulations).\142\ Under those rules, the benefits provided under 
an EAP are excepted if the EAP does not provide significant benefits in 
the nature of medical care, the benefits under the EAP are not 
coordinated with benefits under another group health plan, no employee 
premiums or contributions are required as a condition of participation 
in the EAP, and there is no cost sharing under the EAP. In this 
example, the benefits under the EAP are coordinated with the benefits 
of another group health plan, since participants in the major medical 
group health plan are required to use and exhaust benefits under the 
EAP (making the EAP a gatekeeper) before an individual is eligible for 
benefits under the major medical plan.
---------------------------------------------------------------------------

    \142\ 26 CFR 54.9831-1(c)(3)(vi)(B)(1), 29 CFR 
2590.732(c)(3)(vi)(B)(1), and 45 CFR 146.145(b)(3)(vi)(B)(1); 79 FR 
59130 (Oct. 1, 2014).
---------------------------------------------------------------------------

    Example 12--Separate residential exclusion treatment limitation 
applicable only to mental health benefits. Proposed new Example 12 
would demonstrate that MHPAEA

[[Page 51585]]

specifically prohibits separate treatment limitations that are 
applicable only with respect to mental health or substance use disorder 
benefits. In this example, a plan generally covers inpatient, in-
network and inpatient, out-of-network treatment in any setting, 
including skilled nursing facilities and rehabilitation hospitals, 
provided other medical necessity standards are satisfied. The plan also 
has an exclusion for residential treatment, which the plan defines as 
an inpatient benefit, for mental health and substance use disorder 
benefits. This exclusion was not generated through any broader NQTL 
(such as medical necessity or other clinical guideline). The proposed 
new example would conclude that the plan violates 26 CFR 54.9812-
1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi) of 
these proposed rules. Because the plan does not apply a comparable 
exclusion to inpatient benefits for medical/surgical conditions, the 
exclusion of residential treatment is a separate NQTL applicable only 
to mental health and substance use disorder benefits in the inpatient, 
in-network and inpatient, out-of-network classifications that does not 
apply with respect to any medical/surgical benefits in the same benefit 
classifications.
    Example 13--Standards for provider admission to a network. Finally, 
proposed new Example 13 would illustrate how plans and issuers may 
comply with these proposed rules with regard to parity, including the 
requirement to collect and evaluate data, with respect to standards 
related to network composition, including standards for provider and 
facility admission to participate in a network or for continued network 
participation, methods for determining reimbursement rates, 
credentialing standards, and procedures for ensuring the network 
includes an adequate number of each category of providers and 
facilities to provide covered services under the plan or coverage. As 
highlighted above, the proper design, administration, and composition 
of networks are essential to participants and beneficiaries having 
access to treatment for mental health conditions and substance use 
disorders in parity with access to treatment for medical conditions and 
surgical procedures, and this proposed example illustrates the steps 
that plans and issuers may take to improve such access.
    In this proposed new example, a plan applies NQTLs related to 
network composition in the outpatient, in-network and inpatient, in-
network classifications. The plan's networks are constructed by 
separate service providers for medical/surgical benefits and mental 
health and substance use disorder benefits. The facts of the example 
stipulate that the plan's NQTLs related to network composition for 
mental health and substance use disorder benefits satisfy the no more 
restrictive requirement and the design and application requirements in 
the outpatient, in-network and inpatient, in-network classifications. 
It further stipulates that the plan collects and evaluates all relevant 
data in a manner reasonably designed to assess the impact of the NQTLs 
related to network composition on access to mental health and substance 
use disorder benefits as compared with medical and surgical benefits 
and considers the impact as part of the plan's analysis of whether the 
NQTLs, in operation, comply with the no more restrictive requirement 
and the design and application requirements of these proposed rules.
    The plan determined that the data did not reveal any material 
differences in access. That data included metrics relating to the time 
and distance from plan participants and beneficiaries to network 
providers in rural and urban regions; the number of network providers 
accepting new patients; the proportions of mental health and substance 
use disorder and medical/surgical providers and facilities that provide 
services in rural and urban regions who are in the plan's network; 
provider reimbursement rates; in-network and out-of-network utilization 
rates (including data related to the dollar value and number of 
provider claims submissions); and survey data from participants on the 
extent to which they forgo or pay out-of-pocket for treatment because 
of challenges finding in-network providers. The efforts the plan made 
when designing and applying its NQTLs related to network composition, 
which ultimately led to its outcomes data not revealing any material 
differences in access to benefits for mental health or substance use 
disorders as compared with medical/surgical benefits, included making 
sure that the plan's service providers are making special efforts to 
enroll available providers, including by authorizing greater 
compensation or other inducements to the extent necessary, and 
expanding telehealth arrangements as appropriate to manage regional 
shortages. The plan also notifies participants in clear and prominent 
language on its website, employee brochures, and the summary plan 
description of a toll-free number available to help participants find 
in-network providers. In addition, when plan participants submit bills 
for out-of-network items and services, the plan directs their service 
providers to reach out to the treating providers and facilities to see 
if they will enroll in the network.
    The proposed new example would conclude that the plan does not 
violate 26 CFR 54.9812-1(c)(4), 29 CFR 2590.712(c)(4), or 45 CFR 
146.136(c)(4). The plan's NQTLs related to network composition comply 
with the no more restrictive requirement, the design and application 
requirements, and the relevant data evaluation requirements and the 
data does not reveal any material differences in access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits, as a result of the actions the plan took (as set 
forth in the facts) when initially designing its NQTLs related to 
network composition
    Because the plan takes comparable actions to ensure that its mental 
health and substance use disorder provider network is as accessible as 
its medical/surgical provider network and exercises careful oversight 
over its service providers and the comparative robustness of the 
networks with an eye to ensuring that network composition results in 
access to in-network benefits for mental health and substance use 
disorder services,, plan participants and beneficiaries can access 
covered mental health and substance use disorder services and benefits 
as readily as medical/surgical benefits. This is reflected in the 
plan's carefully designed metrics and assessment of network 
composition. The Departments recognize, however, that there are 
significant challenges to building networks of mental health and 
substance use disorder providers that result in parity. If, despite 
taking such comprehensive action in accordance with the requirements of 
proposed 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 2590.712(c)(4)(iv)(C), 
and 45 CFR 146.136(c)(4)(iv)(C), a plan's or issuer's participants, or 
beneficiaries still experience materially greater reliance on out-of-
network, rather than in-network, mental health or substance use 
disorder benefits because of provider shortages that the plan or issuer 
cannot effectively address through no fault of its own, the Departments 
would not treat the plan or issuer as in violation of 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4), provided that 
the plan or issuer is otherwise in compliance with the requirements of 
these sections.
    The Departments solicit comments on these proposed amended and 
added examples, including with respect to

[[Page 51586]]

how these proposed examples illustrate the application of the 
provisions of these proposed rules related to NQTLs. The Departments 
also solicit comments on any additional examples that might be helpful 
to interested parties with respect to any specific provision of these 
proposed rules applicable to NQTLs or any specific NQTLs that apply to 
mental health and substance use disorder benefits.
4. Prohibition on Financial Requirements and Treatment Limitations
Applicable Only to Mental Health or Substance Use Disorder Benefits--26 
CFR 54.9812-1(c)(2)(i) and (c)(4)(vi), 29 CFR 2590.712(c)(2)(i) and 
(c)(4)(vi), and 45 CFR 146.136(c)(2)(i) and (c)(4)(vi)
    The Departments propose to amend the general parity requirement set 
forth in 26 CFR 54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 
CFR 146.136(c)(2)(i) by adding a sentence to reiterate that a plan or 
issuer may not impose any financial requirement or treatment limitation 
that is applicable only with respect to mental health or substance use 
disorder benefits and not to any medical/surgical benefits in the same 
benefit classification. The general parity requirement set forth in 
paragraph (c)(2)(i) provides that a plan or issuer that provides both 
medical/surgical benefits and mental health or substance use disorder 
benefits may not apply any financial requirement or treatment 
limitation to mental health or substance use disorder benefits in any 
classification that is more restrictive than the predominant financial 
requirement or treatment limitation of that type applied to 
substantially all medical/surgical benefits in the same classification. 
The general parity requirement also states that the application of 
paragraph (c)(2) to financial requirements and quantitative treatment 
limitations is addressed in paragraph (c)(3) of the regulations; the 
application of paragraph (c)(2) to NQTLs is addressed in paragraph 
(c)(4) of the regulations.
    Code section 9812(a)(3)(A)(i), ERISA section 712(a)(3)(A)(i), and 
PHS Act section 2726(a)(3)(A)(i) specifically prohibit separate cost 
sharing requirements that are applicable only with respect to mental 
health or substance use disorder benefits, and Code section 
9812(a)(3)(A)(ii), ERISA section 712(a)(3)(A)(ii), and PHS Act section 
2726(a)(3)(A)(ii) specifically prohibit separate treatment limitations 
that are applicable only with respect to mental health or substance use 
disorder benefits. While the text of the 2013 final regulations does 
not explicitly incorporate these statutory prohibitions, financial 
requirements and quantitative treatment limitations that are imposed 
only with respect to mental health or substance use disorders could not 
meet the substantially all or predominant standards in the parity 
requirements contained in paragraph (c)(3) of 26 CFR 54.9812-1, 29 CFR 
2590.712, and 45 CFR 146.136, as adopted in the 2013 final regulations. 
Moreover, an example in the 2013 final regulations demonstrates and 
affirms that an NQTL applied only to mental health or substance use 
disorder benefits would not be permissible.\143\ These proposed 
amendments to the general parity requirement set forth in 26 CFR 
54.9812-1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 
146.136(c)(2)(i) would directly incorporate the statutory prohibitions 
by expressly stating that plans and issuers are not permitted to impose 
any kind of financial requirement or treatment limitation that applies 
only to mental health or substance use disorder benefits and not to 
medical/surgical benefits in the same classification.
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    \143\ See 26 CFR 54.9812-1(c)(4)(iii) Ex. 6, 29 CFR 
2590.712(c)(4)(iii) Ex. 6, and 45 CFR 146.136(c)(4)(iii) Ex. 6. The 
Departments are proposing to renumber this example, and to add a 
clarification on interaction with the Departments' group market 
excepted benefit rules, but otherwise propose to leave this example 
unamended.
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    Because the general parity requirement set forth in 26 CFR 54.9812-
1(c)(2)(i), 29 CFR 2590.712(c)(2)(i), and 45 CFR 146.136(c)(2)(i) of 
the 2013 final regulations also states that the application of 
paragraph (c)(2) to NQTLs is addressed in paragraph (c)(4) of the 
regulations, the Departments also propose to add similar language to 
these proposed rules for NQTLs at 26 CFR 54.9812-1(c)(4)(vi), 29 CFR 
2590.712(c)(4)(vi), and 45 CFR 146.136(c)(4)(vi), which cross-
references the language proposed to be added to paragraph (c)(2)(i). 
This proposed language would state that a plan or issuer may not apply 
any NQTL that is applicable only with respect to mental health or 
substance use disorder benefits and not with respect to any medical/
surgical benefits in the same benefit classification. For this purpose, 
an exclusion of benefits for a mental health condition or substance use 
disorder in a classification that is merely an expression of another 
NQTL, such as medical necessity requirements or experimental or 
investigational exclusions, that is applied with respect to medical/
surgical benefits in the same classification would not be considered a 
separately applicable treatment limitation. For example, a plan's 
exclusion of coverage for ABA therapy is not an expression of a broader 
NQTL if it was not generated through a process or strategy, or informed 
by an evidentiary standard of, a broader NQTL like medical necessity. 
As a result, such an NQTL would be evaluated under 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) to determine 
whether such NQTL is permitted.
    The Departments solicit comments on this proposal.
5. Other Proposed Amendments
    The Departments propose to amend 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 
2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii) to specify that if a 
plan or issuer provides any benefits for a mental health condition or 
substance use disorder in any classification of benefits, benefits for 
that mental health condition or substance use disorder must be provided 
in every classification in which medical/surgical benefits are 
provided. For this purpose, if a plan or issuer provides any benefits 
for a mental health condition or substance use disorder in any 
classification of benefits, the plan or issuer would not be considered 
to provide benefits for the mental health condition or substance use 
disorder in every classification in which medical/surgical benefits are 
provided unless the plan or issuer provides meaningful benefits for 
treatment for that condition or disorder in each classification, as 
determined in comparison to the benefits provided for medical/surgical 
conditions in such classification. This requirement would ensure that, 
when plans and issuers cover benefits for a range of services or 
treatments for medical/surgical conditions in a classification, plans 
and issuers cannot provide, for example, only one limited benefit for a 
mental health condition or substance use disorder in that 
classification. The Departments request comments on this proposal, 
including whether and how to define ``meaningful benefits'' for 
purposes of this provision as well as other potential alternatives. For 
example, the Departments request comments on whether it would be more 
practical to require plans and issuers to provide ``substantial 
coverage'' of mental health and substance use disorder benefits or 
benefits for the ``primary or most common or frequent types of 
treatment for a covered condition or disorder'' in each classification 
in which medical/surgical benefits are provided, and if so, how to 
define and make comparisons about

[[Page 51587]]

what constitutes ``substantial coverage'' or the ``primary or most 
common or frequent types of treatment'' for medical/surgical and mental 
health or substance use disorder benefits.
    The preamble of the 2013 final regulations addressed an issue 
characterized as ``scope of services'' or ``continuum of care.'' \144\ 
Scope of services generally refers to the types of treatments and 
treatment settings that are covered by a group health plan or health 
insurance coverage. The preamble to the 2013 final regulations 
explained that plans and issuers must assign mental health and 
substance use disorder benefits and medical/surgical benefits to the 
six classifications of benefits in a consistent manner, and explained 
that this rule also generally applies to benefits for intermediate 
levels of care provided under the plan or coverage.\145\ The 2013 
regulations further explained that plan or coverage exclusions 
affecting the scope of services provided under the plan or coverage, 
such as restrictions based on geographic location, facility type, and 
provider specialty, among others, must comply with the NQTL parity 
standard. The Departments recognize that the proposal to require 
meaningful benefits for mental health and substance use disorder 
services in a classification is related to scope of services and 
request comments on whether additional guidance is needed regarding how 
this proposed requirement would interact with the approach related to 
scope of services adopted under the 2013 final regulations.
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    \144\ 78 FR 68240, 68246-7 (Nov. 13, 2013).
    \145\ The preamble to the 2013 final regulations stated, ``For 
example, if a plan or issuer classifies care in skilled nursing 
facilities or rehabilitation hospitals as inpatient benefits, then 
the plan or issuer must likewise treat any covered care in 
residential treatment facilities for mental health or substance user 
disorders as an inpatient benefit. In addition, if a plan or issuer 
treats home health care as an outpatient benefit, then any covered 
intensive outpatient mental health or substance use disorder 
services and partial hospitalization must be considered outpatient 
benefits as well.'' 78 FR 68240, 68247 (Nov. 13, 2013).
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    As mentioned above, the proposed amendments to 26 CFR 54.9812-
1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii) 
would also state that, if a plan provides any benefits for a mental 
health condition or substance use disorder, benefits would be required 
to be provided for that condition or disorder in each classification 
for which any medical/surgical benefits are provided. This proposed 
language would make explicit in the regulations the Departments' 
interpretation that the requirement to provide coverage in each 
classification in which medical/surgical benefits are provided applies 
on a condition or disorder basis, an interpretation that the 
Departments have held since the interim final rules.\146\ The 
Departments solicit comments on these provisions of these proposed 
rules on classifications of benefits, including whether additional 
flexibility is needed to account for benefits that are difficult to 
place into classifications under the current structure, and whether 
additional guardrails or protections should be required.
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    \146\ 75 FR 5410, 5413 (Feb. 2, 2010).
---------------------------------------------------------------------------

    The Departments propose to add two additional examples to 26 CFR 
54.9812-1(c)(2)(ii)(C), 29 CFR 2590.712(c)(2)(ii)(C), and 45 CFR 
146.136(c)(2)(ii)(C) to illustrate the application of these proposed 
amendments to the rules. Proposed Example 5 would involve a plan that 
generally covers treatment for 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 
ABA therapy, when provided on an out-of-network basis. Based on 
independent standards of current medical practice, ABA therapy is one 
of the primary treatments for ASD in children. In this proposed 
example, the plan generally covers the full range of outpatient 
treatments and treatment settings for medical conditions and surgical 
procedures when provided on an out-of-network basis. This proposed 
example provides that the plan would violate the proposed rules in 26 
CFR 54.9812-1(c)(2)(ii), 29 CFR 2590.712(c)(2)(ii), and 45 CFR 
146.136(c)(2)(ii) because it fails to provide meaningful benefits for 
treatment of ASD in the outpatient, out-of-network classification, as 
determined in comparison to the benefits provided for medical/surgical 
conditions in the classification.
    Under proposed Example 6, 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. In this proposed example, 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 medical/surgical conditions in the classification. Therefore, the 
plan violates the proposed rules in 26 CFR 54.9812-1(c)(2)(ii), 29 CFR 
2590.712(c)(2)(ii), and 45 CFR 146.136(c)(2)(ii). The Departments note 
that, if the plan covers medical/surgical benefits for nutritional 
counseling, this plan would also violate the proposed rules in 26 CFR 
54.9812-1(c)(4)(vi), 29 CFR 2590.712(c)(4)(vi), and 45 CFR 146.136 
(c)(4)(vi) prohibiting separate NQTLs applicable only to mental health 
or substance use disorder benefits.
    The 2013 final regulations set forth the only classifications of 
benefits that may be used in applying the parity rules for financial 
requirements and treatment limitations, and listed specific instances 
when a plan or issuer may divide benefits into sub-classifications 
beyond the six classifications permitted in paragraph (c)(2)(ii)(A) of 
the 2013 final regulations. Specifically, a plan (or health insurance 
coverage) may apply different levels of financial requirements to 
different tiers of prescription drug benefits based on reasonable 
factors determined in accordance with the rules in 26 CFR 54.9812-
1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) and without 
regard to whether a drug is generally prescribed with respect to 
medical/surgical benefits or with respect to mental health or substance 
use disorder benefits. Additionally, if a plan or issuer provides 
benefits through multiple tiers of in-network providers (such as an in-
network tier of other preferred providers with more generous cost-
sharing than a separate in-network tier of participating providers), 
the plan may divide its benefits furnished on an in-network basis into 
sub-classifications that reflect network tiers, if the tiering is based 
on reasonable factors determined in accordance with the rules in 26 CFR 
54.9812-1(c)(4), 29 CFR 2590.712(c)(4), and 45 CFR 146.136(c)(4) (such 
as quality, performance, and market standards) and without regard to 
whether a provider provides services with respect to medical/surgical 
benefits or mental health or substance use disorder benefits.\147\ A 
plan or issuer is also permitted to divide its benefits furnished on an 
outpatient basis into two sub-classifications: (1) office visits (such 
as physician visits), and (2) all other outpatient items and services 
(such as outpatient surgery, facility charges for day treatment 
centers,

[[Page 51588]]

laboratory charges, or other medical items).\148\ These proposed rules 
at 26 CFR 54.9812-1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45 
CFR 146.136(c)(2)(ii)(A) would clarify that plans and issuers may use 
the permissible sub-classifications under the 2013 final regulations 
when applying all of the rules for financial requirements and treatment 
limitations, including NQTLs.
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    \147\ 26 CFR 54.9812-1(c)(3)(iii)(B), 29 CFR 
2590.712(c)(3)(iii)(B), and 45 CFR 146.136(c)(3)(iii)(B).
    \148\ 26 CFR 54.9812-1(c)(3)(iii)(C), 29 CFR 
2590.712(c)(3)(iii)(C), and 45 CFR 146.136(c)(3)(iii)(C).
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    After any of these permissible sub-classifications are established, 
a plan or issuer may not impose any financial requirement or 
quantitative treatment limitation on mental health or substance use 
disorder benefits in any sub-classification that is more restrictive 
than the predominant financial requirement or quantitative treatment 
limitation that applies to substantially all medical/surgical benefits 
in the sub-classification. These proposed rules would clarify at 26 CFR 
54.9812-1(c)(3)(iii), 29 CFR 2590.712(c)(3)(iii), and 45 CFR 
146.136(c)(3)(iii) that plans and issuers are not permitted to divide 
benefits into any sub-classifications other than those specifically 
permitted under this paragraph. While this proposed amendment would not 
make any substantive changes to the existing rule, the Departments are 
proposing to make these regulatory amendments to further reiterate that 
plans and issuers are not permitted to sub-divide the classifications 
other than as described in paragraph (c)(3)(iii).
    The Departments have received questions and requests for guidance 
on how to comply with MHPAEA's requirements with respect to telehealth 
benefits. Specifically, some of these questions have asked where 
telehealth fits into the existing classifications and sub-
classifications of benefits, and whether changes to the Departments' 
framework and existing regulations implementing MHPAEA are necessary to 
account for telehealth benefits. The Departments are not proposing to 
make any changes to the classifications and sub-classifications other 
than the proposed amendments described in the prior paragraph. The 
Departments expect plans and issuers to treat telehealth benefits the 
same way they treat those benefits when provided in person in 
determining the classification or sub-classification in which a 
particular benefit belongs and in ensuring compliance with the 
requirements of MHPAEA, as required under the 2013 final rules. The 
Departments request comment on issues related to telehealth later in 
this preamble.
    Treasury and DOL also propose to amend 26 CFR 54.9812-1(d)(3) and 
29 CFR 2590.712(d)(3) by adding cross-references to proposed 26 CFR 
54.9812-2 and 29 CFR 2590.712-1. This amendment would clarify the 
comparative analyses and any other applicable information required 
under the CAA, 2021 are considered to be instruments under which a plan 
is established or operated, and therefore, ERISA plans generally must 
furnish those documents to plan participants and beneficiaries upon 
request within 30 days, as required under section 104 of ERISA and 29 
CFR 2520.104b-1. Additionally, the Departments propose to amend 26 CFR 
54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 146.136(d)(3) to 
clarify that the comparative analyses and any other applicable 
information required under the CAA, 2021 and these proposed rules 
qualify as documents, records, and other information relevant to the 
claimant's claim for benefits to which plans and issuers must provide 
reasonable access, upon request and free of charge. This clarification 
is consistent with new proposed 26 CFR 54.9812-2(e)(2), 29 CFR 
2590.712-1(e)(2), and 45 CFR 146.137(e)(2), discussed later in this 
preamble, which generally would require plans and issuers to make 
available the comparative analyses required to be performed and 
documented under the CAA, 2021 when requested by participants and 
beneficiaries in ERISA plans, including by a provider or other person 
acting as a participant's or beneficiary's authorized representative. 
These comparative analyses are instruments under which the plan is 
established and operated, and participants and beneficiaries should be 
able to request this information in order to ensure they are informed 
about their health plans or group health insurance coverage. 
Additionally, these comparative analyses would be relevant to a 
claimant's claim for benefits and should therefore be available to 
participants or beneficiaries, and providers or other individuals 
acting as a participant's or beneficiary's authorized representative.
    Finally, the Departments propose to amend 26 CFR 54.9812-1(e)(4), 
29 CFR 2590.712(e)(4), and 45 CFR 146.136(e)(4) to include a reference 
to 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), and 45 CFR 146.137(g) and 
to reflect current HHS regulations at 45 CFR 156.115(a)(3). Existing 
regulations at 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45 
CFR 146.136(e)(4) state that nothing in paragraphs (f) and (g) of the 
2013 final regulations related to MHPAEA's small employer exemption and 
increased cost exemption, respectively, changes the requirement under 
HHS regulations at 45 CFR 147.150 and 156.115, providing that a health 
insurance issuer offering non-grandfathered health insurance coverage 
in the individual or small group market providing mental health and 
substance use disorder services, including behavioral health treatment 
services, must comply with the provisions of 45 CFR 146.136 to satisfy 
the requirement to provide essential health benefits (EHBs). HHS has 
updated 45 CFR 156.115(a)(3) to state that provision of essential 
health benefits means that a health plan provides benefits that 
``[w]ith respect to the mental health and substance use disorder 
services, including behavioral health treatment services, required 
under Sec.  156.110(a)(5), comply with the requirements under section 
2726 of the Public Health Service Act and its implementing 
regulations.'' \149\ Therefore, to be consistent with the language 
contained in 45 CFR 156.115(a)(3), and to ensure that the cross-
reference between the Departments' MHPAEA implementing regulations and 
HHS' EHB implementing regulations includes the requirement to comply 
with the provisions on comparative analyses, the Departments propose to 
amend 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 45 CFR 
146.136(e)(4) to state that nothing in paragraph (f) or (g) of those 
sections, or in proposed 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), or 
45 CFR 146.136-1(g), would change the requirements of 45 CFR 147.150 
and 156.115, providing that a health insurance issuer offering non-
grandfathered health insurance coverage in the individual or small 
group market providing mental health and substance use disorder 
services, including behavioral health treatment services, as part of 
essential health benefits required under 45 CFR 156.110(a)(5) and 
156.115(a), must comply with the requirements under section 2726 of the 
PHS Act and its implementing regulations to satisfy the requirement to 
provide coverage for mental health and substance use disorder services,

[[Page 51589]]

including behavioral health treatment, as part of essential health 
benefits.
---------------------------------------------------------------------------

    \149\ Patient Protection and Affordable Care Act; Updating 
Payment Parameters, Section 1332 Waiver Implementing Regulations, 
and Improving Health Insurance Markets for 2022 and Beyond, 86 FR 
53412 (September 27, 2021), available at https://www.federalregister.gov/documents/2021/09/27/2021-20509/patient-protection-and-affordable-care-act-updating-payment-parameters-section-1332-waiver.
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    The Departments solicit comments on these proposals. Additionally, 
the Departments request comments on whether there are any other steps 
the Departments can take to promote compliance with these proposed 
rules or other provisions of MHPAEA, and what other guidance or 
technical support from the Departments would be helpful to ensuring 
compliance with MHPAEA.

B. New Regulations at 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 
146.137

    As explained earlier in this preamble, the CAA, 2021 amended 
MHPAEA, in part, to expressly require plans and issuers that offer both 
medical/surgical benefits and mental health or substance use disorder 
benefits and impose NQTLs on mental health or substance use disorder 
benefits to perform and document their comparative analyses of the 
design and application of NQTLs, and make their comparative analyses 
available to the Departments or applicable State authorities upon 
request.\150\ On April 2, 2021, the Departments issued FAQs Part 45 to 
provide guidance on the amendments to MHPAEA made by the CAA, 2021, 
including the NQTL comparative analyses requirements. Since the 
issuance of this guidance, interested parties have requested additional 
guidance and clarifications on the NQTL comparative analysis 
requirements. In addition to the proposed amendments to existing 
provisions of the MHPAEA regulations outlined earlier in this preamble, 
these proposed rules would, using the definitions indicated in 26 CFR 
54.9812-1(a)(2), 29 CFR 2590.712(a)(2), and 45 CFR 146.136(a)(2), 
codify in regulations the requirement that a plan or issuer that 
imposes any NQTL on mental health or substance use disorder benefits 
must perform and document comparative analyses of the design and 
application of all NQTLs, consistent with Code section 9812(a)(8)(A), 
ERISA section 712(a)(8)(A), and PHS Act section 2726(a)(8)(A). The new 
proposed rules also set forth the content requirements for NQTL 
comparative analyses, including the proposed requirement that plans and 
issuers include and evaluate relevant data as part of their comparative 
analyses to ensure compliance with MHPAEA.
---------------------------------------------------------------------------

    \150\ Code section 9812(a)(8)(A), ERISA section 712(a)(8)(A), 
and PHS Act section 2726(a)(8)(A).
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    The Departments are proposing these content requirements in 
response to requests from interested parties for more details on how 
plans and issuers should perform and document comparative analyses and 
based on lessons learned by the Departments from conducting NQTL 
comparative analysis reviews since the effective date of the 
comparative analysis requirement. The proposed additional content 
requirements are designed to ensure that the comparative analyses focus 
on the statutory standards and promote parity. The proposal includes 
specific information and data that plans and issuers would be required 
to incorporate in each comparative analysis with respect to an NQTL, 
and the factors and evidentiary standards used to design or apply the 
NQTL; how plans and issuers would be required to demonstrate in their 
analysis that, under the terms of their plan or coverage, as written 
and in operation, any processes, strategies, evidentiary standards, or 
other factors used in designing and applying the NQTL to mental health 
or substance use disorder benefits are comparable to, and are applied 
no more stringently than those used with respect to medical/surgical 
benefits; and what findings and conclusions would be required to be 
addressed. These proposed rules would also set forth details with 
respect to when and how plans and issuers would be required to make 
those comparative analyses available upon request to the Departments or 
the applicable State authority, and propose when and how plans and 
issuers would be required to make comparative analyses available upon 
request to a participant, beneficiary, or their authorized 
representative, including the timeframes and procedures for plans and 
issuers to provide additional information to the requesting Department 
or an applicable State authority, provide a corrective action 
plan,\151\ and notify participants and beneficiaries of a final 
determination of noncompliance. For purposes of this proposed 
provision, the term ``applicable State authority'' has the same meaning 
as under PHS Act section 2791(d)(I) and 45 CFR 144.103, which is, with 
respect to a health insurance issuer in a State, the State insurance 
commissioner or official or officials designated by the State to 
enforce the requirements title of title XXVII of the PHS Act for the 
State involved with respect to the issuer.
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    \151\ The contents of a corrective action plan will vary from 
one case to another, but such corrective action plans will generally 
be required to contain certain basic elements including: (1) 
identification of the noncompliant NQTL at issue, (2) proposed 
approaches to address this noncompliance, including strategies to 
provide relief to beneficiaries and participants who were adversely 
affected, (3) a timeline for implementation, (4) potential 
constraints or sources of delay that could adversely affect timely 
implementation, (5) points of contact for corrective action plan 
implementation, and (6) any other components deemed necessary by the 
Departments. When a plan or issuer submits a corrective action plan 
to the Departments, the plan shall be reviewed for completeness and 
sufficiency.
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    The Departments request comments on all aspects of these proposed 
rules contained in 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 
146.137, including what additional clarifications would help plans and 
issuers perform and document sufficient comparative analyses and submit 
those analyses to the Secretary or applicable State authority upon 
request. In addition, the Departments are interested in feedback 
related to the challenges plans and issuers face obtaining the 
necessary information to perform and document a sufficient comparative 
analysis. The requirement to perform and document comparative analyses 
under Code section 9812(a)(8), ERISA section 712(a)(8), and PHS Act 
section 2726(a)(8) is generally applicable to group health plans and 
issuers offering group or individual health insurance coverage. The 
Departments are aware that plans and issuers contract with managed 
behavioral health organizations (MBHOs), third-party administrators 
(TPAs), or other service providers to provide or administer mental 
health or substance use disorder benefits.\152\ The preamble to the 
2013 final regulations notes that the fact that an employer or issuer 
contracts with one or more entities to provide or administer mental 
health or substance use disorder benefits or other benefits does not 
relieve the employer, issuer, or both of their obligations under 
MHPAEA.\153\ Plans and issuers should have clear protocols and 
processes in place to ensure that the MBHOs and other TPAs for both 
medical/surgical and mental health and substance use disorder benefits 
provide sufficient information regarding plan structure and benefits to 
each other and the plans and issuers that they serve to ensure that the 
mental health and substance use disorder benefits are coordinated with 
the medical/surgical benefits for purposes of compliance with 
MHPAEA.\154\
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    \152\ 78 FR 68239, 68250 (Nov. 13, 2013).
    \153\ Ibid.
    \154\ 2020 MHPAEA Self-Compliance Tool, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/self-compliance-tool.pdf.
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    The Departments understand that, in practice, plan sponsors often 
rely on the issuer of fully-insured plans, TPAs of self-insured plans, 
and other service providers to administer their benefits, including 
designing and implementing

[[Page 51590]]

the limitations and coverage terms that are subject to MHPAEA 
requirements and providing them with comparative analyses (or detailed 
information to inform the development of comparative analyses) for the 
NQTLs that the issuers, TPAs, and service providers themselves design 
and apply to mental health and substance use disorder benefits and 
medical/surgical benefits under the terms of the plan or coverage. 
While the States and HHS have enforcement authority over issuers 
providing health insurance coverage with respect to fully-insured 
plans,\155\ the Departments have limited direct enforcement authority 
over other service providers (including, for example, an MBHO or the 
TPA or TPAs of a self-insured health plan).\156\ However, under ERISA, 
such service providers may be fiduciaries with respect to private 
employment-based group health plans. To the extent such service 
providers are fiduciaries for private employment-based plans, they are 
subject to the provisions governing fiduciary conduct and liability, 
including the provisions for co-fiduciary liability under ERISA section 
405. The Departments are committed to using all available authority to 
ensure compliance by plans and issuers with MHPAEA for all entities 
that play a role in administering and designing benefits. The 
Departments solicit comments on how best to ensure all the entities 
involved in the design and administration of a group health plan's 
benefits provide the necessary information to plans and issuers to 
support their efforts to comply with MHPAEA.
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    \155\ As noted earlier in this preamble, HHS enforces applicable 
provisions of Title XXVII of the PHS Act, including the provisions 
added by MHPAEA, with respect to health insurance issuers offering 
group and individual health insurance coverage in States that elect 
not to enforce or fail to substantially enforce MHPAEA or another 
PHS Act provision.
    \156\ The 2022 MHPAEA Report to Congress notes that EBSA has 
used the process outlined in section 203 of the CAA, 2021 as a 
method to engage with service providers (such as TPAs and MBHOs) to 
obtain wider-scope corrections affecting many plans at once, 
including pursuing cases against issuers in their capacity as 
administrative services-only providers (ASOs) to self-insured plans 
covered by ERISA.
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1. Content of Comparative Analyses--26 CFR 54.9812-2(c), 29 CFR 
2590.712-1(c), and 45 CFR 146.137(c)
    The Departments propose requirements at 26 CFR 54.9812-2(c), 29 CFR 
2590.712-1(c), and 45 CFR 146.137(c) governing the content of the 
comparative analyses required by Code section 9812(a)(8), ERISA section 
712(a)(8), and PHS Act section 2726(a)(8). The proposed content 
requirements for comparative analyses as set forth in these proposed 
regulations are based on the stepwise process found in the 2020 MHPAEA 
Self-Compliance Tool, described earlier in this preamble, and by the 
express requirements of the governing statutory provisions.
    Consistent with Code section 9812(a)(8), ERISA section 712(a)(8), 
and PHS Act section 2726(a)(8) these proposed rules would require that 
a comparative analysis include, at a minimum, with respect to each NQTL 
imposed under a plan or coverage option on mental health or substance 
use disorder benefits, six specific elements:
    (1) a description of the NQTL;
    (2) the identification and definition of the factors used to design 
or apply the NQTL;
    (3) a description of how factors are used in the design or 
application of the NQTL;
    (4) a demonstration of comparability and stringency, as written;
    (5) a demonstration of comparability and stringency in operation; 
and
    (6) findings and conclusions.
    Additionally, these proposed rules would require each plan or 
issuer to prepare and make available to the Departments or applicable 
State authority, upon request, a written list of all NQTLs imposed 
under the plan or coverage and a general description of any information 
considered or relied upon by the plan or issuer in preparing the 
comparative analysis for each NQTL. This requirement is consistent with 
FAQs Part 45, which in addition to highlighting four NQTLs that would 
be enforcement priorities in the near term,\157\ stated that plans and 
issuers should be prepared to make available a list of all other NQTLs 
for which they have prepared a comparative analysis and a general 
description of any documentation considered or relied upon to prepare 
each analysis.\158\ The Departments propose to include a requirement to 
make such a list available to the Departments in connection with a 
request for a comparative analysis and to clarify that this requirement 
applies with respect to comparative analyses prepared for all NQTLs, 
not just those for which the Departments or an applicable State 
authority have requested a comparative analysis or other information at 
any particular time. For plans subject to ERISA, these proposed rules 
would also require that the plan or issuer provide this list and 
general description to the named fiduciaries required to review the 
findings or conclusions of each comparative analysis, as discussed 
later in this preamble.
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    \157\ See FAQs Part 45, Q8 (listing prior authorization 
requirements for in-network and out-of-network inpatient services; 
concurrent review for in-network and out-of-network inpatient and 
outpatient services; standards for provider admission to participate 
in a network, including reimbursement rates; and out-of-network 
reimbursement rates (plan methods for determining usual, customary, 
and reasonable charges). Additionally, in the 2023 MHPAEA Report to 
Congress, EBSA added two areas of priority for the applicable 
Reporting Period based on CAA, 2021 implementation experience during 
the first reporting period: impermissible exclusions of key 
treatments for mental health conditions and substance use disorders 
and adequacy standards for mental health and substance use disorder 
provider networks.
    \158\ FAQs Part 45, Q8.
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    For each comparative analysis, the description of the NQTL required 
under proposed 26 CFR 54.9812-2(c)(1), 29 CFR 2590.712-1(c)(1), and 45 
CFR 146.137(c)(1) would be required to identify the NQTL that is the 
subject of the comparative analysis, including the specific terms of 
the plan or coverage or other relevant terms regarding the NQTL, the 
policies or guidelines (internal or external) in which the NQTL appears 
or is described, and the applicable sections of any other relevant 
documents, such as provider contracts that describe the NQTL, 
consistent with Code section 9812(a)(8)(A)(i), ERISA section 
712(a)(8)(A)(i), and PHS Act section 2726(a)(8)(A)(i). This would 
include the documents that contain the specific language of the NQTL 
that the plan or issuer imposes.
    The plan or issuer also would be required to identify all mental 
health or substance use disorder benefits and medical/surgical benefits 
to which the NQTL applies, including a list of which benefits are 
considered to be mental health and substance use disorder benefits and 
which benefits are considered to be medical/surgical benefits 
(consistent with the proposed definitions of those terms). 
Additionally, each plan or issuer would be required to include in its 
comparative analysis a description of which benefits are included in 
each classification of benefits set forth in 26 CFR 54.9812-
1(c)(2)(ii)(A), 29 CFR 2590.712(c)(2)(ii)(A), and 45 CFR 
146.136(c)(2)(ii)(A). Finally, the plan or issuer would be required to 
identify the predominant NQTL applicable to substantially all medical/
surgical benefits in each classification, including an explanation of 
how the plan or issuer determined which variation is the predominant 
NQTL as compared to other variations, as well as how the plan 
identified the variations of the NQTL. This requirement is consistent 
with the statutory language that requires a

[[Page 51591]]

description of the medical/surgical benefits subject to the NQTL and 
would operate in support of the proposed no more restrictive 
requirement at 26 CFR 54.9812-1(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 
45 CFR 146.136(c)(4)(i), discussed earlier in this preamble.
    The second proposed content element of the comparative analysis, 
under proposed 26 CFR 54.9812-2(c)(2), 29 CFR 2590.712-1(c)(2), and 45 
CFR 146.137(c)(2), would be that a plan or issuer would be required to 
identify and define all of the factors considered or relied upon to 
design or apply the NQTL. The plan or issuer would be required to 
identify all of the factors considered, as well as the evidentiary 
standards considered or relied upon to design or apply each factor and 
the evidence or sources from which each evidentiary standard was 
derived, in determining which mental health or substance use disorder 
benefits and which medical/surgical benefits are subject to the NQTL.
    The plan or issuer would then be required to define each factor. 
The definition of each factor would be required to include a detailed 
description of the factor, and a description of each evidentiary 
standard (and the source of each evidentiary standard) identified. The 
Departments stress that when identifying the evidence or sources from 
which an evidentiary standard is derived, the plan or issuer should be 
prepared to provide the copies of the actual evidence or source used, 
as well as the date and relevant citation for the correct version of 
the document used.
    The third proposed content element of the comparative analysis, 
under 26 CFR 54.9812-2(c)(3), 29 CFR 2590.712-1(c)(3), and 45 CFR 
146.137(c)(3) of these proposed rules, would be a description of how 
each factor is used in the design or application of the NQTL to mental 
health and substance use disorder benefits and medical/surgical 
benefits in a classification. This section of the comparative analysis 
would be required to include a detailed explanation of how each factor 
identified and defined in the comparative analysis is used to determine 
which mental health or substance use disorder benefits and which 
medical/surgical benefits are subject to the NQTL. The description 
would also include an explanation of the evidentiary standards or other 
information or sources (if any) considered or relied upon in designing 
or applying the factors or relied upon in designing and applying the 
NQTL, including in the determination of whether and how mental health 
or substance use disorder benefits or medical/surgical benefits are 
subject to the NQTL. In instances in which the application of the 
factor depends on specific decisions made in the administration of 
benefits, the comparative analysis would be required to provide 
information on the nature and timing of the decisions, and the 
professional designations and qualifications of each decision maker. 
For example, for a prior authorization NQTL that uses quality measures 
as a factor, the plan or issuer would be required to describe the 
nature of the decisions reviewers make to apply the factor (and the 
timing of those decisions) and describe the reviewers' professional 
designations and qualifications (including, for example, whether they 
are psychiatrists or psychologists) when using the factor to apply the 
NQTL to mental health benefits.
    These proposed rules would further provide that, to the extent that 
more than one factor is identified and defined with respect to an NQTL, 
the comparative analysis would be required to explain how such factors 
relate to each other; the order in which all the factors are applied, 
including when they are applied; whether and how any factors are given 
more weight than others; and the reasons for the ordering or weighting 
of the factors. The analysis would also be required to address any 
deviation(s) or variation(s) from a factor, its applicability, or its 
definition (including the evidentiary standards used to define the 
factor and the information or sources from which each evidentiary 
standard was derived), such as how the factor is used differently to 
apply the NQTL to mental health and substance use disorder benefits as 
compared to medical/surgical benefits, and a description of how the 
plan or issuer establishes such deviations or variations. For purposes 
of these proposed rules, the terms ``deviations'' or ``variations'' in 
this context refer to any differences in how a factor is applied with 
respect to an NQTL. For example, if the NQTL that is the subject of a 
comparative analysis is the calculation of reimbursement rates for out-
of-network providers, and the factors used to determine how the NQTL 
applies to mental health and substance use disorder providers are the 
geographic location of the providers and licensing and accreditation of 
providers, the comparative analysis would be required to explain in 
detail how each factor is used to determine the out-of-network 
reimbursement rates for both mental health and substance use disorder 
providers and medical/surgical providers, describe how the two factors 
relate to each other, and address how the plan or issuer establishes 
any deviations or variations from these factors.
    Under the fourth and fifth proposed content elements of a 
comparative analysis, these proposed rules would require plans and 
issuers to demonstrate that, in any classification, under the terms of 
the plan (or health insurance coverage), both as written (under the 
fourth content element) and in operation (under the fifth content 
element), any processes, strategies, evidentiary standards, or other 
factors used in designing and applying the NQTL to mental health or 
substance use disorder benefits in the classification are comparable 
to, and are applied no more stringently than, those used in designing 
and applying the NQTL with respect to medical/surgical benefits. These 
content elements are consistent with the statutory requirement that 
comparative analyses demonstrate ``that the processes, strategies, 
evidentiary standards, and other factors used to apply the NQTLs to 
mental health or substance use disorder benefits, as written and in 
operation, are comparable to, and are applied no more stringently than, 
the processes, strategies, evidentiary standards, and other factors 
used to apply the NQTLs to medical/surgical benefits in the benefits 
classification,'' \159\ as well as the provisions of the 2013 final 
regulations and these proposed rules that would require plans and 
issuers to analyze parity with respect to NQTLs as written and in 
operation (recognizing that a plan or issuer may have written processes 
or plan or coverage terms that are compliant as written, but might not 
be compliant in practice).\160\
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    \159\ Code section 9812(a)(8)(A)(iv), ERISA section 
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
    \160\ 26 CFR 54.9812(c)(4)(i), 29 CFR 2590.712(c)(4)(i), and 45 
CFR 146.136(c)(4)(i).
---------------------------------------------------------------------------

    For example, a plan or issuer might use a factor that allows 
discretion in applying an NQTL that is not captured in detail in 
written plan or coverage terms or procedures (such as whether an 
individual may be safely and effectively transitioned to a lower level 
of care), which might not be comparable in practice when processing 
claims for mental health and substance use disorder benefits as 
compared to when processing claims for medical/surgical benefits. 
Additionally, a plan or issuer might have written processes that are 
comparable for an NQTL applicable to

[[Page 51592]]

mental health and substance use disorder benefits and medical/surgical 
benefits, but that are applied in a more stringent manner to mental 
health and substance use disorder benefits than to medical/surgical 
benefits in operation. Thus, it is essential that the Departments are 
able to determine that, as written and in operation, any processes, 
strategies, evidentiary standards, or other factors used in designing 
and applying the NQTL to mental health or substance use disorder 
benefits in the classification are comparable to, and are applied no 
more stringently than, those used in designing and applying the NQTL to 
medical/surgical benefits.
    To demonstrate comparability and stringency as written under the 
fourth content element in proposed 26 CFR 54.9812-2(c)(4), 29 CFR 
2590.712-1(c)(4), and 45 CFR 146.137(c)(4), plans and issuers would be 
required to include in their comparative analysis, with respect to the 
NQTL and the factors used in applying the NQTL, documentation of each 
factor identified and defined in the comparative analysis that was 
applied to determine whether the NQTL applies to mental health or 
substance use disorder benefits and medical/surgical benefits in a 
classification. This would include, as relevant, quantitative data, 
calculations, or other analyses showing whether, in each classification 
in which the NQTL applies, mental health or substance use disorder 
benefits and medical/surgical benefits met or did not meet any 
applicable threshold identified in the relevant evidentiary standard, 
and the evaluation of relevant data as required under 26 CFR 54.9812-
1(c)(4)(iv)(A), 29 CFR 2590.712(c)(4)(iv)(A), and 45 CFR 
146.136(c)(4)(iv)(A) of these proposed rules, to determine that the 
NQTL would or would not apply. In addition, such documentation would 
include records maintained by the plan or issuer documenting the 
consideration and application of all factors and evidentiary standards, 
as well as the results of their application. Such records could include 
meeting minutes, or calculations related to quantitative factors, such 
as costs.
    Plans and issuers would also be required to include in their 
comparative analysis, in each classification in which the NQTL applies, 
a comparison of how the NQTL, as written, is designed and applied to 
mental health or substance use disorder benefits and to medical/
surgical benefits, including the specific provisions of any forms, 
checklists, procedure manuals, or other documentation used in designing 
and applying the NQTL or that address the application of the NQTL. 
Additionally, the plan or issuer would be required to include in its 
comparative analysis documentation demonstrating how the factors are 
comparably applied, as written, to mental health or substance use 
disorder benefits and medical/surgical benefits in each classification, 
to determine which benefits are subject to the NQTL. To the extent 
there is any deviation(s) or variation(s) in the application of a 
factor, the plan or issuer would be required to include in their 
comparative analysis an explanation of the reason(s) for any 
deviation(s) or variation(s) in the application of a factor used to 
apply the NQTL, or the application of the NQTL, to mental health or 
substance use disorder benefits as compared to medical/surgical 
benefits, and how the plan or issuer establishes such deviation(s) or 
variation(s), including in the definition of the factors, the 
evidentiary standards used to define the factors, and the sources from 
which the evidentiary standards were derived; in the design of the 
factors or evidentiary standards; or in the application or design of 
the NQTL. As noted earlier in this preamble, the terms ``deviations'' 
or ``variations'' refer to any differences in how a factor is applied.
    In the fifth proposed content element of a comparative analysis, to 
demonstrate comparability and stringency in operation, proposed 26 CFR 
54.9812-2(c)(5), 29 CFR 2590.712-1(c)(5), and 45 CFR 146.137(c)(5) 
would require a plan or issuer to include in its comparative analysis, 
with respect to the NQTL and the factors used in designing and applying 
the NQTL, a comprehensive explanation of how the plan or issuer ensures 
that, in operation, the processes, strategies, evidentiary standards, 
or other factors used in designing and applying the NQTL to mental 
health or substance use disorder benefits in a classification are 
comparable to, and are applied no more stringently than, the processes, 
strategies, evidentiary standards, or other factors used in designing 
and applying the NQTL with respect to medical/surgical benefits. This 
comprehensive explanation would be required to include an explanation 
of any methodology and underlying data used to demonstrate the 
application of the NQTL in operation, and the sample period, inputs 
used in any calculations, definitions of terms used, and any criteria 
used to select the mental health or substance use disorder benefits and 
medical/surgical benefits to which the NQTL is applicable.
    Requiring data to be provided to demonstrate compliance with MHPAEA 
is not a new concept. To facilitate the compliance review of NQTLs, 
many States have adopted reporting requirements capturing specific data 
that reflect how the application of certain NQTLs affect outcomes.\161\ 
Examples of data required to be included in reporting by States 
includes rates of utilization review (including approvals and denials), 
rates of appeal for adverse benefit determinations (upheld and 
overturned), the numbers or rates of prior or concurrent authorization 
requests and denials, percentages of claims for mental health and 
substance use disorder benefits and medical/surgical benefits that are 
in-network, and provider reimbursement rates.\162\ Additionally, a 
number of States have established quantitative standards for assessing 
network adequacy, based on maximum travel time or distance, provider-
to-enrollee ratios, and maximum appointment wait times.\163\ HHS 
established similar quantitative standards for assessing network 
adequacy for QHPs offered through the Federally-facilitated Exchanges 
starting with benefit year 2023.\164\ The proposed requirement that 
plans and issuers include such data, and their evaluation of such data, 
as part of a comparative analysis would support the Departments' 
efforts to ensure compliance with MHPAEA, with a focus on access to 
mental health and substance use disorder care, by helping to identify 
instances of operational noncompliance with the requirements of MHPAEA 
and its implementing regulations.
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    \161\ See State Parity Implementation Survey, available at 
https://www.paritytrack.org/reports/#state-disparities.
    \162\ See, e.g., N.Y. Ins. Law 343(b); DC Code Sec. 31-3175.03; 
and Tex. Ins. Code Sec. 1355.254 (coverage for mental health 
conditions and substance use disorders).
    \163\ For examples of these State-imposed quantitative standards 
for assessing network adequacy, see https://www.ncsl.org/health/health-insurance-network-adequacy-requirements.
    \164\ 87 FR 27208 (May 6, 2022); 2023 Final Letter to Issuers in 
the Federally-facilitated Exchanges, available at https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf.
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    Therefore, as part of a comparative analysis, under these proposed 
rules, plans and issuers would be required to include the relevant data 
required under proposed 26 CFR 54.9812-1(c)(4)(iv)(A), 29 CFR 
2590.712(c)(4)(iv)(A), and 45 146.136(c)(4)(iv)(A) and evaluate the 
outcomes that resulted from the application of the NQTL to mental 
health or substance disorder benefits and medical/surgical benefits, 
including an evaluation of such relevant data in their comparative 
analysis, in order to demonstrate whether, in operation, any processes, 
strategies, evidentiary

[[Page 51593]]

standards, or other factors used in applying the NQTL to mental health 
or substance use disorder benefits in a classification are comparable 
to, and are applied no more stringently than those used in applying the 
limitation with respect to medical/surgical benefits in the 
classification. The collection and evaluation of this data would assist 
plans, issuers, participants, beneficiaries, and the Departments (or 
applicable State authority) in identifying an NQTL that might not 
comply with MHPAEA.
    As part of this evaluation, the comparative analysis would be 
required to include a detailed explanation of material differences in 
outcomes that are not attributable to differences in the comparability 
or relative stringency of the NQTL as applied to mental health or 
substance use disorder benefits and medical/surgical benefits, as well 
as the basis for concluding that material differences in outcomes are 
not attributable to differences in the comparability or relative 
stringency of the NQTL. The requirement that plans and issuers include 
the relevant data, and their evaluation and analysis of such data, in 
their comparative analysis is consistent with the CAA, 2021's 
amendments to MHPAEA, which require plans and issuers to demonstrate 
that, in operation, the processes, strategies, evidentiary standards, 
and other factors used in applying the NQTL to mental health or 
substance use disorder benefits are comparable to, and are applied no 
more stringently than, those used to apply the NQTL to medical/surgical 
benefits.\165\ Similarly, to be compliant with this proposed 
requirement, plans and issuers must adequately demonstrate that any 
material differences in outcomes are not due to the processes, 
strategies, evidentiary standards, and other factors being applied more 
stringently to mental health or substance use disorder benefits, and 
that they are designed and applied comparably.
---------------------------------------------------------------------------

    \165\ Code section 9812(a)(8)(A)(iv), ERISA section 
712(a)(8)(A)(iv), and PHS Act section 2726(a)(8)(A)(iv).
---------------------------------------------------------------------------

    The Departments note that their authority to require data is not 
limited to the data required by 26 CFR 54.9812-2(c)(5), 29 CFR 
2590.712-1(c)(5), and 45 CFR 146.137(c)(5). The proposed requirement to 
evaluate a comparative analysis for operational compliance with 
MHPAEA's requirements would permit the Departments to require the plan 
or issuer to provide, as part of that process, additional data to 
analyze assertions made in the comparative analysis. For example, the 
Departments may make such a request in instances in which the 
Departments conclude that a plan or issuer has not submitted to the 
Departments sufficient information to assess compliance with MHPAEA as 
part of its comparative analysis, as described later in this preamble. 
Plans and issuers performing and documenting the required comparative 
analysis of an NQTL must also provide any and all relevant information 
used to design or apply the NQTL, as explained earlier in this 
preamble. Finally, the Departments may also require additional 
information under their authority to investigate plans and 
issuers.\166\
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    \166\ See, e.g., ERISA section 504.
---------------------------------------------------------------------------

    The comparative analysis would be required to include a discussion 
of any measures that have been or are being implemented by the plan or 
issuer to mitigate any materially disparate outcomes with respect to 
mental health or substance use disorder benefits and medical/surgical 
benefits, including the actions the plan or issuer is taking under 
these proposed rules to address the material differences in access to 
mental health or substance use disorder benefits as compared to 
medical/surgical benefits, including the actions required by 26 CFR 
54.9812-1(c)(4)(iv)(B)(1), 29 CFR 2590.712(c)(4)(iv)(B)(1), and 45 CFR 
146.136(c)(4)(iv)(B)(1). As discussed earlier in this preamble and in 
previous guidance related to MHPAEA, evaluating quantitative outcomes 
helps to identify areas of potential noncompliance. Therefore, these 
proposed rules would require that as part of a sufficient comparative 
analysis, a plan or issuer must carefully assess any outcomes that 
resulted from the application of an NQTL, explain material differences 
in those outcomes, and disclose any measures to mitigate those 
disparate outcomes.
    The sixth proposed content element of a comparative analysis under 
proposed 26 CFR 54.9812-2(c)(6), 29 CFR 2590.712-1(c)(6), and 45 CFR 
146.137(c)(6) (and consistent with Code section 9812(a)(8)(A)(v), ERISA 
section 712(a)(8)(A)(v), and PHS Act section 2726(a)(8)(A)(v)), would 
require that a comparative analysis address findings and conclusions as 
to the comparability of the processes, strategies, evidentiary 
standards, and other factors used in designing and applying the NQTL to 
mental health or substance use disorder benefits and medical/surgical 
benefits within each classification, and the relative stringency of 
their application, both as written and in operation. The comparative 
analysis would be required to include any findings or conclusions 
indicating that the plan or coverage is not (or might not be) in 
compliance with the provisions of these proposed rules for NQTLs, 
including any actions the plan or issuer has taken or intends to take 
to address any potential areas of concern or noncompliance. The 
comparative analysis would be required to include a reasoned and 
detailed discussion of those findings and conclusions, as well as 
citations to any additional specific information not otherwise included 
in the comparative analysis that supports the findings and conclusions.
    Additionally, these proposed rules would require that the 
comparative analysis include the date of the analysis and the title and 
credentials of all relevant persons who participated in the performance 
and documentation of the comparative analysis. If the comparative 
analysis relies upon an evaluation by a reviewer or consultant 
considered by the plan or issuer to be an expert, the comparative 
analysis would be required to include an assessment of each expert's 
qualifications and the extent to which the plan or issuer ultimately 
relied upon each expert's evaluation in performing and documenting the 
comparative analysis of the design and application of each NQTL 
applicable to both mental health or substance use disorder benefits and 
medical/surgical benefits.
    Finally, for plans subject to ERISA, the comparative analysis would 
be required to include a certification by one or more named fiduciaries 
who have reviewed the analysis, stating whether they found the 
comparative analysis to be in compliance with the content requirements 
of these proposed rules. This requirement, along with the requirement 
that the plan provide named fiduciaries with a written list of all 
NQTLs and a general description of any existing documentation relied on 
by the plan or issuer in preparing the comparative analysis for each 
NQTL, would help ensure that plan fiduciaries meet their obligations 
under ERISA to review the comparative analyses and properly monitor 
their plans for compliance with MHPAEA.
    The Departments emphasize that the proposed requirement to include 
this information on the factors, evidentiary standards, and sources 
used to design or apply the NQTL is crucial to understanding whether 
the NQTL complies with MHPAEA's requirements. Plans and issuers must 
disclose information as required by MHPAEA to participants and 
beneficiaries, as well as the Departments, regardless of whether such 
information is ``proprietary'' and/

[[Page 51594]]

or has ``commercial value.'' \167\ Similarly, if finalized, plans and 
issuers must include all information required in the comparative 
analyses.
---------------------------------------------------------------------------

    \167\ See FAQs Part XXIX, Q12.
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    The Departments solicit comments on all aspects of the proposed 
content elements for NQTL comparative analyses, including whether there 
are additional considerations, such as the Kennedy Forum's Six-Step 
Parity Compliance Guide,\168\ or comparable State processes, that the 
Departments should incorporate into these proposed rules. The 
Departments also solicit comments on whether any of these proposed 
requirements related to the content of comparative analyses are 
superfluous, unhelpful, or unreasonably burdensome.
---------------------------------------------------------------------------

    \168\ The ``Six-Step'' Parity Compliance Guide for Non-
Quantitative Treatment Limitation (NQTL) Requirements, available at 
https://www.dol.gov/sites/dolgov/files/ebsa/laws-and-regulations/rules-and-regulations/public-comments/faq-38/00018.pdf.
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2. Requirement To Provide Comparative Analyses and Notices to the 
Departments and Other Individuals and Entities--26 CFR 54.9812-2(d) and 
(e), 29 CFR 2590.712-1(d) and (e), and 45 CFR 146.137(d) and (e)
    As specified in Code section 9812(a)(8), ERISA section 712(a)(8), 
and PHS Act section 2726(a)(8) and FAQs Part 45, effective February 10, 
2021, plans and issuers must be prepared to make their comparative 
analyses available to the Departments or applicable State authorities 
upon request. These proposed rules set forth proposed requirements 
related to submission of comparative analyses to the Departments or 
applicable State authorities once a request has been received by a plan 
or issuer. However, as discussed later in this section of the preamble, 
the requirement to perform and document comparative analyses of the 
design and application of NQTLs is not dependent upon a request by the 
Secretary or an applicable State authority, and plans and issuers 
should not wait for a request from the Secretary or applicable State 
authority to perform and document their comparative analyses.
    These proposed rules would require that plans and issuers make a 
comparative analysis required under 26 CFR 54.9812-2(b), 29 CFR 
2590.712-1(b), and 42 CFR 147.137(b) available and submit it upon 
request by the relevant Secretary. Once a comparative analysis is 
requested, these proposed rules would require plans and issuers to 
provide a comparative analysis within 10 business days of receipt of a 
request from the relevant Secretary (or an additional period of time 
specified by the relevant Secretary). This proposed deadline is 
consistent with the Departments' current enforcement practices for 
requesting comparative analyses from plans and issuers and would allow 
each Secretary to permit extensions of this deadline as warranted on a 
case-by-case basis.
    After a plan or issuer responds to an initial request for a 
comparative analysis, if the relevant Department (with jurisdiction 
over the group health plan (or health insurance coverage offered by an 
issuer in connection with such a plan)) concludes a plan or issuer has 
not submitted sufficient information for it to review the requested 
comparative analyses, Code section 9812(a)(8)(B)(ii), ERISA section 
712(a)(8)(B)(ii), and PHS Act section 2726(a)(8)(B)(ii) provide that 
the Departments shall specify to the plan or issuer the additional 
information the plan or issuer must submit to be responsive to the 
request. Under these proposed rules, the plan or issuer would be 
required to furnish this additional information to the relevant 
Secretary within 10 business days after the relevant Secretary 
specifies the additional information to be submitted (or an additional 
period of time specified by the relevant Secretary). As noted earlier 
in this preamble, a request for additional information by the relevant 
Department or an applicable State authority may include a request for 
data to analyze the assertions made in the comparative analyses, 
consistent with existing authority. This additional information or data 
may relate to the relevant data specified by the Departments to be 
included in a comparative analysis (discussed earlier in this preamble) 
or other data.
    In instances that the relevant Department has reviewed a plan's or 
issuer's comparative analyses (and any additional information submitted 
upon request), and made an initial determination that the plan or 
issuer is not in compliance with the requirements related to NQTLs, 
Code section 9812(a)(8)(B)(iii)(I)(aa), ERISA section 
712(a)(8)(B)(iii)(I)(aa), and PHS Act section 2726(a)(8)(B)(iii)(I)(aa) 
require the plan or issuer to respond to the Departments and specify 
the actions the plan or issuer will take to bring the plan or coverage 
into compliance (a corrective action plan) and provide additional 
comparative analyses that demonstrate compliance not later than 45 
calendar days after the initial determination of noncompliance. 
Consistent with these statutory provisions, these proposed rules would 
also require the plan or issuer to respond to the relevant Department 
and specify the actions the plan or issuer will take to bring the plan 
or coverage into compliance, and provide to the relevant Department 
additional comparative analyses meeting the requirements of these 
proposed rules that demonstrate compliance with MHPAEA not later than 
45 calendar days after the relevant Department's initial determination 
that the plan or issuer is not in compliance.
    If the relevant Department makes a final determination that the 
plan or issuer is not in compliance following the 45-calendar-day 
corrective action period, these proposed rules would provide at 26 CFR 
54.9812-2(d)(4), 29 CFR 2590.712-1(d)(4), and 45 CFR 146.137(d)(4) 
that, within 7 calendar days of the receipt of the final determination 
of noncompliance, the plan or issuer must provide a standalone notice 
that is not combined with any other notices or disclosures, as required 
under applicable Federal or State law, to all participants and 
beneficiaries enrolled in the plan or coverage that the plan or issuer 
has been determined to not be in compliance with the requirements of 
these proposed rules, consistent with Code section 
9812(a)(8)(B)(iii)(I)(bb), ERISA section 712(a)(8)(B)(iii)(I)(bb), and 
PHS Act section 2726(a)(8)(B)(iii)(I)(bb). The plan or issuer would 
also be required to provide a copy of the notice to the Secretary, any 
service provider involved in the claims process, and any fiduciary 
responsible for deciding benefit claims within the same time frame. The 
Departments solicit comments on the proposed timing of this notice, 
including whether requiring the notice to be provided within 7 calendar 
days of receipt of a final determination of noncompliance would provide 
sufficient time for plans and issuers to provide notice, or whether 
allowing the notice to be provided within 7 business days would be more 
practicable given holidays and weekends that could serve to effectively 
shorten the 7-calendar-day timeframe.
    The notice to participants and beneficiaries (which would include a 
participant's or beneficiary's authorized representative) informing 
them that the relevant Department has determined that their plan or 
coverage violates MHPAEA gives them critically important information 
for the pursuit and protection of their own benefit claims and rights 
and provides a powerful incentive for the plan or issuer to take 
necessary corrective actions to come into compliance following an 
initial determination of noncompliance.

[[Page 51595]]

    These proposed rules set forth requirements for the content of this 
notice and the manner in which it would be required to be provided. 
These proposed rules would require that the notice be written in plain 
language and in a manner calculated to be understood by the average 
plan participant or beneficiary. This concept is consistent with the 
Departments' transparency in coverage regulations,\169\ and the DOL's 
style and format requirements for summary plan descriptions under 
ERISA.\170\ The notice would be required to include the following 
statement prominently displayed on the first page, in no less than 14-
point font:
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    \169\ 26 CFR 54.9815-2715A1(a)(2)(xx), 29 CFR 2590.715-
2715A1(a)(2)(xix), 45 CFR 147.210(a)(2)(xx).
    \170\ 29 CFR 2520.102-2(a).
---------------------------------------------------------------------------

    ``Attention! The [Department of Labor/Department of Health and 
Human Services/Department of the Treasury] has determined that [insert 
the name of group health plan or health insurance issuer] is not in 
compliance with the Mental Health Parity and Addiction Equity Act.''
    The notice would also be required to contain a summary of any 
changes the plan or issuer has made as part of its corrective action 
plan specified to the Secretary following the initial determination of 
noncompliance, including an explanation of any opportunity for a 
participant or beneficiary to have a claim for benefits reprocessed. 
Additionally, the notice would be required to include a summary of the 
Secretary's final determination that the plan or issuer is not in 
compliance with MHPAEA, including any provisions or practices 
identified to be in violation of MHPAEA, any additional corrective 
actions identified by the Secretary in the final determination notice, 
and information on how participants and beneficiaries can obtain a copy 
of the final determination of noncompliance from the plan or issuer. 
This notice would also be required to include any other actions the 
plan or issuer is taking to come into compliance with MHPAEA, 
information on when the plan or issuer will take (or has taken) such 
actions, and a clear and accurate statement explaining whether the 
Secretary has indicated that those actions, if completed, will result 
in compliance. Finally, these proposed rules would require the notice 
include contact information for questions and complaints, with a 
statement explaining how participants and beneficiaries can obtain more 
information about the notice, including a phone number and an email or 
web portal address for the plan or issuer, and contact information for 
the relevant Department.
    Under these proposed rules, a plan or issuer would be required to 
make the notice available in paper form. The plan or issuer may also 
make the notice available electronically (such as by email or an 
internet posting) if the format is readily accessible, the notice is 
provided in paper form free of charge upon request, and, in a case in 
which the electronic form is an internet posting, the plan or issuer 
timely notifies the participant or beneficiary in paper form (such as a 
postcard) or email that the documents are available on the internet, 
provides the internet address, and notifies the participant or 
beneficiary that the documents are available in paper form upon 
request. This approach is similar to standards for when a plan or 
issuer is permitted to provide a copy of their plan's or coverage's 
summary of benefits and coverage with respect to participants and 
beneficiaries who are eligible but not enrolled for coverage.\171\ For 
ERISA plans, the plan or issuer would also be required to ensure that 
the notice is provided to any service provider involved in the claims 
process, and any fiduciary responsible for deciding benefit claims 
within 7 calendar days of receipt of the final determination of 
noncompliance, so that the service provider or fiduciary can 
appropriately take the violation into account in deciding claims in 
compliance with the requirements of 29 CFR 2590.712(c)(4) and in 
accordance with section 404(a)(1)(D) of ERISA.
---------------------------------------------------------------------------

    \171\ See 26 CFR 54.9815-2715(a)(4)(ii)(B), 29 CFR 2590.715-
2715(a)(4)(ii)(B), 45 CFR 147.200(a)(4)(ii)(B).
---------------------------------------------------------------------------

    In addition to making the comparative analyses available upon 
request to the relevant Secretary, 26 CFR 54.9812-2(e), 29 CFR 
2590.712-1(e), and 45 CFR 146.137(e) of these proposed rules would 
require that plans and issuers make available the comparative analyses 
required by 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 
when requested by any applicable State authority. While these proposed 
rules would codify the statutory requirement to make comparative 
analyses available to the applicable State authority upon request, 
these proposed rules do not otherwise apply the timeframes and 
processes regarding the Secretarial request process to requests made by 
applicable State authorities. The Departments seek comment on whether, 
in cases in which an applicable State authority makes a request for an 
NQTL comparative analysis, the proposed requirements in paragraph (d) 
related to submission of comparative analyses to the Secretary, 
including the proposed notice requirement in paragraph (d)(4), should 
apply to plans and issuers with respect to a request made by the 
applicable State authority. In cases of an adverse benefit 
determination, non-grandfathered group health plans and health 
insurance issuers offering non-grandfathered group or individual health 
insurance coverage would be required to make these comparative analyses 
available to participants or beneficiaries, and providers or other 
individuals acting as their authorized representative, upon request and 
in accordance with the requirements under section 2719 of the PHS Act 
and its implementing regulations.\172\ Finally, the Departments solicit 
comment on other measures to increase transparency and better inform 
the general public regarding final agency determinations of 
noncompliance of plans or issuers with MHPAEA.
---------------------------------------------------------------------------

    \172\ 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 
147.136.
---------------------------------------------------------------------------

    Additionally, under these proposed rules, plans subject to ERISA 
would be required to make these comparative analyses available to 
participants and beneficiaries upon request, consistent with the 
interpretation discussed earlier in this preamble that comparative 
analyses and any other applicable information required under the CAA, 
2021 and these proposed rules are instruments under which a plan is 
established or operated. If a provider or other person is acting as a 
participant's or, beneficiary's, authorized representative, plans 
subject to ERISA would be required to make this analysis available to 
the provider or other authorized representative.
    The Departments have received questions about when plans and 
issuers are required to perform and document comparative analyses, and 
how often they must be updated. The Departments are aware of reports 
that some plans (or their TPAs or other service providers) and issuers 
have not documented their comparative analyses and instead wait until 
the Departments, or an applicable State authority, request comparative 
analyses, or indicate that the plan or issuer is otherwise under 
investigation. The Departments are also aware of reports that self-
insured plans have been unsuccessful in receiving comparative analyses 
(or the information required to perform and document comparative 
analyses) from their TPAs or other service providers in response to a 
request. The Departments emphasize that the requirement to perform and

[[Page 51596]]

document comparative analyses of the design and application of NQTLs 
has been effective under the CAA, 2021 for more than two years (since 
February 10, 2021) and is an independent statutory obligation that is 
not dependent upon a request by the Secretary or an applicable State 
authority. It is an affirmative statutory obligation that applies 
irrespective of any such request.
    The requirements under Code section 9812(a)(8), ERISA section 
712(a)(8), and PHS Act section 2726(a)(8) and these proposed rules to 
perform and document comparative analyses of the design and application 
of NQTLs are essential components of a plan's or issuer's legal 
obligation to ensure compliance with MHPAEA, and failure to satisfy 
those requirements puts participants and beneficiaries at risk of their 
mental health and substance use disorder benefits not being in parity 
with medical/surgical benefits. Therefore, plans and issuers should 
work with their service providers to ensure that they have performed 
and documented comparative analyses for their NQTLs as required by 
MHPAEA, as amended by the CAA, 2021, regardless of the timing of any 
request by the Departments, applicable State authorities, or 
participants and beneficiaries. Plans and issuers and their service 
providers must also ensure that the comparative analyses reflect the 
current terms of the plan or coverage, which may require them to update 
their comparative analyses, or perform and document new comparative 
analyses when there is a change in plan benefit design, administration 
or utilization that is not reflected in the current version of the 
comparative analyses.
    Finally, nothing in these proposed rules, should be construed to 
prevent the relevant Secretary from acting within the scope of existing 
authorities to address violations of MHPAEA.

C. Applicability--26 CFR 54.9812-1(i), 29 CFR 2590.712(i), and 45 CFR 
146.136(i) and 26 CFR 54.9812-2(g), 29 CFR 2590.712-1(g), and 45 CFR 
146.137(g)

    While the Departments are of the view that the provisions included 
in these proposed rules, if finalized, are critical to helping to 
ensure access to vital mental health and substance use disorder 
benefits, the Departments also recognize that new requirements may take 
time for plans and issuers to implement. In order to strike an 
appropriate balance, the Departments propose to amend 26 CFR 54.9812-
1(i)(1), 29 CFR 2590.712(i)(1), and 45 CFR 146.136(i)(1) to specify 
that except as provided in paragraph (i)(2) of the 2013 final 
regulations, these proposed rules, if finalized, would apply on the 
first day of the first plan year beginning on or after January 1, 
2025.\173\ Until the applicability date, plans and issuers would be 
required to continue to comply with 26 CFR 54.9812-1, revised as of 
April 1, 2023, 29 CFR 2590.712, revised as of July 1, 2022, and 45 CFR 
146.136, revised as of October 1, 2021, as applicable.
---------------------------------------------------------------------------

    \173\ But see 26 CFR 54.9812-1(e)(4), 29 CFR 2590.712(e)(4), and 
45 CFR 146.136(e)(4), which explains how these requirements interact 
with the requirement to provide EHBs under 45 CFR 147.150 and 
156.115.
---------------------------------------------------------------------------

    For similar reasons, the Departments also propose that the 
requirements in 26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 146.137 
of these proposed rules would become effective for plan years beginning 
on or after January 1, 2025. However, the Departments remind plans and 
issuers \174\ that the statutory provisions added to MHPAEA by the CAA, 
2021 are self-implementing and took effect on February 10, 2021. 
Therefore, the proposed delayed applicability date for these proposed 
rules does not alter a plan's or issuer's obligations under the 
statute. As such, plans and issuers must continue performing and 
documenting comparative analyses of the design and application of NQTLs 
in accordance with the statutory requirements and make them available 
to the Departments or applicable State authorities before the 
applicability date of these proposed rules, if finalized. The 
Departments request comments on the proposed applicability date.
---------------------------------------------------------------------------

    \174\ Consistent with the statute, under these proposed rules, 
the comparative analysis requirements under proposed 26 CFR 54.9812-
2, 29 CFR 2590.712-1, and 45 CFR 146.137 would not apply to a plan 
or issuer that qualifies for the small employer exemption under 26 
CFR 54.9812-1(f), 29 CFR 2590.712(f), and 45 CFR 146.136(f) or the 
increased cost exemption under 26 CFR 54.9812-1(g), 29 CFR 
2590.712(g), and 45 CFR 146.136(g).
---------------------------------------------------------------------------

D. Severability--26 CFR 54.9812-1(j), 29 CFR 2590.712(j), and 45 CFR 
146.136(j) and 26 CFR 54.9812-2(h), 29 CFR 2590.712-1(h), and 45 CFR 
146.137(h)

    The Departments propose to include severability clauses in these 
proposed rules to capture the Departments' intent that, to the extent a 
reviewing court holds that any provision of these proposed rules, if 
finalized, is unlawful by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
would be construed so as to continue to be given the maximum effect 
permitted by law. The Departments are of the view that this rulemaking, 
if finalized as proposed or as a substantially similar version, would 
provide comprehensive protections that implement MHPAEA's requirements. 
Overall, the aim of these proposed rules is to ensure that individuals 
with mental health conditions and substance use disorders benefit from 
the full protections afforded to them under MHPAEA, and that separate 
elements of this proposal would individually contribute to furthering 
that aim. The proposed requirements under 26 CFR 54.9812-1(c)(4)(i) and 
(ii), 29 CFR 2590.712(c)(4)(i) and (ii), and 45 CFR 146.136(c)(4)(i) 
and (ii), for instance, while part of a comprehensive regulatory 
scheme, are separate aspects of the parity analysis. Similarly, the 
rule requires plans and issuers to collect and evaluate outcomes data 
in a manner reasonably designed to assess the impact of the NQTL and 
consider the impact as part of the plan's or issuer's analysis of 
whether the limitation, in operation, complies with the requirements 
under 26 CFR 54.9812-1(c)(4)(i) and (ii), 29 CFR 2590.712(c)(4)(i) and 
(ii), and 45 CFR 146.136(c)(4)(i) and (ii). However, the requirements 
of paragraphs (c)(4)(i) and (ii) are meant to stand independently of 
the requirement to use outcomes data in such a manner and can continue 
to apply independently if other provisions of this rule are 
invalidated. Finally, while the Departments are of the view that the 
unique considerations of the NQTLs related to network composition merit 
the special rule at 26 CFR 54.9812-1(c)(4)(iv)(C), 29 CFR 
2590.712(c)(4)(iv)(C), and 45 CFR 146.136(c)(4)(iv)(C), the Departments 
believe that the other requirements of this proposed rule could 
continue to apply to NQTLs related to network composition, should this 
special rule be invalidated or stayed pending further action. 
Consequently, following a potential legal challenge, a court's decision 
to invalidate one standard does not affect any provision that relates 
to a separate standard. As indicated, these applications of 
severability to the provisions in these proposed rules is only an 
example and is not exhaustive of other potential applications. If a 
court were to hold that any provisions were invalid or unenforceable, 
these provisions in the proposed rules state that any affected 
provisions would be severable from the rest of these proposed rules, if 
finalized, and would not affect any other provisions or their 
application to persons not similarly situated or to dissimilar 
circumstances.

[[Page 51597]]

III. Overview of the Proposed Rules--Department of HHS

A. Sunset of MHPAEA Opt Out for Self-Funded Non-Federal Governmental 
Plans

    As noted earlier in this preamble, sponsors of self-funded, non-
Federal governmental plans are permitted to opt out of certain 
requirements categories of title XXVII of the PHS Act.\175\ Prior to 
the enactment of the CAA, 2023, such plans could elect to opt out of 
compliance with the requirements under MHPAEA, among three other 
requirements categories of title XXVII of the PHS Act.
---------------------------------------------------------------------------

    \175\ PHS Act section 2722(a)(2); 45 CFR 146.180.
---------------------------------------------------------------------------

    The CAA, 2023, enacted on December 29, 2022, included a provision 
that sunsets the election option with respect to MHPAEA.\176\ 
Specifically, section 1321 of title I of Division FF of the CAA, 2023 
amended PHS Act section 2722(a)(2) by adding language specifying that 
no MHPAEA opt-out election may be made on or after the date of the 
enactment of the CAA, 2023, and that generally, no MHPAEA opt-out 
election expiring on or after the date that is 180 days after the date 
of such enactment may be renewed. The CAA, 2023 included an exception 
for certain collectively bargained plans with an opt-out election in 
effect for MHPAEA that allows for a longer transition to come into 
compliance with MHPAEA. Specifically, the CAA, 2023 added language to 
PHS Act section 2722(a)(2) indicating that a plan that is subject to 
multiple collective bargaining agreements of varying lengths that has a 
MHPAEA opt-out election in effect as of the date of enactment of the 
CAA, 2023, that expires on or after the date that is 180 days after the 
enactment of the CAA, 2023, may extend such election until the date on 
which the term of the last such agreement expires.
---------------------------------------------------------------------------

    \176\ Division FF, Title I, Subtitle C, Chapter 3, sec. 1321, 
Public Law 117-328, 136 Stat. 4459 (Dec. 29, 2022).
---------------------------------------------------------------------------

    As a result of the CAA, 2023 amendments to PHS Act section 
2722(a)(2), self-funded, non-Federal governmental plan sponsors may 
elect to opt out of only the following three PHS Act requirements 
categories: standards relating to benefits for newborns and mothers 
(PHS Act section 2725), required coverage for reconstructive surgery 
following mastectomies (PHS Act section 2727), and coverage for 
dependent students on a medically necessary leave of absence (PHS Act 
section 2728).
    In this rulemaking, HHS proposes to amend 45 CFR 146.180 to align 
with the CAA, 2023 amendments to PHS Act section 2722(a)(2). 
Specifically, HHS proposes to redesignate paragraphs (a)(3) through (7) 
as paragraphs (a)(4) through (8) and add a new paragraph (a)(3) 
specifying that a sponsor of a self-funded, non-Federal governmental 
plan may not elect to exempt its plan(s) from any of the MHPAEA 
requirements on or after December 29, 2022 (the date of enactment of 
the CAA, 2023) through the process specified in 45 CFR 146.180. HHS 
also proposes to add new paragraph (f)(4)(iii) that would specify that 
in the case of a self-funded, non-Federal governmental plan that is 
subject to multiple collective bargaining agreements of varying lengths 
and that has an election with respect to any of the MHPAEA requirements 
in effect as of December 29, 2022, through the process specified in 45 
CFR 146.180, that expires on or after June 27, 2023 (the date that is 
180 days after the date of enactment of the CAA, 2023), the plan may 
extend such election until the date on which the term of the last such 
agreement expires. HHS also proposes to make conforming edits to 
paragraphs (a)(2), (a)(5)(i) and (ii), and (a)(6)(ii), as proposed to 
be redesignated, and paragraph (f)(1). The proposed amendments to 45 
CFR 146.180 would apply on the effective date of the final rule. HHS 
seeks comments on these proposed amendments to implement the sunset of 
the MHPAEA opt-out election and whether additional guidance or 
clarifications are necessary.

B. Applicability of MHPAEA to Individual Health Insurance Coverage

    The HHS regulation implementing MHPAEA for individual health 
insurance coverage is codified at 45 CFR 147.160. The regulation 
currently provides that the group market regulation implementing MHPAEA 
at 45 CFR 146.136 applies to health insurance coverage offered by a 
health insurance issuer in the individual market in the same manner and 
to the same extent as such provisions apply to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan in the large group market, for policy years beginning 
on or after the applicability date set forth in 45 CFR 146.136(i). 
Therefore, through cross-reference, the proposed amendments to 45 CFR 
146.136, if finalized, would apply in the same manner to health 
insurance issuers offering individual health insurance coverage. 
Further, HHS proposes to include a cross reference in 45 CFR 147.160 to 
the comparative analysis requirements proposed in 45 CFR 146.137 of 
these proposed rules. The cross reference would similarly make clear 
that the comparative analysis requirements apply to health insurance 
issuers offering individual health insurance coverage in the same 
manner that those provisions apply to group health plans and health 
insurance issuers offering coverage in connection with such plans.
    These provisions would apply to health insurance issuers offering 
individual health insurance coverage for policy years beginning on or 
after January 1, 2026. In the individual market, non-grandfathered 
individual health insurance coverage must be offered on a calendar year 
basis. Premium rates must be submitted to the applicable regulator and 
finalized prior to January 1 of each calendar year and rates cannot be 
modified during the year. The proposed applicability date is intended 
to provide time for issuers offering individual health insurance 
coverage to account for the effects of these rules following 
publication of the final rules and prior to when rates and benefits 
must be finalized and approved for the following calendar year.
    Finally, for greater clarity and precision and to align with the 
statutory terminology, HHS proposes to modify the regulation text to 
refer to ``individual health insurance coverage offered by a health 
insurance issuer'' as opposed to ``health insurance coverage offered in 
the individual market.''

IV. Request for Information on Ways To Improve Mental Health and 
Substance Use Disorder Benefits Through Other Consumer Protection Laws

    The Departments are committed to using their full statutory 
authority to address the nation's mental health and substance use 
disorder crises. In supporting the Administration's response to these 
epidemics, the Departments are considering ways to improve the coverage 
of mental health and substance use disorder benefits through other 
consumer protection laws, including the Affordable Care Act. The 
Departments request comments from all interested parties with respect 
to the following specific areas:
    1. Group health plan sponsors depend on administrative service 
providers, health insurance issuers, and other TPAs to design and 
manage their plans in a manner that complies with MHPAEA among other 
Federal consumer protections. However, plan sponsors are generally 
responsible for ensuring compliance and could, in certain 
circumstances, be liable for

[[Page 51598]]

penalties for any violations.\177\ Are there ways that TPAs could be 
further incentivized to facilitate compliance with MHPAEA on behalf of 
the plans that they design and administer?
---------------------------------------------------------------------------

    \177\ See Code section 4980D.
---------------------------------------------------------------------------

    2. Section 108 of Title I of Division BB of the CAA, 2021 requires 
the Departments to issue a rule implementing the provider 
nondiscrimination provisions in PHS Act section 2706(a). In 2014, the 
Departments published a request for information on provider 
nondiscrimination, followed by FAQs on these requirements.\178\ 
Following the enactment of the CAA, 2021, the Departments held a 
listening session on January 19, 2022 regarding implementation of the 
provider nondiscrimination provision, in order to foster an exchange of 
information and views and afford interested individuals and 
organizations an opportunity to share their perspective on what should 
be included in forthcoming proposed rules. As the Departments continue 
to work on proposed rules implementing the provider nondiscrimination 
provisions, are there ways that the Departments can enhance access to 
mental health and substance use disorder benefits through their 
implementation of PHS Act section 2706(a)?
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    \178\ 79 FR 14051 (March 12, 2014); FAQs about Affordable Care 
Act Implementation (Part XXVII) (May 26, 2015), Q4-5, available at 
https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/aca-part-xxvii.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/ACA-FAQs-Part-XXVII-MOOP-2706-FINAL.pdf.
---------------------------------------------------------------------------

    3. Code section 9820(a) and (b), ERISA section 720(a) and (b), and 
PHS Act section 2799A-5(a) and (b), as added by section 116 of title I 
of Division BB of the CAA, 2021, establish standards related to 
provider directories. The Departments intend to undertake notice and 
comment rulemaking to implement the provider directory requirements. 
Are there ways that the Departments can improve the coverage of and 
enhance access to mental health and substance use disorder benefits 
through their implementation of these provider directory requirements, 
particularly in underserved or rural areas where there may be limited 
access to the internet?
    4. Telehealth has become a vital means of providing health care, 
including mental health and substance use disorder care, especially in 
rural areas and in light of the COVID-19 PHE. For the duration of any 
plan year beginning before the end of the COVID-19 PHE, the Departments 
issued guidance providing relief from the group market reforms under 
part 7 of ERISA, title XXVII of the PHS Act, and chapter 100 of the 
Code for a group health plan (and health insurance coverage offered in 
connection with a group health plan) sponsored by a large employer that 
solely provides benefits for telehealth or other remote care services 
offered only to employees (or their dependents) who are not eligible 
for coverage under any other group health plan offered by that 
employer.\179\ However, these arrangements were required to continue to 
comply with certain Federal group market reforms, including the 
requirements under MHPAEA.\180\ How and to what extent has this 
guidance affected mental health and substance use disorder care and 
access? Would any further safeguards be needed? How can the Departments 
use telehealth or other remote care services to enhance access to 
mental health and substance use disorder treatment under the 
Departments' existing authority for both routine and crisis care for 
behavioral health conditions, including through parity requirements 
with respect to financial requirements and treatment limitations?
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    \179\ See FAQs Part 43, Q14.
    \180\ Id.
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    5. Under the internal claims and appeals and external review rules 
implementing the Affordable Care Act, which are generally applicable to 
all non-grandfathered group health plans and non-grandfathered group 
and individual health insurance coverage, claim denials related to 
medical judgment (including for mental health and substance use 
disorder benefits) are eligible for external review.\181\ The internal 
claims and appeals rules also provide that claimants (or their 
authorized representatives) are entitled to, upon request and free of 
charge, reasonable access to and copies of all documents, records, and 
other information relevant to the claimant's claim for benefits.\182\ 
This includes documents with information about the processes, 
strategies, evidentiary standards, and other factors used to apply an 
NQTL with respect to medical/surgical benefits and mental health or 
substance use disorder benefits under the plan.\183\ How can the 
Departments leverage ERISA's and the Affordable Care Act's existing 
claims procedure requirements to help facilitate access to mental 
health and substance use disorder benefits? For example, if a plan or 
issuer denies a mental health or substance use disorder benefit based 
on the plan's or issuer's determination that a lower level of care 
would be more appropriate, should the plan or issuer be required to 
identify the relevant lower level of care? Should plans and issuers be 
required to provide an explanation of how a particular NQTL was applied 
to particular benefits, beyond what is currently required by the claims 
procedure rules or other related provisions?
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    \181\ See 26 CFR 54.9815-2719, 29 CFR 2590.715-2719, and 45 CFR 
147.136. Grandfathered plans and issuers must also extend external 
review to adverse benefit determinations to items and services 
within the scope of the requirements for out-of-network emergency 
services, nonemergency services performed by nonparticipating 
providers with respect to patient visits to certain types of 
participating facilities, and air ambulance services furnished by 
nonparticipating providers of air ambulance services under the No 
Surprises Act, including for denials related to compliance with such 
requirements. Such items and services may include mental health and 
substance use disorder services. See 26 CFR 54.9815-2719(a)(1)(ii), 
29 CFR 2590.715-2719(a)(1)(ii), and 45 CFR 147.136(a)(1)(ii).
    \182\ 26 CFR 54.9815-2719(b)(2)(ii)(C), 29 CFR 2590.715-
2719(b)(2)(i) and (b)(2)(ii)(C), 45 CFR 147.136(b)(2)(i) and 
(b)(2)(ii)(C), and 29 CFR 2560.503-1(h)(2)(iii).
    \183\ 26 CFR 54.9812-1(d)(3), 29 CFR 2590.712(d)(3), and 45 CFR 
146.136(d)(3).
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    6. Currently, the minimum value rules under HHS and Treasury 
regulations at 45 CFR 156.145 and 26 CFR 1.36B-6, respectively, specify 
that an employer-sponsored plan provides minimum value only if the 
percentage of the total allowed costs of benefits provided under the 
plan is greater than or equal to 60 percent, and the benefits under the 
plan include substantial coverage of inpatient hospital services and 
physician services. Should HHS and Treasury consider amending the 
minimum value rule so that it would apply separately and independently 
to medical/surgical benefits, and to mental health and substance use 
disorder benefits? Should HHS and Treasury consider amending the 
minimum value rule to require substantial coverage of mental health and 
substance use disorder benefits? If so, how should ``substantial 
coverage'' be defined in that context?
    7. As HHS oversaw the transition to 988 as the new easy-to-remember 
3-digit code to access life-saving services through the Suicide & 
Crisis Lifeline, (https://www.samhsa.gov/find-help/988), there has been 
increased attention to current gaps in access to and provision of a 
full continuum of behavioral health crisis services. Final rules under 
MHPAEA do not specifically address mobile crisis services. Similarly, 
in the establishment of EHBs as part of required benefits for non-
grandfathered individual and small group coverage under the Affordable

[[Page 51599]]

Care Act, there is no specific reference to behavioral health crisis 
services as part of the EHB categories. The Departments are interested 
in determining if there are questions as to how these services fit 
within the existing categories for either MHPAEA, or the EHB 
categories. Are there aspects of community-based behavioral health 
crisis services that the Departments should address in the context of 
MHPAEA? Should the Departments ensure that community-based behavioral 
health crisis services are classified in the same way as particular 
medical/surgical services, and what are those particular services? 
Should crisis call/text/chat center services, mobile crisis and 
stabilization services be specifically included as EHBs? Are there ways 
the Departments can increase access to crisis services with current 
authorities, including in rural or underserved areas in which there are 
several challenges to accessing care? How can parity be strengthened 
across the behavioral health crisis services landscape, including in 
areas with shortages for behavioral health providers? How can the 
Departments collaborate with State and local agencies to improve access 
to existing and future behavioral health crisis services?

V. Regulatory Impact Analysis

A. Summary--Departments of Health and Human Services and Labor

    The Departments have examined the effects of these proposed rules 
as required by Executive Order 12866,\184\ Executive Order 13563,\185\ 
the Paperwork Reduction Act of 1995,\186\ the Regulatory Flexibility 
Act,\187\ section 202 of the Unfunded Mandates Reform Act of 1995,\188\ 
and Executive Order 13132.\189\
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    \184\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 
1993).
    \185\ Improving Regulation and Regulatory Review, 76 FR 3821 
(Jan. 18, 2011).
    \186\ 44 U.S.C. 3506(c)(2)(A) (1995).
    \187\ 5 U.S.C. 601 et seq. (1980).
    \188\ 2 U.S.C. 1501 et seq. (1995).
    \189\ Federalism, 64 FR 153 (Aug. 4, 1999).
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1.1. Executive Orders 12866 and 13563--Departments of Health and Human 
Services and Labor
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety effects; distributive impacts; and equity). Executive Order 
13563 emphasizes the importance of quantifying costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to review by the Office of Management and Budget (OMB). As 
amended by Executive Order 14094 \190\ entitled ``Modernizing 
Regulatory Review'' section 3(f) of the Executive order defines a 
``significant regulatory action'' as any regulatory action that is 
likely to result in a rule that may:
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    \190\ Executive Order 14094, 88 FR 21879 (Apr. 6, 2023).
---------------------------------------------------------------------------

    (1) have an annual effect on the economy of $200 million or more 
(adjusted every 3 years by the Administrator of the Office of 
Information and Regulatory Affairs (OIRA) for changes in gross domestic 
product); or adversely affect in a material way the economy, a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local, Territorial, or Tribal 
governments or communities;
    (2) create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) materially alter the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raise legal or policy issues for which centralized review would 
meaningfully further the President's priorities or the principles set 
forth in this Executive order, as specifically authorized in a timely 
manner by the Administrator of OIRA in each case.
    It has been determined that these proposed rules are significant 
within the meaning of section 3(f)(1) of the Executive order. 
Therefore, the Departments have provided an assessment of the potential 
costs, benefits, transfers, and alternatives associated with these 
proposed rules, and OMB has reviewed these proposed rules.
1.2. Introduction and Need for Regulations
    As explained in section I.A of this preamble, mental health is 
crucial to a person's overall wellbeing, and access to quality mental 
health and substance use disorder treatment is as essential for health 
as access to medical/surgical treatment. Moreover, failure to treat 
mental health issues can be costly. For example, depression is 
associated with increased risk of cardiovascular disease, diabetes, 
stroke, Alzheimer's disease, and osteoporosis, and an untreated 
substance use disorder may result in hospital emergency room care for a 
drug overdose.\191\ Individuals with mental health conditions or 
substance use disorders have faced stigma, discrimination, and other 
barriers inside and outside of the health care system, which can 
operate as impediments to seeking and obtaining treatment. In 2021, 
approximately 40 percent of adults 18 and older with a perceived unmet 
need for mental health services reported that they did not receive 
services because they could not afford the cost, almost 11 percent 
thought it may cause their community to have a negative opinion about 
them, almost 8 percent thought it might impact their job, and almost 12 
percent were concerned about confidentiality.\192\ Despite deterrents 
to seeking treatment, the need for these services has only increased, 
as a reported 41 percent of U.S. adults experienced high levels of 
psychological distress during the COVID-19 pandemic.\193\
---------------------------------------------------------------------------

    \191\ Government Accountability Office. ``Behavioral Health: 
Research on Health Care Costs of Untreated Conditions is Limited,'' 
GAO-19-274, February 2019.
    \192\ Substance Abuse and Mental Health Services Administration 
(SAMHSA), Center for Behavioral Health Statistics and Quality, 
National Survey on Drug Use and Health, 2021. Table 6.45B.
    \193\ Pasquini, Giancarlo, and Scott Keeter. Pews Research 
Center. ``At Least Four-in-Ten US Adults Have Faced High Levels of 
Psychological Distress During COVID-19 Pandemic.'' (2022).
---------------------------------------------------------------------------

    In 2013, the Departments issued final regulations to implement 
MHPAEA.\194\ The 2013 final regulations expanded upon MHPA 1996, which 
required parity in aggregate lifetime and annual dollar limits between 
mental health benefits and medical/surgical benefits. MHPAEA 
additionally applies the parity requirements to substance use disorder 
benefits and provides that the financial requirements (such as 
deductibles, copays, and coinsurance) and treatment limitations (such 
as day or visit limits) imposed on mental health or substance use 
disorder benefits cannot be more restrictive than the predominant 
financial requirements and treatment limitations that apply to 
substantially all medical/surgical benefits in a classification. MHPAEA 
also prohibits separate treatment limitations that apply only to mental 
health and substance use disorder benefits.
---------------------------------------------------------------------------

    \194\ 78 FR 68240 (Nov. 13, 2013).
---------------------------------------------------------------------------

    Since 2013, the Departments have provided extensive guidance and 
compliance assistance materials to the regulated community, State 
regulators, and other interested parties and conducted regular outreach 
initiatives to facilitate the implementation and enforcement of MHPAEA. 
The Departments also issued reports to

[[Page 51600]]

Congress highlighting this work. In addition, Congress has enacted 
several laws that build on MHPAEA, including the Cures Act, the SUPPORT 
for Patient and Communities Act (SUPPORT Act),\195\ and most recently, 
the CAA, 2021 and 2023.
---------------------------------------------------------------------------

    \195\ Public Law 115-271, 132 Stat. 3894 (Oct. 24, 2018). The 
SUPPORT Act requires that Children's Health Insurance Program (CHIP) 
plans must cover mental health and substance use disorder services. 
Financial requirements and treatment limitations applicable to such 
services shall not differ from those applicable to other medical 
services under CHIP.
---------------------------------------------------------------------------

    Prior to the CAA, 2021, while group health plans and health 
insurance issuers were prohibited from imposing NQTLs on mental health 
and substance use disorder benefits that did not comply with MHPAEA and 
its implementing regulations, there was no statutory requirement that 
plans or issuers demonstrate their compliance. Under the CAA, 2021, 
group health plans and health insurance issuers are now required to 
perform and document comparative analyses of the NQTLs they impose on 
mental health and substance use disorder benefits and to provide those 
analyses to the Departments or to an applicable State authority, as 
applicable, upon request. The CAA, 2021 compels the Departments to 
request not fewer than 20 such analyses per year. In addition, the CAA, 
2021 imposes steps that the Departments, after reviewing a comparative 
analysis, must take following an initial determination that the plan's 
or issuer's NQTL comparative analysis does not comply with MHPAEA. The 
Departments are also required to report to Congress annually on the 
results of their review of the requested NQTL comparative analyses.
    As documented in the 2022 MHPAEA Report to Congress,\196\ the 
Departments found that none of the NQTL comparative analyses they 
reviewed contained sufficient information and documentation from plans 
and issuers upon initial receipt. Moreover, despite plans' longstanding 
obligations under MHPAEA, it was apparent that many plans and issuers 
had not carefully designed and implemented their NQTLs to be compliant 
with MHPAEA prior to the enactment of CAA, 2021. Consequently, many of 
the comparative analyses appeared to be focused on finding after-the-
fact rationales for decisions and designs involving NQTLs rather than 
reflecting proper attention to MHPAEA compliance in the first place. 
Similarly, many of the plans and issuers appeared to generate their 
analyses for the first time in response to the Departments' requests, 
rather than in advance, as required by law and as a critical part of 
the design and application of a MHPAEA-compliant NQTL. The 2023 MHPAEA 
Report to Congress notes that nearly all the comparative analyses 
reviewed by the Departments during the relevant time period contained 
insufficient information upon initial receipt and identifies common 
deficiencies in the comparative analyses prepared by plans and 
issuers.\197\
---------------------------------------------------------------------------

    \196\ Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
    \197\ 2023 MHPAEA Report to Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    The Departments have made an unprecedented commitment to expand 
their efforts to ensure parity in access to mental health and substance 
use disorder treatment, guarantee that individuals with mental health 
conditions and substance use disorders benefit from the full 
protections required by law, and intend to provide additional guidance 
to interested parties to facilitate compliance with MHPAEA by issuing 
these proposed rules.
    The proposed amendments to the existing MHPAEA regulations would 
clarify existing definitions and add new definitions of key terms, 
clarify the way the parity requirements apply to NQTLs, and provide 
additional examples of the application of MHPAEA to NQTLs to improve 
the understanding and ability of the regulated community to comply with 
MHPAEA. The proposed amendments would also clarify that the way a plan 
or issuer defines mental health conditions and substance use disorders 
for purposes of MHPAEA must be consistent with generally recognized 
independent standards of current medical practice and would add more 
specificity as to what conditions or disorders plans and issuers must 
treat as mental health conditions and substance use disorders.
    These proposed rules would also add new regulations that would set 
forth more specific content requirements for comparative analyses 
required by the CAA, 2021, and outline the process for plans and 
issuers to provide their comparative analyses to the Departments or an 
applicable State authority upon request. These proposed rules would 
also require plans and issuers to collect and evaluate relevant data, 
including but not limited to claims denials, as well as any other data 
relevant to NQTLs as required by State law or private accreditation 
standards. Additionally, for NQTLs related to network composition, 
these proposed rules would require additional data, including, but not 
limited to, in-network and out-of-network utilization rates (including 
data related to provider claim submissions), network adequacy metrics 
(including time and distance data, and data on providers accepting new 
patients), and provider reimbursement rates (including as compared to 
billed charges). Under these proposed rules, plans and issuers must 
collect and evaluate these data while conducting their comparative 
analyses, regardless of whether the Departments have requested the 
analyses. As indicated in section I.A.3.d of this preamble, the type, 
form, and manner for these data requirements may be further defined in 
guidance, to allow the Departments to provide more detail and adjust 
the data requirements as needed to account for enforcement experience 
and industry trends. Additionally, in these proposed rules, HHS 
proposes regulatory amendments to implement a provision in the CAA, 
2023 that sunsets the election option for self-funded, non-Federal 
governmental plans to opt out of requirements under MHPAEA.
    The Departments have been particularly concerned with barriers to 
access for individuals seeking mental health or substance use disorder 
treatments. A 2022 Harris Poll sponsored by the National Council for 
Mental Wellbeing found that 21 percent of adults with unmet mental 
health care needs in the past year and 28 percent of those with unmet 
substance use care needs in the past year reported their inability to 
get an appointment immediately prevented them from getting needed 
care.\198\ While up to 70 percent of all primary care visits include a 
behavioral health component,\199\ research suggests that primary care 
providers face significant barriers to delivering these services, 
including insufficient resources, inadequate related knowledge, and a 
lack of time.\200\ In seeking out specialists,

[[Page 51601]]

individuals tend to face less adequate mental health provider networks 
than medical/surgical provider networks through their plan or coverage. 
According to a 2021 study, which compared the experiences of patients 
using out-of-network mental health and out-of-network medical/surgical 
providers, patients who were receiving mental health treatment only 
from a mental health practitioner rated their plan's mental health 
provider network as inadequate more frequently than their plan's 
medical/surgical provider network.\201\ The study noted that specialty 
mental health practitioners are more likely to opt out of participation 
in mental health provider networks due to a growing workforce shortage 
of mental health providers, a high demand for mental health services, 
and low reimbursements for mental health services compared with other 
specialties, which has consequentially resulted in higher out-of-
network utilization rates for mental health care services. In response 
to these concerns, the Technical Release that is being issued 
concurrently with these proposed rules would set out principles and 
seek public comment to inform guidance with respect to required data 
submissions for NQTLs related to network composition and a potential 
time-limited enforcement safe harbor.
---------------------------------------------------------------------------

    \198\ National Council for Mental Wellbeing. ``2022 Access to 
Care Survey Results,'' May 11, 2022. https://www.thenationalcouncil.org/wp-content/uploads/2022/05/2022-Access-To-Care-Survey-Results.pdf.
    \199\ Health Affairs. ``Combating a Crisis by Integrating Mental 
Health Services and Primary Care,'' Health Affairs Forefront, July 
8, 2022, available at https://www.healthaffairs.org/do/10.1377/forefront.20220706.603540.
    \200\ Loeb, Danielle F., Elizabeth A. Bayliss, Ingrid A. 
Binswanger, Carey Candrian, and Frank V. Degruy. ``Primary Care 
Physician Perceptions on Caring for Complex Patients with Medical 
and Mental Illness.'' Journal of General Internal Medicine 27 
(2012): 945-952. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3403152/; Poghosyan L, Norful AA, Ghaffari A, George M, Chhabra 
S, Olfson M. ``Mental Health Delivery in Primary Care: The 
Perspectives of Primary Care Providers.'' Archives of Psychiatric 
Nursing 2019 Oct; 33(5):63-67. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7077950/.
    \201\ Busch, Susan H., and Kelly Kyanko. ``Assessment of 
Perceptions of Mental Health vs Medical Health Plan Networks Among 
US Adults with Private Insurance.'' JAMA Network Open 4, no. 10 
(2021).
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    The Departments have already seen some promising results in 
response to their reviews of plans' and issuers' comparative analyses 
under the requirements of the CAA, 2021, including the removal of some 
exclusions related to treatment for opioid use disorder with methadone 
(which must be provided through an opioid treatment program) and ABA 
therapy, as well as the removal of unnecessary gatekeepers for 
treatment, such as requiring referrals for appointments and pre-
authorization for outpatient services, improving direct access for 
mental health and substance use disorder benefits. The Departments 
expect that these proposed rules would expand upon these successes as 
they would provide plans and issuers with a better understanding of the 
requirements of MHPAEA with respect to NQTLs and improve how they 
measure, compare, and demonstrate parity, while clarifying appropriate 
ways for plans and issuers to modify their policies and procedures to 
meet parity requirements. The Departments believe these proposed rules 
and any additional guidance would help plans and issuers comply with 
these proposed requirements, resulting in improved access to and 
coverage of mental health and substance use disorders, as intended by 
MHPAEA.
1.3. Baseline
    The baseline for this analysis includes the MHPAEA statute, as 
amended, implementing regulations, and subsequent guidance. Benefits, 
costs, and transfers are measured as changes from the baseline under 
these proposed rules. For example, the CAA, 2021 requires that plans 
and issuers perform and document NQTL comparative analyses. Starting 45 
days after the enactment of the CAA, 2021, plans and issuers are 
required to make their comparative analyses available to the 
Departments or an applicable State authority upon request. Plans and 
issuers are required to make comparative analyses and other applicable 
information required by the CAA, 2021 available to participants and 
beneficiaries in plans subject to ERISA upon request and to make this 
information available to participants, beneficiaries, and enrollees in 
all non-grandfathered group health plans and non-grandfathered group or 
individual health insurance coverage upon request in connection with an 
adverse benefit determination.\202\ This regulatory impact analysis 
(RIA) therefore does not include benefits or costs for performing and 
making available the comparative analyses, as these are already 
required by the provisions of the CAA, 2021 and are in the baseline, 
but does take into account the expected impacts of these proposed rules 
on the preparation of plans' and issuers' comparative analyses and how 
these proposed rules would impact parity and, in turn, access for 
participants and beneficiaries needing mental health and substance use 
disorder treatments.
---------------------------------------------------------------------------

    \202\ FAQs Part 45, Q6.
---------------------------------------------------------------------------

    Similarly, existing guidance that has already generated benefits 
and costs is not accounted for here. Rather, only those changes 
resulting from these proposed rules are captured in this analysis.
1.4. Summary of Impacts
    These proposed rules propose to define certain terms associated 
with MHPAEA's requirements for NQTLs and provide that a group health 
plan (or health insurance issuer offering coverage in connection with a 
group health plan) may not apply any NQTL to mental health or substance 
use disorder benefits in any classification that is more restrictive, 
as written or in operation, than the predominant NQTL that applies to 
substantially all medical/surgical benefits in the same classification. 
These proposed rules would require that plans and issuers determine the 
portion of plan payments for medical/surgical benefits subject to an 
NQTL based on the dollar amount of all plan payments for medical/
surgical benefits in the classification expected to be paid under the 
plan or coverage for the plan year (or the portion of the plan year 
after a change in benefits that affects the applicability of the NQTL). 
Plans and issuers would next be required to determine whether the NQTL 
applies to substantially all medical/surgical benefits in the 
classification based on the portion of plan payments for medical/
surgical benefits subject to the NQTL to determine whether the NQTL 
applies to at least two-thirds of all medical/surgical benefits in that 
classification. Plans and issuers would then need to determine which 
variation of a given NQTL is predominant (that is, the most common or 
frequent variation). Once this is determined, plans and issuers may not 
apply any NQTL to mental health or substance use disorder benefits in 
any classification that is more restrictive, as written or in 
operation, than the predominant NQTL applicable to substantially all 
medical/surgical benefits in the same classification. An NQTL is 
restrictive if it imposes conditions, terms, or requirements that limit 
access to benefits under the terms of the plan or coverage.
    These proposed rules also set data requirements and clarify proper 
documentation of NQTL comparative analyses, which plans and issuers 
have struggled with, as detailed in the Departments' 2022 Report to 
Congress \203\ and the 2023 Report to Congress,\204\ released 
contemporaneously with these proposed rules. Accordingly, the 
Departments are of the view that these proposed rules would increase 
plan and issuer compliance with the requirements for imposing NQTLs 
under MHPAEA,

[[Page 51602]]

which would in turn expand access to mental health and substance use 
disorder benefits and help ensure that limitations on mental health and 
substance use disorder benefits are no more restrictive than the 
predominant limitations applicable to substantially all medical/
surgical benefits in the same classification. In doing so, access to 
in-network medically necessary treatments would increase for a 
significant segment of individuals whose health coverage would be 
affected by these proposed rules,\205\ which would ultimately result in 
better mental health outcomes and lower out-of-pocket costs related to 
mental health and substance use disorder benefits for participants, 
beneficiaries, and enrollees.
---------------------------------------------------------------------------

    \203\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
    \204\ 2023 MHPAEA Report to Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
    \205\ Wen, Hefei, Janet R. Cummings, Jason M. Hockenberry, Laura 
M. Gaydos, and Benjamin G. Druss. ``State Parity Laws and Access to 
Treatment for Substance Use Disorder in the United States: 
Implications for Federal Parity Legislation.'' JAMA Psychiatry 70, 
no. 12 (2013): 1355-1362.
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    Plans and issuers would incur costs to comply with the requirements 
in these proposed rules. However, the Departments have determined that 
the benefits of these proposed rules justify the costs. In accordance 
with OMB Circular A-4, Table 1 depicts an accounting statement 
summarizing the Departments' assessment of the benefits, costs, and 
transfers associated with these regulatory actions. The Departments are 
unable to quantify all benefits, costs, and transfers of these proposed 
rules, but have sought, where possible, to describe these non-
quantified impacts.
    The effects in Table 1 reflect non-quantified impacts and estimated 
direct monetary costs resulting from the provisions of these proposed 
rules.

                                          Table 1--Accounting Statement
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Benefits:
     Better understanding of and compliance with MHPAEA by plans and issuers............................
     Better health outcomes for those with mental health conditions or substance use disorders, and a
     reduction in the negative impacts on families, friends, and coworkers of those with untreated or poorly
     managed mental health conditions or substance use disorders based on their improved access to treatment....
     Better frameworks for determining whether plans and issuers are making decisions and taking actions
     with respect to mental health and substance use disorder benefits in parity with their decisions and
     actions regarding medical/surgical benefits................................................................
----------------------------------------------------------------------------------------------------------------
Costs:
     Costs to plans and issuers to implement changes associated with the revision of plan provisions....
     Increased costs to plans and issuers from expanded coverage and utilization of mental health and
     substance use disorder services............................................................................
     Costs to plans and issuers from collecting and analyzing data and documenting NQTL comparative
     analyses consistent with the requirements of these proposed rules of approximately $291.0 million in the
     first year and approximately $117.6 million in subsequent years or between 0.04 percent and 0.01 percent of
     health insurance premiums..................................................................................
     Costs to plans and issuers for preparing and mailing the comparative analyses to participants,
     beneficiaries, and enrollees of approximately $12.1 million annually.......................................
     One-time regulatory review costs to plans and issuers of approximately $64.3 million...............
     Potential increase in cost-sharing requirements and/or treatment limitations for medical/surgical
     care for participants, beneficiaries, and enrollees, if plans and issuers try to achieve parity by imposing
     new restrictions on medical/surgical coverage, rather than by reducing restrictions on access to mental
     health or substance use disorder benefits..................................................................
     Potential costs to self-funded, non-Federal governmental plans that currently opt out of MHPAEA to
     come into compliance with requirements under MHPAEA........................................................
     Cost savings to self-funded, non-Federal governmental plans of approximately $11,351 in total from
     no longer having to send opt-out notices regarding a plan's MHPAEA opt-out election........................
     Cost savings for the Federal Government of approximately $2,469 from fewer opt-out notices being
     submitted by self-funded, non-Federal governmental plans...................................................
----------------------------------------------------------------------------------------------------------------
Costs                                                   Estimate     Year dollar   Discount rate          Period
                                                                                       (percent)         covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized............................         $161.29            2023               7       2023-2032
----------------------------------------------------------------------------------------------------------------
($million/Year).................................          156.71            2023               3       2023-2032
Transfers:
     Potential transfers from plans and issuers to participants, beneficiaries, and enrollees resulting
     in lower out-of-pocket spending on mental health and substance use disorder services.......................
     Potential transfers from participants, beneficiaries, and enrollees to plans and issuers caused by
     higher premiums associated with lower cost-sharing requirements, increased utilization of mental health and
     substance use disorder services, provider network improvements, and increased provider reimbursement rates.
     Potential transfers from primary care providers to mental health providers for the treatment of
     mental health and substance use disorders as a result of decisions by participants, beneficiaries, and
     enrollees to obtain treatment from a specialist instead of a primary care provider.........................
----------------------------------------------------------------------------------------------------------------


[[Page 51603]]

1.5. Affected Entities
1.5.1. Plans
    Employers with 50 or more employees are required to comply with 
MHPAEA. Employers with less than 50 employees are required to comply 
with MHPAEA as part of the EHB requirements of the Affordable Care Act. 
In this analysis, plan size is used as a proxy for employer size to 
determine if a plan is affected. The Departments estimate that 
1,488,000 fully-insured, non-grandfathered plans with less than 50 
participants and approximately 409,800 ERISA-covered group health plans 
with 50 or more participants, of which approximately 250,000 are self-
insured group health plans, would be affected by these proposed 
rules.\206\ In addition, the Departments estimate that these proposed 
rules would affect approximately 90,100 non-Federal governmental health 
plans,\207\ of which approximately 14,400 are plans with 50 or more 
participants.\208\ The Departments seek comment on these estimates.
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    \206\ Employers with less than 50 employees are required to 
comply with MHPAEA as part of the EHB requirements of the ACA. The 
Departments estimate that there are 2,134,934 ERISA-covered group 
health plans with less than 50 participants based on data from the 
2021 Medical Expenditure Panel Survey--Insurance Component and the 
2019 County Business Patterns from the Census Bureau. The 
Departments also estimate that 83 percent of group health plans with 
less than 50 participants are fully insured based on data from the 
2021 Medical Expenditure Panel Survey Insurance Component (MEPS-IC) 
and the 2019 County Business Patterns from the Census Bureau. The 
2020 Kaiser Employer Health Benefits Survey reported that in 2020, 
16 percent of firms offering health benefits offered at least one 
grandfathered health plan (Kaiser Employer Health Benefits Survey 
(Source: KFF. 2020 Kaiser Employer Health Benefits Survey. https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf)). Thus, the Departments have calculated the 
number of fully insured, non-grandfathered plans with less than 50 
participants in the following manner: 2,134,934 small ERISA-covered 
group health plans x 83% x (100% minus 16%) = 1,488,476. MHPAEA only 
applies to ERISA plans in the group market with 50 or more 
participants that offer mental health or substance use disorder 
benefits. The Departments have not identified what share of plans 
with 50 or more participants offer mental health or substance use 
disorder benefits and so has assumed that all of these plans offer 
them. Based on the 2021 MEPS-IC and the 2019 County Business 
Patterns from the Census Bureau, the Departments estimate 61 percent 
of ERISA-covered group health plans with 50 or more participants are 
self-insured. Thus, the Departments calculate the number of self-
insured group health plans in the following manner: 409,822 ERISA-
covered group health plans with 50 or more participants x 61% = 
249,991.
    \207\ Based on the 2017 Census of Governments, there are 90,126 
State and local entities. The Departments assume there is one plan 
per entity on average. Therefore, the Departments estimate that 
there are 90,126 non-Federal governmental health plans.
    \208\ MHPAEA applies to non-Federal governmental employers with 
50 or more employees that offer mental health or substance use 
disorder benefits. The Departments have not identified what share of 
non-Federal governmental plans with 50 or more participants offer 
mental health or substance use disorder benefits and so have assumed 
that all of these plans offer them. Using data from the 2021 Medical 
Expenditure Panel Survey Insurance Component (MEPS-IC) and the 2019 
County Business Patterns from the Census Bureau, the Departments 
estimates that 16 percent of ERISA-covered group health plans have 
50 or more participants. The Departments use the percent of ERISA-
covered group plans with 50 or more participants as a proxy for the 
percent of non-Federal governmental plans with 50 or more 
participants. Therefore, the Departments estimate that there are 
14,420 public, non-Federal employer group health plans with 50 or 
more participants that offer mental health or substance use disorder 
benefits. (90,126 non-Federal governmental health plans x 16 percent 
of plans with 50 or more employees = 14,420).
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    HHS estimates that 230 self-funded, non-Federal governmental plans 
would be affected by the implementation of the CAA, 2023 provision that 
sunsets the MHPAEA opt-out election.\209\ HHS is aware of at least four 
plans with collective bargaining agreements whose sponsors' MHPAEA opt-
out elections could be in effect beyond 2024. However, other plans 
might be similarly situated. HHS does not have precise information 
about the number of participants and beneficiaries of the plans that 
have elected to opt out of requirements under MHPAEA, as those plans 
are not required to report this information to HHS. However, HHS 
estimates that there are approximately 253 participants, on average, in 
each self-funded, non-Federal governmental plan.\210\ HHS also 
estimates that there is one beneficiary for each plan participant on 
average. Therefore, approximately 116,500 participants and 
beneficiaries would be affected by this proposed provision.\211\ HHS 
seeks comments on the estimated number of self-funded, non-Federal 
governmental plans and the estimated number of plan participants and 
beneficiaries that would be affected by the implementation of the CAA, 
2023 provision that sunsets the MHPAEA opt-out election.
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    \209\ Based on the HIPAA opt-out elections for self-funded, non-
Federal governmental plans, as of January 6, 2023. Available at 
https://www.cms.gov/files/document/hipaaoptouts03182021.pdf.
    \210\ According to data from the Medical Expenditure Panel 
Survey--Insurance Component (2021) (available at: https://meps.ahrq.gov/mepsweb/https://meps.ahrq.gov/mepsweb/), there are 
18,828,246 State and local government employees, and 69.1 percent of 
these employees (13,010,318) are enrolled in health coverage through 
their jobs. Of these employees, 64.4 percent (8,378,645 employees) 
are participants in self-funded plans. Based on data from the 2017 
Census of Governments (available at: https://www.census.gov/data/tables/2017/econ/gus/2017-governments.html), there are 90,126 State 
and local government entities, and according to the Medical 
Expenditure Panel Survey (2021), 36.7 percent, or 33,076, of State 
and local government entities self-fund at least one plan. 
Therefore, the average number of participants per self-funded, non-
Federal governmental plan is (8,378,645/33,076) 253.3. Since HHS 
also estimates that there is 1 beneficiary for each plan participant 
on average, the average number of participants and beneficiaries per 
self-funded non-Federal governmental plan is (253.3 x 2) 506.6.
    \211\ 230 self-funded, non-Federal governmental plans that have 
elected to opt out of the requirements under MHPAEA x approximately 
506.6 participants and beneficiaries for each self-funded, non-
Federal governmental plan on average = 116,500.
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1.5.2. Participants, Beneficiaries, and Enrollees Receiving Mental 
Health and Substance Use Disorder Treatment
    There are approximately 55,403,000 participants and 47,990,000 
beneficiaries in ERISA-covered group health plans with 50 or more 
participants,\212\ approximately 17,841,000 participants and 15,198,000 
beneficiaries in non-Federal governmental plans with 50 or more 
participants,\213\ an estimated 11,187,000 participants and 10,914,000 
beneficiaries in ERISA covered, non-grandfathered, fully insured health 
plans with less than 50 participants,\214\ and approximately 11,000,000 
individual health insurance coverage

[[Page 51604]]

policyholders (with approximately 15,000,000 total enrollees).\215\
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    \212\ Employers with 50 or more employees are required to comply 
with MHPAEA. Employers with less than 50 employees are required to 
comply with MHPAEA as part of the EHB requirements of the Affordable 
Care Act. The Departments have not identified what share of plans 
with 50 or more participants offer mental health or substance use 
disorder benefits and so has assumed that all of these plans offer 
them. The Departments estimate that there are 55,402,568 
participants in ERISA-covered group health plans with 50 or more 
participants. Estimates are based off Department tabulations of the 
March 2021 Current Population Survey (CPS) Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data.
    \213\ MHPAEA only applies to non-Federal governmental health 
plans with 50 or more participants that offer mental health or 
substance use disorder benefits. The Departments have not identified 
what share of plans with 50 or more participants offer mental health 
or substance use disorder benefits and so has assumed that all of 
these plans offer them. The Departments estimate that there are 
17,840,590 participants in non-Federal governmental health plans 
with 50 or more participants. Estimates are based on Department 
tabulations of the March 2021 CPS Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data.
    \214\ The Departments estimate that there are 26,311,273 
participants and beneficiaries in fully insured, private-sector 
health plans with less than 50 participants based off Department 
tabulations of the March 2021 CPS Auxiliary Data. https://www.dol.gov/agencies/ebsa/researchers/data/auxiliary-data. Assuming, 
based on Kaiser Family Foundation (KFF) assumptions that 84 percent 
of participant and beneficiaries are in non-grandfathered plans 
(Source: KFF. 2020 KFF Employer Health Benefits Survey. https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf), this would translate into an estimated 
22,101,470 participants and beneficiaries in fully-insured, private-
sector, non-grandfathered plans with less than 50 participants.
    \215\ Based on medical loss ratio reports submitted by issuers 
for the 2021 reporting year, the number of policyholders in 
individual health insurance coverage offered in the individual 
market is approximately 11 million, and the number of enrollees was 
approximately 15,000,000. https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
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    The receipt of behavioral health services has been increasing since 
the enactment of MHPAEA. Between 2007 and 2017, private insurance claim 
lines for behavioral health diagnoses increased by 320 percent.\216\ 
Claims data show that between 2013 and 2019, the percentage of the 
employment-based coverage population under the age of 65 diagnosed with 
major depressive disorder increased from 4.1 percent to 5.3 percent, 
and the percentage of the population diagnosed with anxiety increased 
from 4.8 percent to 8.1 percent.\217\ In 2020, 41 million Americans 
enrolled in employment-based coverage, including 6 million children, 
received mental health support, which constituted nearly 25 percent of 
employment-based health plan participants and beneficiaries.\218\ A 
2021 survey by the Substance Abuse and Mental Health Services 
Administration (SAMHSA) indicated that among adults aged 18 or older, 
22.8 percent (or 57.8 million people) had any mental illness and 5.5 
percent (or 14.1 million people) had serious mental illness in the past 
year.\219\
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    \216\ Gelburd, Robin. ``The Mental Health Parity Act: 10 Years 
Later.'' American Journal of Managed Care (Nov. 22, 2018). https://www.ajmc.com/view/the-mental-health-parity-act-10-years-later.
    \217\ Fronstin, Paul and Christopher Roebuck. ``How Do High-
Deductible Health Plans Affect Use of Health Care Services and 
Spending Among Enrollees with Mental Health Disorders?'' EBRI Issue. 
No. 555, Figure 3. (March 10, 2022) Available at https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_555_mentalhealth-10mar22.pdf?sfvrsn=aec3b2f_2.
    \218\ America's Health Insurance Plans. ``How Employer-Provided 
Coverage Improves Access to Mental Health Support,'' May 2022. 
https://www.ahip.org/documents/202205-CaW_MentalHealth-v03.pdf.
    \219\ SAMHSA. ``Key Substance Use and Mental Health Indicators 
in the United States: Results from the 2021 National Survey on Drug 
Use and Health.'' pp. 39-40. https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHFFRRev010323.pdf.
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    The COVID-19 PHE has exacerbated the need for mental health and 
substance use disorder treatment. During the pandemic, many adults 
consistently reported anxiety and depressive disorders symptoms, with 4 
in 10 adults reporting symptoms in February 2021. Two years later, even 
as the pandemic receded from its peak, approximately 3 in 10 adults 
were still reporting symptoms of anxiety and depression.\220\ A 2021 
study also found that a COVID-19 diagnosis increased the incidence of a 
psychiatric diagnosis within the following 14 to 90 days. Specifically, 
the study found that approximately 20 percent of adults who received a 
COVID-19 diagnosis, including adults with and without a past 
psychiatric diagnosis, were later diagnosed with a mental health 
disorder.\221\
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    \220\ Panchal, Nirmita, Heather Saunders, Robin Rudowitz, and 
Cynthia Cox. ``The Implications of COVID-19 for Mental Health and 
Substance Use,'' KFF Issue Brief March 20, 2023. https://www.kff.org/coronavirus-covid-19/issue-brief/the-implications-of-covid-19-for-mental-health-and-substance-use/.
    \221\ Taquet, Maxime, Sierra Luciano, John R. Geddes, and Paul 
J. Harrison. ``Bidirectional Associations Between COVID-19 and 
Psychiatric Disorder: Retrospective Cohort Studies Of 62,354 COVID-
19 Cases in the USA.'' The Lancet Psychiatry 8, no. 2 (2021): 130-
140.
---------------------------------------------------------------------------

    The pandemic may have long-term effects on mental health and 
substance use disorders. A 2022 study examined the chronic effects of 
the pandemic on the mental health of veterans and found that COVID-19 
survivors were associated with a higher risk of developing mental 
health disorders, including anxiety, stress, depression, substance use, 
and neurocognitive decline, compared to individuals who did not have 
COVID-19.\222\ Another 2022 study examined the mental health outcomes 
of COVID-19 survivors during the twelve months following their 
infection and found that COVID-19 survivors reported a high prevalence 
of depression, anxiety, and PTSD at both the six- and twelve-months 
follow-up, indicating that the pandemic has long-term adverse mental 
health impacts on COVID-19 survivors.\223\ Finally, a 2023 study found 
that the pandemic resulted in a long-term increase in the number of 
psychiatric inpatient admissions, suggesting that there is a post-
pandemic need to prioritize psychiatric care.\224\
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    \222\ Xie, Yan, Evan Xu, and Ziyad Al-Aly. ``Risks of Mental 
Health Outcomes in People with Covid-19: Cohort Study.'' The BMJ 376 
(2022), available at https://www.bmj.com/content/376/bmj-2021-068993.
    \223\ Mazza, Mario Gennaro, Mariagrazia Palladini, Rebecca De 
Lorenzo, Beatrice Bravi, Sara Poletti, Roberto Furlan, Fabio Ciceri 
et al. ``One-Year Mental Health Outcomes in a Cohort of COVID-19 
Survivors.'' Journal of Psychiatric Research 145 (2022): 118-124.
    \224\ Warwicker, Sean, Denise Sant, Adrian Richard, Jake 
Cutajar, Annalise Bellizzi, Gertrude Micallef, Daniel Refalo, 
Liberato Camilleri, and Anton Grech. ``A Retrospective Longitudinal 
Analysis of Mental Health Admissions: Measuring the Fallout of the 
Pandemic.'' International Journal of Environmental Research and 
Public Health 20, no. 2 (2023): 1194.
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1.5.3. Issuers and TPAs
    The Departments estimate that these proposed rules would affect 476 
health insurance issuers that provide benefits in the group and 
individual health insurance markets, with 1,500 issuer/State 
combinations.\225\ There are an estimated 205 TPAs that provide 
services to health plans.\226\ Finally, the Departments estimate that 
these proposed rules would affect at least 40 managed behavioral 
healthcare organizations providing mental health and substance use 
disorder benefits to group health plans.\227\
---------------------------------------------------------------------------

    \225\ The Departments' estimate of the number of health 
insurance insurers and the number of issuer/State combinations is 
based on medical loss ratio reports submitted by issuers for the 
2021 reporting year. (Source: Centers for Medicare & Medicaid 
Services. ``Medical Loss Ratio Data and System Resources'' (2021). 
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.)
    \226\ Non-issuer TPAs based on data derived from the 2016 
benefit year reinsurance program contributions.
    \227\ The Departments' estimate of the number of insurers is 
based on industry trade association membership, including the 
National Behavioral Consortium (https://www.nbcgroup.org/member-directory/) and the Association for Behavioral Health and Wellness 
(https://abhw.org/about/). Please note that these estimates could 
undercount small State-regulated insurers.
---------------------------------------------------------------------------

    Issuers and TPAs provide key support for plan compliance with laws 
and regulations, including MHPAEA. The Departments' understanding, 
based on discussions with the regulated community and numerous direct 
investigations of plans, specifically the review of comparative 
analyses, is that issuers of fully insured health plans provide a menu 
of coverage designs from which interested parties select their 
coverage. The issuers, as the designers of the products and, commonly, 
the claims administrators, make decisions about what NQTLs to use and 
how to implement them. Issuers, along with TPAs, are also typically the 
owners of claims and other data related to plan administration.
    Even for plans that self-insure, it is common practice to have 
issuers and TPAs provide expertise in plan design, administer the 
claims and networks, and drive compliance (or non-compliance) with 
MHPAEA. Self-insured plans rarely build independent provider networks 
and instead rely on those built by issuers and TPAs. According to the 
2019 KFF Employer Benefits Survey, only 8 percent of large, self-
insured plans with 200 or more employees reported that they directly 
contracted with hospitals and health systems, independent of the plan's 
TPA, in order to provide health care and services separate from the 
provider networks included in the plan network.\228\ The Departments 
analyzed

[[Page 51605]]

2020 Form 5500 Schedule C (Service Provider Information) filings of 
self-insured health plans and determined that 89 percent of those plans 
indicated that they contracted with a TPA.\229\ This statistic provides 
the Departments with an estimate for the percent of self-insured plans 
that could perform the work for themselves.
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    \228\ KFF. ``KFF Employer Health Benefits Survey, 2019.'' 
(September 25, 2019) Table 14.15. See https://www.kff.org/report-section/ehbs-2019-section-14-employer-practices-and-health-plan-networks/.
    \229\ Because many plans are exempt from filing a Form 5500, the 
Department only identified 37,934 self-insured health plan filings 
for 2020. Of these, only 5,537 plans (or roughly 15 percent) 
attached a Schedule C. Of those plans, 4,920 (or roughly 89 percent) 
indicated they paid compensation, either directly or indirectly, of 
at least $5,000 for either claims processing, contract 
administration, or both.
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    Issuers and TPAs are therefore the ones mostly likely, and the ones 
the Departments have overwhelmingly observed, performing the work to 
evaluate NQTLs and provide the comparative analysis and required data. 
These proposed rules are expected to continue this trend of issuers and 
TPAs performing the required work for plans. While plans could be 
charged for these services, this arrangement provides for economies of 
scale in compliance as issuers evaluate NQTLs, produce or assist in 
producing the comparative analyses for their products and, in 
combination with TPAs, provide support for other requirements. Because 
TPAs and insurance companies providing administrative services only 
(ASO) overwhelmingly design the plans, administer the networks, manage 
claims, provide plan services, maintain and hold the data relevant to 
the comparative analyses, and drive MHPAEA compliance, they are in the 
best position to conduct comparative analyses, and to provide the 
analyses in an efficient and cost-effective manner. The Departments 
expect, as reflected in their own direct observations of the 
comparative analyses process, that TPAs and issuers would perform most 
of the work associated with the analyses because they can do so at the 
lowest cost and greatest scale. Particularly for self-insured plans, 
however, there may be some additional work required by individual plans 
to complete the comparative analysis prepared by the issuer to address 
unique plan issues. The Departments seek comments on these 
observations.
1.6. Benefits
    The Departments expect that these proposed rules, if finalized, 
would improve the quality of the comparative analyses conducted by 
plans and issuers, as required by the CAA, 2021, help plans and issuers 
better understand and fulfill their obligations under MHPAEA, and 
promote greater transparency regarding discrepancies between mental 
health and substance use disorder benefits and medical/surgical 
benefits. By specifying more details on how to perform and document 
their NQTL comparative analyses, these proposed rules would increase 
plan and issuer compliance with the requirements for imposing NQTLs 
under MHPAEA, and by doing so, increase access to mental health and 
substance use disorder services. Thus, these proposed rules would 
generate the following economic and societal benefits for participants, 
beneficiaries, and enrollees:
     better understanding of and compliance with MHPAEA by 
plans and issuers,
     greater access to mental health and substance use disorder 
services,
     better health outcomes among those with mental health 
conditions or substance use disorders,
     reduced adverse impacts on the families, friends, and 
coworkers of people who suffer from untreated or poorly managed mental 
health conditions or substance use disorders, and
     better frameworks for the Departments, plans, and issuers 
to determine whether plans' and issuers' decisions and actions with 
respect to mental health and substance use disorder treatments are in 
parity with their decisions and actions regarding medical/surgical 
treatments.
    This analysis provides a mainly qualitative discussion of the 
benefits associated with the proposed amendments to the existing MHPAEA 
regulations, as the Departments do not have the data necessary to 
quantify the likely benefits associated with ensuring that NQTLs for 
mental health and substance use disorder benefits are in parity with 
medical/surgical benefits. Similarly, this analysis provides a 
qualitative discussion of the benefits of these proposed rules and 
discusses how the proposed additional guidance would result in better 
compliance with the rules related to NQTLs and access to mental health 
and substance use disorder benefits. The Departments invite comments 
and data related to how it might quantify these benefits as part of 
these proposed rules.
1.6.1. Better Understanding of and Compliance With MHPAEA by Plans and 
Issuers
    By placing renewed focus on the elimination of more restrictive 
barriers to access mental health and substance use disorder benefits, 
standardizing the definitions associated with parity calculations for 
mental health and substance use disorder benefits and medical/surgical 
benefits, providing examples of the application of MHPAEA to NQTLs, and 
setting forth the content, and data documentation requirements of the 
NQTL comparative analyses, these proposed rules would clarify and 
strengthen the obligations of plans and issuers, and promote compliance 
with MHPAEA. In the course of implementing these proposed rules, 
parties would adjust their policies and procedures in order to come 
into compliance and better serve participants, beneficiaries, and 
enrollees. These proposed rules also help the Departments identify when 
they need to intervene.
    The Departments have already seen, in response to reviews of 
comparative analyses and requests for additional information, revisions 
to policies that remove treatment limitations. These proposed rules 
would help parties better understand what they need to do to comply 
with MHPAEA, reduce uncertainty about compliance status, and help plans 
and issuers better identify areas they need to improve.
    By improving compliance with MHPAEA, these proposed rules would 
have the greatest direct impact on individuals who currently forego 
treatments for a mental health condition or substance use disorder 
because their health plan imposes barriers to coverage of these 
services. The Departments cannot estimate how large this impact would 
be, though a 2021 survey by SAMHSA indicated that 19 percent of U.S. 
adults with mental illness that did not receive treatment in the past 
year at least partially attributed foregoing these services to their 
health insurance offering insufficient coverage for mental health 
services.\230\
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    \230\ SAMHSA. ``Key Substance Use and Mental Health Indicators 
in the United States: Results from the 2021 National Survey on Drug 
Use and Health.'' Table 6.50B. The question does not distinguish 
between sources of insurance, available at https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHNNR122322/2021NSDUHNNR122322.htm.
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    These proposed rules would also directly benefit individuals who 
are currently enrolled in a plan with inadequate or narrow networks 
with regard to mental health and substance use disorder providers 
compared to the networks for medical/surgical benefits, which prevent 
participants, beneficiaries, and enrollees from being able to make 
appointments with in-network providers and timely accessing needed 
care. A 2017 study of Affordable Care Act Marketplace provider networks

[[Page 51606]]

found that mental health networks were significantly narrower on 
average than primary care networks, providing less than half the share 
of providers practicing within a State-level market.\231\ A 2022 survey 
of private and non-Federal public employers found that while 82 percent 
of employers believed that there is a sufficient number of primary care 
providers in the plan networks, only 44 percent of employers believed 
there is a sufficient number of behavioral health providers in the plan 
networks.\232\ Moreover, a 2022 study of Medicaid patients in Oregon 
found that mental health services remained inaccessible for many 
patients due to phantom networks, which are rosters of network 
providers that list, as in-network providers, mental health and 
substance use disorder professionals and facilities who are not, in 
fact, available to participants, beneficiaries, and enrollees for 
network treatment.\233\ Phantom networks are also reportedly an issue 
for participants and beneficiaries of group health plans.\234\ A 
national survey of privately insured individuals that received mental 
health care treatment found that more than half of those patients that 
used a provider directory encountered inaccuracies which made them more 
likely to be treated by an out-of-network provider, and four times as 
likely to receive a surprise, out-of-network bill.\235\ In light of 
this concern, these proposed rules particularly highlight parity in 
network composition as an area that requires clarification in the NQTL 
space.
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    \231\ Zhu, Jane M., Yuehan Zhang, and Daniel Polsky. ``Networks 
in ACA Marketplaces are Narrower for Mental Health Care than for 
Primary Care.'' Health Affairs 36, no. 9 (September 2017): 1624-
1631.
    \232\ Kaiser Family Foundation. ``KFF Employer Benefits Survey, 
2022.'' (October 17, 2022) https://www.kff.org/report-section/ehbs-2022-summary-of-findings.
    \233\ Zhu, Jane M., Christina J. Charlesworth, Daniel Polsky, 
and K. John McConnell. ``Phantom Networks: Discrepancies Between 
Reported and Realized Mental Health Care Access in Oregon 
Medicaid.'' Health Affairs 41, no. 7 (2022): 1013-1022.
    \234\ See Ellison, Katherine, ``73 Doctors and None Available: 
How Ghost Networks Hamper Mental Health Care.'' The Washington Post 
(Feb. 19, 2022), available at https://www.washingtonpost.com/health/2022/02/19/mental-health-ghost-network/.
    \235\ Busch, Susan H. and Kelly A. Kyanko. ``Incorrect Provider 
Directories Associated with Out-of-Network Mental Health Care and 
Outpatient Surprise Bills.'' Health Affairs, Vol. 39 No. 6 (June 
2020): 975-083.
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1.6.2. Greater Access to Mental Health and Substance Use Disorder 
Treatments
    By improving plan and issuer understanding of and compliance with 
the requirements under MHPAEA, clarifying when and how comparative 
analyses of NQTLs should be conducted, and ensuring that the NQTLs are 
no more restrictive for mental health and substance use disorder 
benefits than for medical/surgical benefits, these proposed rules would 
improve compliance and, in turn, expand access to and utilization of 
mental health and substance use disorder services.\236\ Utilization-
related evidence is reviewed in section 1.7, below. The implementation 
of the CAA, 2023 provision that sunsets the MHPAEA opt-out election 
would reduce financial and non-financial barriers to accessing mental 
health and substance use disorder treatment for participants and 
beneficiaries of plans sponsored by self-funded, non-Federal 
governmental entities that currently elect to opt out of requirements 
under MHPAEA. This would result in increased access to care and lead, 
as discussed in more detail in the next section, to better health 
outcomes for plan participants and beneficiaries with a need for mental 
health care or substance use disorder services.
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    \236\ Wen, Hefei, Janet R. Cummings, Jason M. Hockenberry, Laura 
M. Gaydos, and Benjamin G. Druss. ``State Parity Laws and Access to 
Treatment for Substance Use Disorder in the United States: 
Implications for Federal Parity Legislation.'' JAMA Psychiatry 70, 
no. 12 (2013): 1355-1362.
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1.6.3. Better Health Outcomes Among Those With Mental Health Conditions 
and Substance Use Disorders
    By expanding access to mental health and substance use disorder 
services, these proposed rules may also result in better mental health 
and substance use disorder outcomes. A 2013 study found that State 
parity laws were associated with a five percent decrease in 
suicides.\237\ A 2022 study found that severe maternal morbidity (SMM) 
among childbearing individuals with commercial insurance decreased by 
53 percent between 2008 and 2019. The authors suggested implementation 
of MHPAEA may have had a role in the decreasing rates of SMM.\238\ An 
improvement in mental health and substance use disorder outcomes can 
also improve overall physical health outcomes. A 2017 study found that 
better past mental health was associated with more physical activity 
and social interactions, which resulted in an improvement in the 
present physical health.\239\
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    \237\ Lang, Matthew. ``The Impact of Mental Health Insurance 
Laws on State Suicide Rates.'' Health Economics 22, no. 1 (2013).
    \238\ Admon, Lindsay, Vanessa Dalton, Giselle Kolenic, Anca 
Tilea, Stephanie V. Hall, and Kara Zivin. ``MHPAEA/ACA Policy 
Implementation and Severe Maternal Morbidity Among Commercially 
Insured Individuals, 2008-2019 [A192].'' Obstetrics & Gynecology 139 
(2022): 56S.
    \239\ Ohrnberger, Julius, Eleonora Fichera, and Matt Sutton. 
``The Relationship between Physical and Mental Health: A Mediation 
Analysis.'' Social Science & Medicine 195 (2017): 42-49.
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1.6.4. Reduced Adverse Impacts on the Families, Friends, and Coworkers 
of People Who Suffer From Untreated or Poorly Managed Mental Health 
Conditions and Substance Use Disorders
    These proposed rules would help employees and their families meet 
their mental health care needs, and thus, may improve the productivity 
and resulting earnings of workers dealing with mental health and 
substance use disorder issues. Among adults with any mental health 
condition in 2021, only 47.2 percent received treatment.\240\ Moreover, 
while 15.6 percent of National Survey on Drug Use and Health 
respondents 12 and older were classified as needing substance use 
disorder treatment in 2021, only 6.3 percent received treatment that 
year.\241\ One survey found that more than 85 percent of individuals 
that did not receive needed mental health or substance use care 
reported negative impacts, including personal relationship issues, job 
issues and performing poorly or dropping out of school.\242\
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    \240\ SAMHSA. ``Key Substance Use and Mental Health Indicators 
in the United States: Results from the 2021 National Survey on Drug 
Use and Health.'' Figure 65.
    \241\ SAMHSA. ``Key Substance Use and Mental Health Indicators 
in the United States: Results from the 2021 National Survey on Drug 
Use and Health.'' Figure 54 and 57.
    \242\ National Council for Mental Wellbeing. ``2022 Access to 
Care Survey Results,'' May 11, 2022. https://www.thenationalcouncil.org/wp-content/uploads/2022/05/2022-Access-To-Care-Survey-Results.pdf.
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    The economic impact of untreated mental health and substance use 
disorders can be significant. A 2021 study found that the high 
prevalence of major depressive disorder among U.S. adults has increased 
workplace costs from $114.6 billion in 2010 to $198.6 billion in 
2018.\243\ A 2022 study found that, in low and middle-income countries, 
mental health interventions significantly improved work-related 
outcomes. Relative to a control group, participants receiving a mental 
health intervention experienced a 26 percent decrease in their 
inability to work and participant absence rates declined by 16 percent. 
The authors noted that these economic effects are ``somewhat larger'' 
for populations with severe mental

[[Page 51607]]

health disorders, compared to populations with mild mental health 
disorders.\244\ Finally, a 2015 study examined the impact of State 
parity laws on individuals with moderate levels of mental distress and 
found that State parity laws were associated with an increase in 
overall employment, weekly wages, and the number of hours worked per 
week, and attributed these changes to the increased productivity of 
these workers.\245\
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    \243\ Greenberg, Paul E., Andree-Anne Fournier, Tammy Sisitsky, 
Mark Simes, Richard Berman, Sarah H. Koenigsberg, and Ronald C. 
Kessler. ``The Economic Burden of Adults with Major Depressive 
Disorder in the United States (2010 and 2018).'' Pharmacoeconomics 
39, no. 6 (2021): 653-665.
    \244\ Lund, Crick, Kate Orkin, Marc Witte, Thandi Davies, John 
Walker, Johannes Haushofer, Sarah Murray, Judy Bass, Laura Murray, 
and Vikram Patel. ``Treating Mental Health Conditions Improves Labor 
Market and Other Economic Outcomes in Low and Middle-Income 
Countries.'' University of Oxford, Working Paper (2022).
    \245\ Andersen, Martin. ``Heterogeneity and the Effect of Mental 
Health Parity Mandates on the Labor Market.'' Journal of Health 
Economics 43 (2015).
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    These proposed rules would also have significant indirect impacts 
on families and social networks of individuals with untreated or poorly 
managed mental health conditions and substance use disorders, as well 
as society at large. By increasing access to services, these proposed 
rules would lead to more people receiving treatment, reducing the 
burden on family members and other support systems. This includes 
untreated maternal mental health conditions (MMHCs) which can lead to a 
reduced ability to work, increased risk of suicide, increased use of 
public services such as Medicaid, and worse maternal and child health. 
A 2022 study of the cost of MMHC to Texas women and their children 
projected costs for the 2019 birth cohort from the time of conception 
through five years postpartum to total $2.2 billion.\246\ Untreated 
MMHCs include untreated perinatal mood and anxiety disorders (PMADs), 
which have been found to account for approximately $48 million in 
societal costs in Vermont for the average annual birth cohort from 
conception through five years postpartum, including $12.5 million in 
productivity loss and $9.4 million in non-obstetric health 
expenditures.\247\ The cost in missed productivity due to workers' fair 
or poor mental health was estimated as $47.6 billion annually in 
2022.\248\ A 2022 study found that households with a family member 
diagnosed with a mental health disorder had lower health status scores 
compared to households without a mental illness diagnosis, suggesting 
evidence of family spillover effects on mental illness.\249\ Finally, a 
2020 study estimated that the societal costs of untreated opioid use 
disorder was approximately $1.02 trillion, which includes $35 billion 
in health care costs and $92 billion in lost productivity.\250\
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    \246\ Margiotta, Caroline, Jessica Gao, So O'Neil, Divya Vohra 
and Kara Zivin. ``The Economic Impact of Untreated Maternal Mental 
Health Conditions in Texas.'' BMC Pregnancy Childbirth 22, 700 
(2022). https://doi.org/10.1186/s12884-022-05001-6.
    \247\ Platt, Isabel, Emma Pendl-Robinson, Eric Dehus, So O'Neil, 
Divya Vohra, Kara Zivin, Michael Kenny and Laura Pentenrieder. 
``Estimating the Costs of Untreated Perinatal Mood and Anxiety 
Disorders in Vermont.'' Mathematica. May 2023. https://www.mathematica.org/publications/societal-costs-of-perinatal-mood-and-anxiety-disorders-in-vermont.
    \248\ Witters, Dan and Sangeeta Agrawal. ``The Economic Cost of 
Poor Employee Mental Health'' Gallup Workplace (December 13, 2022). 
https://www.gallup.com/workplace/404174/economic-cost-poor-employee-mental-health.aspx?version=print.
    \249\ Lee, Donghoon, Yeonil Kim, and Beth Devine. ``Spillover 
Effects of Mental Health Disorders on Family Members' Health-related 
Quality of Life: Evidence from a US Sample.'' Medical Decision 
Making 42, no. 1 (2022): 80-93.
    \250\ Florence, Curtis, Feijun Luo, and Ketra Rice. ``The 
Economic Burden of Opioid Use Disorder and Fatal Opioid Overdose in 
the United States, 2017.'' Drug and Alcohol Dependence 218 (2021): 
108350.
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1.7. Costs
    These proposed rules aim to promote access to mental health and 
substance use disorder services under MHPAEA, while seeking to limit 
costs on plans and issuers. The costs incurred in these activities are 
discussed below.
    A 2019 study which examined the impact of MHPAEA on the utilization 
of mental health and substance use disorder services in the private, 
large group employer-sponsored insurance market from 2005 to 2015 found 
that MHPAEA is positively associated with the utilization of outpatient 
mental health and substance use disorder benefits.\251\ A 2020 study of 
MHPAEA, using 2007 and 2011-12 data from the National Survey of 
Children's Health, found that among children and adolescents with 
family income between 150 and 400 percent of the Federal poverty level 
in States without prior parity laws, the enactment of MHPAEA resulted 
in a 2.8 percentage point increase in mental health care 
utilization.\252\ In addition, a 2019 study examined the effectiveness 
of the national primary care-mental health integration (PC-MHI) 
initiative of the Veterans Health Administration, which aimed to 
improve access to mental health services by embedding specialists, care 
managers, or both in primary care clinics to collaboratively care for 
veterans with psychiatric illness. It found that each percentage-point 
increase in the proportion of clinic patients seen by the PC-MHI 
providers was associated with an 11 percent increase in the average 
total mental health visits per year.\253\ Finally, another 2019 study, 
which examined the effectiveness of hybrid psychiatric care, a 
combination of in-person and telepsychiatry services, found that hybrid 
care increased the total number of outpatient encounters and increased 
the timeliness of care in mental health patients, compared to patients 
with in-person visits only.\254\
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    \251\ Mulvaney-Day, Norah, Brent J. Gibbons, Shums Alikhan, and 
Mustafa Karakus. ``Mental Health Parity and Addiction Equity Act and 
the Use of Outpatient Behavioral Health services in the United 
States, 2005-2016.'' American Journal of Public Health 109, no. S3 
(2019): S190-S196.
    \252\ Li, Xiaoxue, and Jie Ma. ``Does Mental Health Parity 
Encourage Mental Health Utilization Among Children and Adolescents? 
Evidence From The 2008 Mental Health Parity and Addiction Equity Act 
(MHPAEA).'' The Journal of Behavioral Health Services & Research 47, 
no. 1 (2020): 38-53.
    \253\ Leung, Lucinda B., Lisa V. Rubenstein, Jean Yoon, Edward 
P. Post, Erin Jaske, Kenneth B. Wells, and Ranak B. Trivedi. 
``Veterans Health Administration Investments in Primary Care and 
Mental Health Integration Improved Care Access.'' Health Affairs 38, 
no. 8 (2019): 1281-1288.
    \254\ Hughes, M. Courtney, Jack M. Gorman, Yingqian Ren, Sana 
Khalid, and Carol Clayton. ``Increasing Access to Rural Mental 
Health Care Using Hybrid Care that Includes Telepsychiatry.'' 
Journal of Rural Mental Health 43, no. 1 (2019): 30.
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1.7.1. Proposed Amendments to the Existing MHPAEA Regulations (26 CFR 
54.9812-1, 29 CFR 2590.712, 45 CFR 146.136)
    These proposed rules focus plans and issuers on the impact of NQTLs 
and associated practices on access to mental health and substance use 
disorder benefits. The regulations further stress the importance of 
avoiding NQTLs and practices that impose greater limits on access for 
participants, beneficiaries, and enrollees for mental health or 
substance use disorder benefits.
    For example, as discussed in section II.A.2 of the preamble, the 
definition of ``substance use disorders'' must include all disorders 
covered under the plan or coverage that fall under any of the 
diagnostic categories listed in the mental, behavioral, and 
neurodevelopmental disorders chapter (or equivalent chapter) of the 
most current version of the ICD as a mental or behavioral disorder due 
to psychoactive substance use (or equivalent category) or that are 
listed in the most current version of the DSM as a Substance-Related 
and Addictive Disorder (or equivalent category). Plans and issuers 
would also be required to use reasonable methods and analysis to 
determine if a limitation complies with the requirements of these 
proposed rules. The Departments believe that the proposed amendments 
could cause plans and issuers to revise their policies and remove 
treatment limitations in response to the Departments'

[[Page 51608]]

clarifications and examples. For instance, a 2016 study examined how 
private health plans responded to the 2010 interim final regulations 
and found that the majority of plans had eliminated annual limits 
related to behavioral health treatments. The percentage of health 
insurance products with special annual limits on mental health 
treatments decreased from 28 percent in 2009 to 4 percent in 2010, and 
a similar decrease was observed for health insurance products with 
special annual limits on substance use disorder treatments (from 26 
percent in 2009 to 3 percent in 2010).\255\ Therefore, plans and 
issuers could incur costs to implement changes associated with coverage 
revision of plan provisions, which might result in increased costs from 
expanded utilization of mental health and substance use disorder 
services. The Departments face uncertainty in quantifying these costs 
as they cannot estimate the potential increase in utilization and which 
services might see the largest increase in utilization.
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    \255\ Horgan, Constance M., Dominic Hodgkin, Maureen T. Stewart, 
Amity Quinn, Elizabeth L. Merrick, Sharon Reif, Deborah W. Garnick, 
and Timothy B. Creedon. ``Health Plans' Early Response to Federal 
Parity Legislation for Mental Health and Addiction Services.'' 
Psychiatric Services 67, no. 2 (2016): 162-168.
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1.7.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, 45 CFR 
146.137; 45 CFR 146.180)
    These proposed rules would amend the content and data, and 
documentation requirements for comparative analyses required by the 
CAA, 2021 and outline the timeframes and processes for plans and 
issuers to provide their comparative analyses to the Departments upon 
request. These proposed rules would require plans and issuers to 
collect and evaluate relevant data with each comparative analysis 
requested by the Departments for all NQTLs, including but not limited 
to the number and percentage of relevant claims denials and any other 
data required by State law or private accreditation standards, and for 
NQTLs related to network composition, data including, but not limited 
to, in-network and out-of-network utilization rates (including time and 
distance data, data on providers, network adequacy metrics (including 
time and distance data, and data on providers accepting new patients), 
and provider reimbursement rates (including as compared to billed 
charges).
    Plans and issuers would incur costs associated with collecting, 
processing, and analyzing data under the new proposed data 
requirements, including data on claims denials, data relevant to NQTLs 
as required by State law or private accreditation standards, in-network 
and out-of-network utilization rates, network adequacy metrics, 
provider reimbursement rates and other relevant data. As discussed in 
section 1.5.3 of this RIA, issuers and TPAs provide key support for 
plan compliance with MHPAEA and would incur most of the burden given 
their large involvement in the plan design and NQTL analyses. The 
Departments request comments on whether plans, issuers, and TPAs 
already collect and examine this data.
    To meet the proposed new content requirements for the comparative 
analyses, the Departments, based on internal discussion, expect that on 
average, plans would need to analyze 4 NQTLs and issuers would need to 
analyze 8 NQTLs. Plans and issuers preparing their own comparative 
analyses would incur an incremental burden of 10 hours per NQTL in the 
first year, with 2 hours for a general or operations manager to review 
the requirements and outline the changes needed for the comparative 
analyses and 8 hours for a business operations specialist to prepare 
the comparative analyses. In the first year, this would result in a 
cost burden of approximately $291.0 million.\256\ The amount of time 
spent by plans preparing their own comparative analyses could vary 
depending on the level of cooperation by the TPA. Once the comparative 
analyses are performed and documented, plans would need to update the 
analyses when making changes to the terms of the plan or coverage, 
including changes to the way NQTLs are applied to mental health and 
substance use disorder benefits. In subsequent years, the Departments 
estimate plans would incur an incremental burden of 4 hours annually 
per NQTL to update the analyses, with 1 hour for a general or 
operations manager and 3 hours for a business operations specialist. In 
subsequent years, this would result in a cost burden of approximately 
$117.6 million.\257\ The Departments seek comments on these 
assumptions.
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    \256\ A labor rate of $132.38 is used for a general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. (Source: Estimates for total 
compensation are based on mean hourly wages by occupation from the 
2021 Occupational Employment Statistics and estimates of wages and 
salaries as a percentage of total compensation by occupation are 
from the December 2021 National Compensation Survey's Employee Cost 
for Employee Compensation. Estimates for overhead costs for services 
are imputed from the 2020 Service Annual Survey. To obtain overhead 
cost on an occupational basis, the estimate allocates total industry 
overhead cost to unique occupations using a matrix of detailed 
occupational employment for each NAICS industry. All values are in 
2023 dollars.) The labor rate is applied in the calculation as: 
[(27,499 ERISA self-insured group health plans x 4 NQTLs x 2 hours x 
$132.38 for a general or operations manager) + (27,499 ERISA self-
insured group health plans x 4 NQTLs x 8 hours x $109.96 for a 
business operations specialist) + (1,500 issuers x 8 NQTLs x 2 hours 
x $132.38 for a general or operations manager) + (1,500 issuers x 8 
NQTLs x 8 hours x $109.96 for a general or operations manager) + 
(33,076 self-funded, non-Federal governmental health plans x 4 NQTLs 
x 2 hours x $132.38 for a general or operations manager) + (33,076 
self-funded, non-Federal governmental health plans x 4 NQTLs x 2 
hours x $109.96 for a business operations specialist)] = 
$291,031,092.
    \257\ A labor rate of $132.38 is used for a general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rate is applied in the 
calculation as: [(27,499 ERISA self-insured group health plans x 4 
NQTLs x 1 hour x $132.38 for a general or operations manager) + 
(27,499 ERISA self-insured group health plans xx 4 NQTLs x 3 hours x 
$109.96 for a business operations specialist) + (1,500 x 8 NQTLs x 1 
hour x $132.38 for a general or operations manager) + (1,500 issuers 
x 8 NQTLs x 3 hours x $109.96 for a general or operations manager) + 
(33,076 self-funded, non-Federal governmental health plans x 4 NQTLs 
x 1 hours x $132.38 for a general or operations manager) + (33,076 
self-funded, non-Federal governmental health plans x 4 NQTLs x 3 
hours x $109.96 for a business operations specialist)] = 
$117,552,718.
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    Additionally, plans and issuers must make the comparative analyses 
and other applicable information required by the CAA, 2021 available 
upon request to participants and beneficiaries in plans subject to 
ERISA and to participants, beneficiaries, and enrollees in all non-
grandfathered group health plans and non-grandfathered group or 
individual health insurance coverage upon request in connection with an 
appeal of an adverse benefit determination. The Departments estimate 
that on average each plan or issuer would receive one request annually 
and that plans and issuers would annually incur a burden of 5 minutes 
for a clerical worker to prepare and send the comparative analyses to 
each requesting participant or beneficiary. This would result in an 
annual cost burden of approximately $10.5 million.\258\ The Departments 
also assume that 58.2 percent of requests would be delivered 
electronically, resulting in a de minimis cost.\259\ The

[[Page 51609]]

remaining 41.8 percent of requests would be mailed, at a cost of $1.14 
each, which is postage for a 3-ounce letter. The annual cost burden to 
mail the comparative analyses to the participants and beneficiaries 
requesting them would therefore be approximately $1.6 million.\260\
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    \258\ The Departments estimate that there are 476 issuers with 
1,500 issuer/State combinations offering individual and group health 
coverage nationwide. A labor rate of $63.45 is used for a clerical 
worker. The labor rate is applied in the calculation as: (1,898,298 
ERISA group health plans + 90,126 non-Federal governmental health 
plans + 1,500 issuers/State combinations providing coverage in the 
group and individual market) x 5 minutes x $63.45 = $10,521,787.
    \259\ According to data from the National Telecommunications and 
Information Agency (NTIA), 40.0 percent of individuals aged 25 and 
over have access to the internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt-
out of electronic disclosure that are automatically enrolled (for a 
total of 33.6 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 40.4 percent of individuals aged 
25 and over have access to the internet outside of work. According 
to a Pew Research Center survey, 61.0 percent of internet users use 
online banking, which is used as the proxy for the number of 
internet users who will affirmatively consent to receiving 
electronic disclosures (for a total of 24.7 percent receiving 
electronic disclosure outside of work). Combining the 33.6 percent 
who have access to electronic disclosure at work with the 24.7 
percent who have access to electronic disclosure outside of work 
produces a total of 58.2 percent who will receive to electronic 
disclosure overall.
    \260\ The Departments assume one request per entity and that 
each mailed response will cost $1.89 in materials and postage, on 
average. The mailing and postage cost assume $.05 per printed page, 
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost is estimated as (1,488,476 fully-
insured, non-grandfathered plans with less than 50 participants + 
409,822 ERISA-covered group health plans with 50 or more 
participants + 1,500 issuers/State Combinations + 90,126 non-Federal 
governmental health plans) x 41.8% x ($1.14 + (15 pages x $0.05)) = 
$1,572,080.
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    In the first year, group health plans and issuers would need time 
to familiarize themselves with these proposed rules and amendments. The 
Departments assume that on average it would require six and a half 
hours for an attorney to review these proposed rules and amendments. 
This would result in a one-time cost burden of $64.3 million.\261\
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    \261\ A labor rate of $159.34 is used for an attorney (this 
figure reflects the median hourly wage of lawyers according to the 
DOL Bureau of Labor Statistics Occupational Employment and Wage 
Statistics for May 2022, doubled to account for overhead costs and 
benefits). The reading time is calculated based on an average 250 
words per minute reading rate. The labor rate is applied in the 
calculation as: (27,499 self-funded, ERISA group health plans + 
33,076 self-funded, non-Federal governmental health plans + 1,500 
issuers/State combinations providing coverage in the group and 
individual market) x 6.5 hours x $159.34 = $64,291,778.
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    According to the 2021 National Health Expenditure Data, the total 
contribution of private employers to health insurance premiums is 
$554.1 billion. The total contribution of State and local employers to 
health insurance premiums is $179.7 billion.\262\ The total health 
expenditure on the individual market is $80.9 billion.\263\ In the 
first year, the cost to comply with these proposed rules is estimated 
to be approximately $367.4 million,\264\ which represents 0.05 percent 
of total premiums in these markets. In subsequent years, the cost to 
comply with these proposed rules is estimated to be approximately 
$129.6 million,\265\ which represents 0.02 percent of total premiums in 
these markets. The Departments request comments regarding the costs 
associated with these proposed rules and amendments. To be most useful, 
comments should distinguish between the cost to comply with existing 
parity requirements and the cost to comply with the requirements of 
these proposed rules.
---------------------------------------------------------------------------

    \262\ Centers for Medicare and Medicaid Services. ``National 
Health Expenditure Data.'' NHE Tables--Table 24. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
    \263\ Centers for Medicare and Medicaid Services. ``National 
Health Expenditure Data.'' NHE Tables--Table 21. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/nationalhealthaccountshistorical.
    \264\ The cost is estimated as follows: $291.0 million for 
preparing the comparative analyses + $64.3 million for reviewing the 
proposed rules and amendments + $10.5 million to prepare the 
comparative analyses upon request to participants and beneficiaries 
+ $1.6 million to distribute the comparative analyses to 
participants and beneficiaries = $367.4 million.
    \265\ The cost is estimated as follows: $117.6 million for 
preparing the comparative analyses + $10.5 million for preparing the 
comparative analyses upon request to participants and beneficiaries 
+ $1.6 million to distribute the comparative analyses to 
participants and beneficiaries = $129.6 million.
---------------------------------------------------------------------------

    HHS assumes that most of the self-funded, non-Federal governmental 
plans that would be affected by the implementation of the CAA, 2023 
provision that sunsets the MHPAEA opt-out election currently offer 
mental health and substance use disorder benefits, but that many of 
these plans might not be complying with MHPAEA. These plans would incur 
costs to come into compliance. In particular, some plans might have to 
remove limits on or offer more generous mental health and substance use 
disorder benefits, which would likely increase utilization of mental 
health and substance use disorder services, increasing the number of 
claims submitted, and the overall costs incurred by these plans. Plans 
that have opted out of requirements under MHPAEA would also need to 
conduct NQTL comparative analyses if they are not already doing so. HHS 
is unable to estimate the potential costs to these plans because the 
extent to which these plans are currently out of compliance is unknown, 
and costs associated with coming into compliance would vary from plan 
to plan. HHS seeks comments on the potential costs to these plans to 
come into compliance with MHPAEA.
    HHS estimates that the implementation of the CAA, 2023 provision 
that sunsets the MHPAEA opt-out election would generate a total cost 
savings of approximately $11,351 for plans (as discussed in section 2.2 
of this RIA), as these plans would no longer be required to submit an 
opt-out notice to the Federal Government or prepare and disseminate an 
opt-out notice to plan participants regarding the plan's opt-out 
election, as long as the plans do not elect to permissibly opt-out of 
other requirements. This proposed provision would also generate cost 
savings of approximately $2,469 for the Federal Government, as 
discussed in section 2.2 of this RIA, as HHS would no longer have to 
process the opt-out notices submitted by several of these plans.
1.8. Transfers
    Improving parity in coverage of mental health and substance use 
disorder benefits has the potential to increase premiums, change the 
spending patterns of plans and issuers, and change the utilization 
patterns of participants, beneficiaries, and enrollees. The Departments 
recognize these as transfers among participants, beneficiaries, and 
enrollees, plans and issuers, and mental health and substance use 
disorder providers and facilities. Specifically, the Departments expect 
these proposed rules would result in: (1) transfers from plans and 
issuers to participants, beneficiaries, and enrollees caused by lower 
out-of-pocket spending; (2) transfers from participants, beneficiaries, 
and enrollees to plans and issuers caused by higher premiums; and (3) 
transfers between primary care providers and mental health providers 
for the treatment of mental health and substance use disorders 
resulting from the anticipated shift of participants, beneficiaries, 
and enrollees choosing to obtain treatment from a specialist instead of 
a primary care provider. The Departments request comment or data on how 
large these transfers might be.
1.8.1. Transfers From Plans and Issuers to Participants, Beneficiaries, 
and Enrollees Caused by Lower Out-of-Pocket Spending
    These proposed rules could result in a transfer from plans and 
issuers to participants, beneficiaries, and enrollees through lower 
out-of-pocket spending for mental health and substance use disorder 
services. For example, a 2013 study examined the impact of the 2001 
parity directive in the Federal Employees Health Benefits (FEHB) 
Program and found that the annual out-

[[Page 51610]]

of-pocket spending for FEHB enrollees diagnosed with bipolar disorder, 
major depression, or adjustment disorder decreased by between $78 and 
$86.\266\ Furthermore, a 2018 study compared commercially-insured 
children ages 3 to 18 years in 2008 who were continuously enrolled in 
plans newly subject to parity under MHPAEA to children continuously 
enrolled in plans never subject to MHPAEA. The 2018 study found that 
children with mental health conditions who were enrolled in plans 
subject to parity had, on average, $140 lower annual out-of-pocket 
mental health spending than expected compared to the comparison group. 
The study further found that children in or above the 85th percentile 
in total mental health spending who were enrolled in plans subject to 
MHPAEA had, on average, $234 lower annual out-of-pocket mental health 
spending than those in the comparison group.\267\ Finally, a 2019 study 
examined the impact of MHPAEA on mental health services spending in a 
commercially-insured population diagnosed with mental health disorders 
and found that MHPAEA resulted in a decrease in the mean out-of-pocket 
spending per mental health outpatient visit.\268\
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    \266\ Busch, Alisa B., Frank Yoon, Colleen L. Barry, Vanessa 
Azzone, Sharon-Lise T. Normand, Howard H. Goldman, and Haiden A. 
Huskamp. ``The Effects of Parity on Mental Health and Substance Use 
Disorder Spending and Utilization: Does Diagnosis Matter?'' The 
American Journal of Psychiatry 170, no. 2 (2013): 180.
    \267\ Kennedy-Hendricks, Alene, Andrew J. Epstein, Elizabeth A. 
Stuart, Rebecca L. Haffajee, Emma E. McGinty, Alisa B. Busch, Haiden 
A. Huskamp, and Colleen L. Barry. ``Federal Parity and Spending for 
Mental Illness.'' Pediatrics 142, no. 2 (2018).
    \268\ Haffajee, Rebecca L., Michelle M. Mello, Fang Zhang, Alisa 
B. Busch, Alan M. Zaslavsky, and J. Frank Wharam. ``Association Of 
Federal Mental Health Parity Legislation with Health Care Use and 
Spending Among High Utilizers of Service.'' Medical Care 57, no. 4 
(2019): 245.
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1.8.2. Transfers From Participants, Beneficiaries, and Enrollees to 
Plans and Issuers Caused by Higher Premiums
    These proposed rules might also result in a transfer from 
participants, beneficiaries, and enrollees to plans and issuers in the 
form of higher premiums. By limiting the ability of plans and issuers 
to avoid costs of certain mental health and substance use disorder 
treatments, while increasing access to and utilization of these 
services, plans and issuers might increase premiums and change cost-
sharing requirements (for example, by raising deductibles) to offset 
these costs. Similarly, by incorporating the statutory requirement that 
NQTLs be no more restrictive for mental health and substance use 
disorder benefits than for medical/surgical benefits, plans and issuers 
might reduce the number of NQTLs employed and increase premiums in 
order to offset the costs of participants utilizing more mental health 
and substance disorder benefits.
    Many studies attempt to isolate the changes in health costs 
associated with implementing parity. For example, in 2007 the 
Congressional Budget Office estimated that MHPAEA would increase 
premiums for group health insurance by 0.4 percent on average.\269\ 
Another study by the Society of Actuaries on mental health parity found 
in 2005 that, ``overall health care costs increased minimally and in 
some cases were even reduced.'' \270\ The Departments anticipate that 
these proposed rules would have a minimal impact on premiums, but there 
may be instances in which plans and issuers may impose higher premiums. 
The Departments request comments or data on this transfer.
---------------------------------------------------------------------------

    \269\ Congressional Budget Office. Congressional Budget Office 
Cost Estimate: S558. March 20, 2007. https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/78xx/doc7894/s558.pdf.
    \270\ Melek, Steve. ``The Cost of Mental Health Parity.'' Health 
Section News. Issue 49. (2005) As presented to the Society of 
Actuaries. https://www.soa.org/globalassets/assets/library/newsletters/health-section-news/2005/march/hsn-2005-iss49-melek-b.pdf.
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1.8.3. Transfers Between Primary Care Providers and Mental Health 
Providers
    Finally, these proposed rules may result in a transfer from primary 
care providers to mental health and substance use disorder providers. 
More specifically, patients may be more likely to visit a mental health 
or substance use disorder specialist compared to a primary care 
provider, as these proposed rules clarify the manner in which plans and 
issuers must provide parity in coverage for mental health and substance 
use disorder benefits and medical/surgical benefits. A 2012 study that 
examined the impact of Oregon's 2007 parity law on the choice of 
provider found that the law was associated with a slight increase in 
the likelihood of patients seeking care with masters-level specialists, 
and relatively little change for generalist physicians, psychiatrists, 
and psychologists. The findings suggest that these proposed rules may 
lead to a slight shift in the use of nonphysician specialists, 
including masters-level specialists, and away from generalist 
physicians.\271\
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    \271\ McConnell, K. John, Samuel HN Gast, and Bentson H. 
McFarland. ``The Effect of Comprehensive Behavioral Health Parity on 
Choice of Provider.'' Medical Care 50, no. 6 (2012): 527.
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1.8.4. Transfers Associated With the Implementation of the CAA, 2023 
Provision That Sunsets the MHPAEA Opt-Out Election for Self-Funded, 
Non-Federal Governmental Plans
    HHS anticipates that the proposed amendments to implement the CAA, 
2023 provision that sunsets the MHPAEA opt-out election for self-
funded, non-Federal governmental plans would have similar effects as 
the other provisions examined in this subsection of the RIA. These 
proposed amendments might lead to improved coverage of and lower cost-
sharing requirements for mental health and substance use disorder 
benefits for participants and beneficiaries of self-funded, non-Federal 
governmental plans. This would lead to lower out-of-pocket costs for 
plan participants and beneficiaries who receive mental health or 
substance use disorder services. This would be viewed as a transfer 
from self-funded, non-Federal governmental plans to participants and 
beneficiaries.
    On the other hand, as noted in section 1.7 of this RIA, if the 
proposed amendments cause plans to remove limits on or offer more 
generous mental health and substance use disorder benefits, utilization 
of mental health and substance use disorder services might increase, 
which may result in the number of claims submitted and the overall 
costs incurred by plans to also increase. This, in turn, might lead to 
higher premiums and/or deductibles for plan participants, which may 
seem to be a transfer from plan participants to self-funded, non-
Federal governmental plans, but is instead an indication of who bears 
the societal cost presented in section 1.7.
1.9. Uncertainty
    It is unclear what percentage of participants, beneficiaries, and 
enrollees experience more restrictive NQTLs and more stringent 
practices related to the design and implementation of mental health and 
substance use disorder benefits, as compared to medical/surgical 
benefits. Similarly, it is unclear what percentage of plans and issuers 
impose greater limitations on mental health and substance use disorder 
benefits than on medical/surgical benefits. This frequency may differ 
among small and large plans and issuers. Examining some plans' 
comparative analyses shows that they are not in full compliance with 
MHPAEA's requirements for NQTL's although the extent across all plans 
is not known. As documented in the 2022 MHPAEA Report to Congress, DOL 
completed a compliance review of 48

[[Page 51611]]

NQTLs (36 unique NQTLs), corresponding to 30 plans and issuers as of 
October 31, 2021. All of these reviews resulted in an initial 
determination of noncompliance with MHPAEA.\272\
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    \272\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf.
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    While the Departments expect that these proposed rules would result 
in plans and issuers expanding coverage of mental health and substance 
use benefits, it is possible that instead of relaxing the use of NQTLs 
on mental health and substance use disorder benefits, some plans and 
issuers may impose additional NQTLs on medical/surgical benefits. As a 
result, some types of medical/surgical benefits may become less 
accessible for some participants, beneficiaries, and enrollees, which 
could lead to an increase in out-of-pocket costs.
    There is also a possibility that some plans and issuers would stop 
offering mental health and substance use disorder benefits. In 2010, 2 
percent of employers reported discontinuing their coverage of mental 
health and substance use disorder treatments.\273\ Nevertheless, as 
discussed in section 1.6 of this RIA, the Departments anticipate that 
these proposed rules would expand the level of coverage for mental 
health and substance use disorder benefits, which would result in 
reduced out-of-pocket spending for plan participants, beneficiaries, 
and enrollees. The Departments face uncertainty in estimating the 
magnitude of savings and welcome any comments and data that can help 
estimate the amount of decrease in out-of-pocket spending. The 
Departments also invite comments and data related to other issues 
identified in this section.
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    \273\ Government Accountability Office. ``Mental Health and 
Substance Use: Employers' Insurance Coverage Maintained or Enhanced 
Since Parity Act, but Effect of Coverage on Enrollees Varied,'' GAO-
12-63, November 2011.
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    Further, there may be some possible societal spillover effects 
which may occur as a result of these proposed rules. For example, 
increasing access to mental health and substance use disorder services 
may improve public safety in the long-term. A 2017 study on whether 
State parity laws for substance use disorder treatments was associated 
with reduced fatal traffic accidents found that passage of State parity 
laws was associated with reduced annual total traffic fatality rates by 
4.1 to 5.4 percent.\274\ In addition, a 2021 study which examined the 
impact of State parity laws on crime between 1994 and 2010 found that 
the passage of State parity laws was associated with a reduction of 
violent crimes by 5 to 7 percent and that the resulting lower crime 
rates were associated with an annual savings of $3 billion.\275\ These 
studies may suggest that the benefits of these proposed rules may go 
beyond the listed benefits discussed in this RIA.
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    \274\ Popovici, Ioana, Johanna Catherine Maclean, and Michael T. 
French (2017). ``The Effects of Health Insurance Parity Laws for 
Substance Use Disorder Treatment on Traffic Fatalities: Evidence of 
Unintended Benefits.'' National Bureau of Economic Research. https://www.nber.org/system/files/working_papers/w23388/revisions/w23388.rev0.pdf?sy=388.
    \275\ Sharma, Keshob. ``Do Mental Health Parity Laws Reduce 
Crime?'' (2021).
---------------------------------------------------------------------------

    HHS is unable to precisely forecast how many participants and 
beneficiaries would be affected by the proposed amendments to implement 
the CAA, 2023 provision that sunsets the MHPAEA opt-out election for 
self-funded, non-Federal governmental plans, as plan sponsors that have 
elected to opt out of requirements under MHPAEA were not required to 
report that information to HHS as part of their HIPAA opt-out filings.
    It is possible that some self-funded, non-Federal governmental 
plans would stop offering mental health and substance use disorder 
benefits in response to the proposed amendments. However, HHS is unable 
to estimate the potential number of self-funded, non-Federal 
governmental plans that might do so. It is also possible that some 
self-funded, non-Federal governmental plans might increase the 
financial requirements and treatment limitations that apply to medical/
surgical benefits in response to this proposed provision, to ensure 
that these financial requirements and treatment limitations are 
comparable to those for mental health and substance use disorder 
benefits. HHS anticipates that this is a less likely outcome of these 
proposed amendments.
    HHS seeks comments on the potential number of self-funded, non-
Federal governmental plans that might stop offering mental health and 
substance use disorder benefits, as well as the potential number of 
self-funded, non-Federal governmental plans that might increase 
financial requirements and treatment limitations for medical/surgical 
benefits in response to the proposed amendments. HHS also seeks 
comments on the potential number of participants and beneficiaries that 
might be affected by these potential plan changes.
1.10. Alternatives
    In addition to the regulatory approach outlined in these proposed 
rules, the Departments considered alternatives when developing policy 
regarding the implementation of MHPAEA. The Departments considered not 
expressly incorporating the statutory requirement that NQTLs be no more 
restrictive for mental health and substance use disorder benefits than 
for medical/surgical benefits. However, as described in section I.E of 
this preamble, it is clear that plans and issuers too often fail to 
consider the impact of their NQTLs on access to mental health and 
substance use disorder benefits, consistent with MHPAEA's fundamental 
purpose. While the Departments have seen some promising results in 
response to their reviews of plans' and issuers' comparative analyses 
under the CAA, 2021's requirements, they have also seen a great deal of 
confusion about the application of the current regulation to NQTLs and 
about the parity obligation generally. Based on the Departments' 
experience with plans' and issuers' attempts to comply with the 
existing regulations and guidance and the CAA, 2021, they have 
concluded that the existing MHPAEA regulations failed to sufficiently 
focus attention on the obligation to ensure that NQTLs, and associated 
processes, strategies, factors, and evidentiary standards, avoid 
placing disparate burdens on participants', beneficiaries', and 
enrollees' access to covered mental health and substance use disorder 
treatment. Accordingly, the Departments believe that the proposed 
amendments would be beneficial to participants, beneficiaries, and 
enrollees, as plans and issuers revise their policies and remove or 
amend NQTLs that are inconsistent with MHPAEA.
    The Departments also considered not requiring plans and issuers to 
use specific data elements in preparing their comparative analyses or 
to provide the data to the Departments upon request. However, during 
their review of comparative analyses as part of their reporting 
requirements to Congress, the Departments found that many plans and 
issuers did not initially provide sufficient information to demonstrate 
compliance of an NQTL either by design, application, or both. It is 
often difficult, to assess compliance in operation without such data. 
By requiring the consideration, use, and production of this data, the 
regulation should result in improved review of plans' and issuers' 
policies and processes, and improved parity

[[Page 51612]]

outcomes for participants, beneficiaries, and enrollees.
1.11. Conclusion
    The Departments expect that these proposed rules, if finalized, 
would provide plans and issuers with a better understanding of the 
requirements of MHPAEA and improve how they measure, analyze, document, 
and demonstrate parity with regard to NQTLs. The Departments are of the 
view that these proposed rules and corresponding associated Technical 
Release, if finalized, would help plans and issuers produce NQTL 
comparative analyses that meet the requirements of the CAA, 2021, 
resulting in improved access to and coverage of mental health and 
substance use disorder treatments, which should ultimately result in 
better mental health outcomes.
2. Paperwork Reduction Act
2.1. Paperwork Reduction Act--Departments of Labor and the Treasury
    As part of their continuing effort to reduce paperwork and 
respondent burden, the Departments conduct a preclearance consultation 
program to allow the general public and Federal agencies to comment on 
proposed and continuing collections of information in accordance with 
the Paperwork Reduction Act of 1995 (PRA).\276\ This helps to ensure 
that the public understands the Departments' collection instructions, 
respondents can provide the requested data in the desired format, 
reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the Departments can 
properly assess the impact of collection requirements on respondents.
---------------------------------------------------------------------------

    \276\ 44 U.S.C. 3506(c)(2)(A) (1995).
---------------------------------------------------------------------------

    Currently, the Departments are soliciting comments concerning the 
proposed information collection request (ICR) included in the MHPAEA 
Notices. To obtain a copy of the ICR, contact the PRA addressee shown 
below or go to https://www.RegInfo.gov.
    The Departments have submitted a copy of these proposed rules to 
OMB in accordance with 44 U.S.C. 3507(d) for review of its information 
collections. The Departments and OMB are particularly interested in 
comments that:
     Evaluate whether the collection of information is 
necessary for the functions of the agency, including whether the 
information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology (for example, 
permitting electronically delivered responses).
    Commenters may send their views on the Department's PRA analysis in 
the same way they send comments in response to these proposed rules 
(for example, through the www.regulations.gov website), including as 
part of a comment responding to the broader NPRM.
    PRA Addressee: Address requests for copies of the ICR to James 
Butikofer, Office of Research and Analysis, U.S. Department of Labor, 
Employee Benefits Security Administration, 200 Constitution Avenue NW, 
Room N-5718, Washington, DC 20210; [email protected] (https://www.reginfo.gov/public/do/PRAMain).
    Readers should note that the PRA requires a non-incremental 
analysis of information collections, and hence the overall summary of 
the paperwork burden estimates in this section includes the entire on-
going burden imposed by information collections required by MHPAEA, the 
CAA, and subsequent guidance. The incremental hour and cost burdens of 
these proposed rules are discussed in detail below. For a full 
discussion of all burden related to this information collection please 
see the supporting statement which is part of the ICR available at 
https://www.reginfo.gov/public/do/PRAMain.
2.1.1. Amendment to Existing MHPAEA Regulations (29 CFR 2590.712; 26 
CFR 54.9812-1)
    The proposed amendments to the existing MHPAEA regulations would 
add new definitions, amend existing definitions, specify new 
requirements related to NQTLs, amend existing examples of NQTLs, and 
add new examples of NQTLs, providing clarity to interested parties. The 
proposed amendments would also specify that mental health and substance 
use disorder definitions must be consistent with generally recognized 
independent standards of current medical practice and would add more 
specificity as to what conditions or disorders plans and issuers would 
be required to treat as mental health and substance use conditions or 
disorders.
2.1.2. New Regulation (29 CFR 2590.712-1; 26 CFR 54.9812-2)
    These proposed rules set more specific content and data 
requirements for the NQTL comparative analyses required by MHPAEA as 
amended by the CAA, 2021, clarify when the comparative analyses need to 
be performed, and outline the timeframes and process for plans and 
issuers to provide their comparative analyses to the Departments or 
applicable State authority upon request. These proposed rules would 
also require plans and issuers to collect and evaluate relevant data as 
part of each comparative analysis, including but not limited to claims 
denials, data relevant to NQTLs as required by State law or private 
accreditation standards, utilization rates, network adequacy metrics, 
and provider reimbursement rates, in fulfillment of the existing 
requirement that they evaluate and document their evaluation as part of 
the analysis of the application of NQTLs related to network composition 
and provider reimbursement.
    For the purpose of this analysis, it is assumed that health 
insurance issuers would fulfill the data request for fully insured 
group health plans. This burden is accounted for under HHS' OMB Control 
number 0938-1393 and is discussed later in this document. It is also 
assumed that TPAs and other service providers would fulfill the 
requirements for the vast majority of self-insured group health plans.
2.1.3. Burden Estimates for Both Existing Requirements and Proposed 
Requirements
    The Departments estimate that there are approximately 250,000 ERISA 
self-insured group health plans with 50 or more participants that are 
affected by these proposed rules.\277\ The Departments believe that the 
number of self-insured group health plans that actually perform the 
analysis themselves and incur the full estimated compliance costs may 
be much smaller. The Departments analyzed 2020 Form 5500 Schedule C 
(Service Provider

[[Page 51613]]

Information) filings of self-insured health plans and determined that 
89 percent of those plans indicated that they contracted with a 
TPA.\278\ Self-insured group health plans could fulfill the 
requirements with the help of TPAs and other service providers.
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    \277\ MHPAEA only applies to ERISA plans in the group market 
with 50 or more participants that offer mental health or substance 
use disorder (MH/SUD) benefits. The Departments have not identified 
what share of plans with 50 or more participants offer MH/SUD 
benefits and has therefore assumed that all of these plans offer 
them. Based on the 2021 Medical Expenditure Survey, 61 percent of 
ERISA-covered group health plans with 50 or more participants are 
self-insuring. Thus, the Department calculates the number of ERISA 
self-insured group health plans with 50 or more participants based 
on the following manner: 409,822 ERISA group health plans with 50 or 
more participants x 61% = 249,991.
    \278\ Because many plans are exempt from filing a Form 5500, the 
Department only identified 37,934 self-insured health plan filings 
for 2020. Of these, only 5,537 plans (or roughly 15 percent) 
attached a Schedule C. Of those plans, 4,920 (or roughly 89 percent) 
indicated they paid compensation, either directly or indirectly, of 
at least $5,000 for either claims processing, contract 
administration, or both.
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    To the extent self-insured plans use plan designs provided by TPAs 
or service providers responsible for nearly identical fully insured 
plans, those TPAs or service providers could utilize the analysis 
already performed for those fully insured plans, while helping these 
self-insured plans comply with the requirements. The Departments assume 
that most self-insured health plans would utilize service providers to 
perform the analysis and that only 11 percent \279\ (27,499) of the 
affected self-insured group health plans, primarily the largest, would 
need to conduct the analyses themselves for their plan specific 
design.\280\ The Departments request comments on the percent of self-
insured group health plans that would rely on analyses that TPAs and 
other service providers have already performed for their other plans, 
thus reducing estimated burden on plans.
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    \279\ Based on the 2020 Form 5500, 89 percent of self-insured 
plans filed a Schedule C and indicated using either a Claims 
Processor, Contract Administrator, or both.
    \280\ The Departments assume only large plans, defined as a plan 
with 50 or more participants would self-administer. 249,991 self-
funded ERISA plans with 50 or more participants x 11 percent of 
plans that self-administer = 27,499.
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    The Departments expect that even these numbers may overestimate the 
number of self-insured plans that would perform the analysis 
themselves, without assistance from TPAs or service providers. For 
example, in DOL's review of comparative analyses, which has focused on 
self-funded plans, the reliance on insurance companies, TPAs, and other 
service providers for much or all of the work has been nearly 
universal. As noted above, this is not surprising because of the 
outsized role insurance companies, TPAs and other service providers 
tend to play in designing the plans, administering the networks, 
managing claims, providing plan services, maintaining and holding the 
data relevant to the comparative analyses, and driving MHPAEA 
compliance or noncompliance.
    Non-grandfathered, fully insured ERISA plans with less than 50 
participants that are subject to MHPAEA under the Essential Health 
Benefits (EHB) requirements of the Affordable Care Act are likely to 
have their issuers prepare their comparative analyses. Issuers can take 
advantage of economies of scale by preparing the required documents for 
those plans purchasing coverage. HHS has jurisdiction over issuers and 
therefore is accounting for this portion of the burden in their 
analysis, in addition to the burden related to non-Federal governmental 
plans. Accordingly, this analysis considers only the burden associated 
with ERISA self-insured group health plans, which are under the 
jurisdiction of the DOL and Treasury.
    These proposed rules require that group health plans offering group 
health insurance coverage must make a comparative analysis available 
upon request by DOL. The CAA, 2021 requires DOL to collect no fewer 
than 20 comparative analyses per year, but it also provides that DOL 
shall request that a group health plan or issuer submit the comparative 
analyses for plans that involve potential MHPAEA violations or 
complaints regarding noncompliance with MHPAEA that concern NQTLs, and 
any other instances in which the DOL determines appropriate. Based on 
its prior experience and current funding, DOL expects to request 100 
comparative analyses each year.\281\ To provide DOL with their 
comparative analyses and associated documentation, DOL estimates, based 
on internal discussion, it would take a total of five hours for plans, 
with one hour for a general or operations manager and four hours for a 
business operations specialist. This would result in a total hour 
burden of 500 hours with an equivalent cost burden of $57,222 in each 
year.\282\
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    \281\ It should be emphasized, however, that DOL currently 
relies on supplemental appropriations passed as part of CAA, 2021, 
to fund these enforcement efforts. The supplemental appropriations 
are currently scheduled to expire at the end of FY 2024 with the 
consequence that DOL would lose funds for between a quarter and a 
third of its enforcement program and EBSA would have to 
commensurately reduce its staff size by approximately 120 full-time 
employees (FTEs). As a result, its MHPAEA enforcement efforts would 
necessarily decline, and the estimates of associated expenses would 
correspondingly decline.
    \282\ The burden is calculated as follows: (100 ERISA self-
insured group health plans x 1 hour for a general or operations 
manager) + (100 ERISA self-insured group health plans x 4 hours for 
a business operations specialist) = 500 hours. A labor rate of 
$132.38 is used for a general or operations manager and a labor rate 
of $109.96 is used for a business operations specialist. The labor 
rate is applied in the calculation as: (100 ERISA self-insured group 
health plans x 1 hour for a general or operations manager x $132.38) 
+ (100 ERISA self-insured group health plans x 4 hours for a 
business operations specialist x $109.96) = $57,222
---------------------------------------------------------------------------

    These proposed rules require that a plan or issuer document the 
action that has been or is being taken by the plan or issuer to 
mitigate any material differences in access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits, as required in the demonstration of comparability and 
stringency in operation requirement in Sec.  2590.712-1(c)(5)(iv) of 
these proposed rules. To meet the format, content, data, and 
documentation requirements for the comparative analysis, DOL expects 
that plans preparing their own comparative analyses would on average 
annually perform four NQTL analyses across benefit classifications, 
based on DOL's experience in reviewing comparative analyses, and 
assumes that each NQTL analysis would require 20 hours in the first 
year, with 4 hours for a general or operations manager and 16 hours for 
a business operations specialist.\283\ In the first year, this results 
in a total hour burden of 2,199,921 hours with an equivalent cost 
burden of $251,767,736.\284\ Once the comparative analyses are 
performed or documented, plans would need to update the analyses when 
making changes to the terms of the plan or coverage, including changes 
to the way NQTLs are applied to mental health and substance use 
disorder benefits. In subsequent years,

[[Page 51614]]

DOL estimates it would take a total of 10 hours annually per NQTL to 
update the analyses, with 2 hours for a general or operations manager 
and 8 hours for a business operations specialist. In subsequent years, 
this results in a total hour burden of 1,099,960 hours with an 
equivalent cost burden of $125,883,822.\285\
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    \283\ The estimated hour burden is consistent with the hour 
burden estimated in the previous PRA supporting statement for 1210-
0138. In the PRA supporting statement, the Departments estimated 
that it would take a total of 20 hours for plans to update each 
comparative analysis as required by the CAA, 2021 (https://omb.report/icr/202108-1210-015/doc/114767500). This estimate differs 
by accounting for plans needing to evaluate multiple NQTLs.
    \284\ The burden is calculated as follows: (27,499 ERISA self-
insured group health plans x 4 NQTLs x 4 hours for a general or 
operations manager) + (27,499 ERISA self-insured group health plans 
x 4 NQTLs x 16 hours for a business operations specialist) = 
2,199,921 hours. A labor rate of $132.38 is used for a general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rate is applied in the 
calculation as: (27,499 ERISA self-insured group health plans x 4 
NQTLs x 4 hours for a general or operations manager x $132.38) + 
(27,499 ERISA self-insured group health plans x 4 NQTLs x 16 hours 
for a business operations specialist x $109.96) = $251,767,736. DOL 
estimates of labor costs by occupation reflect estimates of total 
compensation and overhead costs. Estimates for total compensation 
are based on mean hourly wages by occupation from the 2021 
Occupational Employment Statistics and estimates of wages and 
salaries as a percentage of total compensation by occupation from 
the December 2021 National Compensation Survey's Employee Cost for 
Employee Compensation. Estimates for overhead costs for services are 
imputed from the 2020 Service Annual Survey. To obtain overhead cost 
on an occupational basis, the estimate allocates total industry 
overhead cost to unique occupations using a matrix of detailed 
occupational employment for each NAICS industry. All values are in 
2023 dollars.
    \285\ The burden is calculated as follows: (27,499 ERISA self-
insured group health plans x 4 NQTLs x 2 hours for a general or 
operations manager) + (27,499 ERISA self-insured group health plans 
x 4 NQTLs x 8 hours for a business operations specialist) = 
1,099,960 hours. A labor rate of $132.38 is used for a general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rate is applied in the 
calculation as: (27,499 ERISA self-insured group health plans x 4 
NQTLs x 2 hours for a general or operations manager x $132.38) + 
(27,499 ERISA self-insured group health plans x 4 NQTLs x 8 hours 
for a business operations specialist x $109.96) = $125,883,822.
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    These proposed rules would also require plans and issuers to make 
the comparative analyses and other applicable information required by 
the CAA, 2021 available upon request to participants and beneficiaries 
in plans subject to ERISA and to participants, beneficiaries, and 
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage upon 
request in connection with an appeal of an adverse benefit 
determination. The Departments estimate that each plan would l receive 
one request per covered health plan annually and that plans would 
annually incur a burden of five minutes for a clerical worker to 
prepare and send the comparative analyses to each requesting 
participant or beneficiary. This results in an hour burden of 158,192 
hours with an equivalent cost of $10,037,282.\286\ DOL also assumes 
that 58.2 percent of requests would be delivered electronically, 
resulting in a de minimis cost.\287\ The remaining 41.8 percent of 
requests would be mailed, the cost of postage for a 3-ounce letter is 
$1.14. The annual cost burden to mail the comparative analyses to the 
participants and beneficiaries is $1,499,693.\288\
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    \286\ The hour burden is estimated as: (1,488,476 fully-insured, 
non-grandfathered plans with less than 50 participants + 409,822 
ERISA-covered group health plans with 50 or more participants) x 5 
minutes = 158,192 hours. A labor rate of $63.45 is used for a 
clerical worker. The labor rate is applied in the calculation as: 
(1,488,476 fully-insured, non-grandfathered plans with less than 50 
participants + 409,822 ERISA-covered group health plans with 50 or 
more participants) x 5 minutes x $63.45 = $10,037,282.
    \287\ According to data from the National Telecommunications and 
Information Agency (NTIA), 40.0 percent of individuals age 25 and 
over have access to the internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt 
out of electronic disclosure that are automatically enrolled (for a 
total of 33.6 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 40.4 percent of individuals age 
25 and over have access to the internet outside of work. According 
to a Pew Research Center survey, 61.0 percent of internet users use 
online banking, which is used as the proxy for the number of 
internet users who will affirmatively consent to receiving 
electronic disclosures (for a total of 24.7 percent receiving 
electronic disclosure outside of work). Combining the 33.6 percent 
who receive electronic disclosure at work with the 24.7 percent who 
receive electronic disclosure outside of work produces a total of 
58.2 percent who will receive electronic disclosure overall.
    \288\ The Departments assume one request per entity and that 
each mailed response will cost $1.89 in materials and postage, on 
average. The mailing and postage cost assume $.05 per printed page, 
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost burden is calculated as follows: 
(1,488,476 fully-insured, non-grandfathered plans with less than 50 
participants + 409,822 ERISA-covered group health plans with 50 or 
more participants) x 41.8% x ($1.14 + (15 pages x $0.05)) = 
$1,499,693.
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2.1.4. Recordkeeping Requirement
    The Departments posit that plans and issuers already maintain 
records as part of their regular business practices. Further, ERISA 
section 107 includes a general six-year retention requirement. For 
these reasons the Departments estimate a minimal additional burden. The 
Departments estimate that, on average, any additional recordkeeping 
requirements would take clerical personnel five minutes annually. This 
results in an hour burden of 158,192 hours with an equivalent cost of 
$10,037,282.\289\
---------------------------------------------------------------------------

    \289\ The hour burden is estimated as: (1,488,476 fully-insured, 
non-grandfathered plans with less than 50 participants + 409,822 
ERISA-covered group health plans with 50 or more participants) x 5 
minutes = 158,192 hours. A labor rate of $63.45 is used for a 
clerical worker. The labor rate is applied in the calculation as: 
(1,488,476 fully-insured, non-grandfathered plans with less than 50 
participants + 409,822 ERISA-covered group health plans with 50 or 
more participants) x 5 minutes x $63.45 = $10,037,282.
---------------------------------------------------------------------------

2.1.5. Overall Summary
    In summary, the total burden, including that associated with prior 
requirements and by these proposed rules, has a three-year average hour 
burden of 1,883,110 hours with an equivalent cost of 205,897,135 and a 
cost burden of $2,182,094.
    A summary of paperwork burden estimates follows:
    Type of Review: Revision.
    Agency: Employee Benefits Security Administration, U.S. Department 
of Labor; Internal Revenue Service, U.S. Department of the Treasury.
    Title: MHPAEA Notices.
    OMB Control Number: 1210-0138.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions.
    Estimated Number of Respondents: 2,646,306.
    Estimated Number of Annual Responses: 2,646,306.
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: 1,883,110 (941,555 for DOL, 
941,555 for Treasury).
    Estimated Total Annual Burden Cost: $2,182,094 ($1,091,047 for DOL, 
$1,091,047 for Treasury).
2.2. Paperwork Reduction Act--Department of HHS
    As part of its continuing effort to reduce paperwork and respondent 
burden, HHS conducts a preclearance consultation program to allow the 
general public and Federal agencies to comment on proposed and 
continuing collections of information in accordance with the Paperwork 
Reduction Act of 1995 (PRA).\290\ This helps to ensure that the public 
understands HHS's collection instructions, respondents can provide the 
requested data in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and HHS can properly assess the impact of collection 
requirements on respondents.
---------------------------------------------------------------------------

    \290\ 44 U.S.C. 3506(c)(2)(A) (1995).
---------------------------------------------------------------------------

    Currently, HHS is soliciting comments concerning the proposed 
(revised) information collection request (ICR) included in the Non-
Quantitative Treatment Limitation Analyses and Compliance Under MHPAEA 
and the proposed (revised) ICR included in the Compliance with 
Individual and Group Market Reforms under title XXVII of the Public 
Health Service Act. To obtain a copy of either ICR, contact the PRA 
addressee shown below or go to https://www.RegInfo.gov.
    HHS has submitted a copy of these proposed rules to OMB in 
accordance with 44 U.S.C. 3507(d) for review of its information 
collections. HHS and OMB are particularly interested in comments that:
     Evaluate whether the collection of information is 
necessary for the functions of the agency, including whether the 
information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated,

[[Page 51615]]

electronic, mechanical, or other technological collection techniques or 
other forms of information technology (e.g., permitting electronically 
delivered responses).
    Commenters may send their views on HHS PRA analysis in the same way 
they send comments in response to the NPRM as a whole (e.g., through 
the www.regulations.gov website), including as part of a comment 
responding to the broader NPRM.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections, please visit CMS's website at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.
2.2.1. Amendments to Existing MHPAEA Regulations (45 CFR 146.136)
    The proposed amendments to the existing MHPAEA regulations would 
add new definitions, amend existing definitions, clarify the rules for 
NQTLs, amend existing examples of NQTLs, and add new examples of NQTLs, 
providing clarity to the regulated community. The proposed amendments 
would also clarify that mental health and substance use disorder 
definitions must be consistent with generally recognized standards of 
care and would add more specificity as to what conditions or disorders 
plans and issuers would be required to treat as mental health 
conditions and substance use disorders.
2.2.2. New Regulations (45 CFR 146.137)
    These proposed rules set forth content and data requirements for 
the NQTL comparative analyses required by MHPAEA as amended by the CAA, 
2021, clarify when the comparative analyses need to be performed, and 
outline the timeframes and process for plans and issuers to provide 
their comparative analyses to the Departments or an applicable State 
authority upon request. These proposed rules would also require plans 
and issuers to collect and evaluate relevant data as part of each 
comparative analysis, including but not limited to claims denials, data 
relevant to NQTLs as required by State law or private accreditation 
standards, utilization rates, network adequacy metrics, and provider 
reimbursement rates, in fulfillment of the existing requirement that 
they evaluate and document their evaluation as part of the analysis of 
the application of NQTLs related to network composition and provider 
reimbursement. As discussed above, HHS enforces applicable provisions 
of Title XXVII of the PHS Act, including the provisions added by 
MHPAEA, with respect to health insurance issuers offering group and 
individual health insurance coverage in States that elect not to 
enforce or fail to substantially enforce MHPAEA or another PHS Act 
provision and therefore HHS is accounting for this portion of the 
burden in their analysis, in addition to accounting for the burden on 
sponsors of non-Federal governmental plans.
2.2.3. Burden Estimates for Both Existing Requirements and Proposed 
Requirements
    Issuers offering individual or group health insurance coverage 
usually have multiple products offered in multiple States. HHS 
estimates a total of 476 issuers offering individual and group health 
coverage nationwide, with 1,500 issuer/State combinations offering 
coverage in multiple States.
    These proposed rules require that health insurance issuers offering 
group health insurance coverage make their comparative analyses 
available upon request by HHS. The CAA, 2021 requires HHS to collect 
not fewer than 20 comparative analyses per year, but it also provides 
that HHS shall request that a group health plan or issuer submit the 
comparative analyses for plans that involve potential MHPAEA violations 
or complaints regarding noncompliance with MHPAEA that concern NQTLs, 
and any other instances in which HHS determines appropriate. Thus, HHS 
expects to request at least 20 comparative analyses each year. HHS 
estimates that to provide the comparative analyses and associated 
documentation, it would take a total of 5 hours for each plan or 
issuer, with 1 hour for a general or operations manager and 4 hours for 
a business operations specialist. This would result in a total hour 
burden of 100 hours with an equivalent cost burden of $11,444 in each 
year.\291\ HHS seeks comment on the average number of NQTLs for plans 
offered by non-Federal governmental plans and issuers.
---------------------------------------------------------------------------

    \291\ The burden is calculated as follows: (20 plans and issuers 
x 1 hour for a general or operations manager) + (20 plans and 
issuers x 4 hours for a business operations specialist) = 100 hours. 
A labor rate of $132.38 is used for a general or operations manager 
and a labor rate of $109.96 is used for a business operations 
specialist. The labor rate is applied in the calculation as: (20 
plans and issuers x 1 hour for a general or operations manager x 
$132.38) + (20 plans and issuers x 4 hours for a business operations 
specialist x $109.96) = $11,444.
---------------------------------------------------------------------------

    These proposed rules would require that issuers document the action 
that has been or is being taken by the issuer to mitigate any material 
differences in access to mental health and substance use disorder 
benefits as compared to medical/surgical benefits, as required by 45 
CFR 146.137(c)(5)(iv). To meet the proposed new content and data, and 
documentation requirements for the comparative analyses, HHS expects 
that each issuer will on average annually perform 8 NQTL comparative 
analyses, based on the Departments' experience in reviewing comparative 
analyses, and assumes that each NQTL comparative analysis would require 
20 hours in the first year, with 4 hours for a general or operations 
manager and 16 hours for a business operations specialist. In the first 
year, this would result in a total hour burden of 240,000 hours with an 
equivalent cost burden of $27,466,560.\292\ Once the comparative 
analyses are performed or documented, issuers would need to update the 
analyses when making changes to the terms of the plan or coverage, 
including changes to the way NQTLs are applied to mental health and 
substance use disorder benefits. In subsequent years, HHS estimates it 
would take a total of 10 hours annually to update the analyses, with 2 
hours for a general or operations manager and 8 hours for a business 
operations specialist. In subsequent years, this would result in a 
total hour burden of 120,000 hours with an equivalent cost burden of 
$13,733,280.\293\
---------------------------------------------------------------------------

    \292\ The burden is estimated as follows: (1,500 issuers x 8 
NQTLs x 4 hours for a general or operations manager) + (1,500 
issuers x 8 NQTLs x 16 hours for a business operations specialist) = 
240,000 hours. A labor rate of $132.38 is used for general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rates are applied in the 
calculation as: (1,500 issuers x 8 NQTLs x 4 hours for a general or 
operations manager x $132.38) + (1,500 issuers x 8 NQTLs x 16 hours 
for a business operations specialist x $109.96) = $27,466,560.
    \293\ The burden is estimated as follows: (1,500 issuers x 8 
NQTLs x 2 hours for a general or operations manager) + (1,500 
issuers x 8 NQTLs x 8 hours for a business operations specialist) = 
120,000 hours. A labor rate of $132.38 is used for general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rates are applied in the 
calculation as: (1,500 issuers x 8 NQTLs x 2 hours for a general or 
operations manager x $132.38) + (1,500 issuers x 8 NQTLs x 2 hours 
for a business operations specialist x $109.96) = $13,733,280.
---------------------------------------------------------------------------

    Sponsors of self-funded, non-Federal governmental plans are 
responsible for performing and documenting their NQTL comparative 
analyses. HHS estimates that there are 33,076 self-funded, non-Federal 
governmental health plans.\294\ To meet the proposed

[[Page 51616]]

new, content, data, and documentation requirements for NQTL comparative 
analyses, HHS expects that each plan sponsor would on average annually 
perform 4 NQTL analyses and assumes that each NQTL comparative analysis 
would require a total of 20 hours in the first year, with 4 hours for a 
general or operations manager and 16 hours for a business operations 
specialist. In the first year, this would result in a total hour burden 
of 2,646,080 hours with an equivalent cost burden of $302,827,980.\295\ 
Once the comparative analyses are performed or documented, plan 
sponsors would need to update the analyses when making changes to the 
terms of the plan or coverage, including changes to the way NQTLs are 
applied to mental health and substance use disorder benefits. In 
subsequent years, HHS estimates it would take a total of 10 hours 
annually to update the analyses, 2 hours for a general or operations 
manager and 8 hours for a business operations specialist. In subsequent 
years, this would result in a total hour burden of 1,323,040 hours with 
an equivalent cost burden of approximately $151,413,990.\296\
---------------------------------------------------------------------------

    \294\ Based on the 2017 Census of Governments, there are 90,126 
non-Federal governmental health plans. Based on the 2021 Medical 
Expenditure Panel Survey, the Department estimates that 36.7 percent 
of non-Federal governmental health plans are self-funded. Thus, 
90,126 plans x 36.7 percent = 33,076 self-funded, non-Federal 
governmental health plans.
    \295\ The burden is estimated as follows: (33,076 self-funded 
non-Federal governmental plans x 4 NQTLs x 4 hours for a general or 
operations manager) + (33,076 self-funded non-Federal governmental 
plans x 4 NQTLs x 16 hours for a business operations specialist) = 
2,646,080 hours. A labor rate of $132.38 is used for general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rates are applied in the 
calculation as: (33,076 self-funded non-Federal governmental plans x 
4 NQTLs x 4 hours for a general or operations manager x $132.38) + 
(33,076 self-funded non-Federal governmental plans x 4 NQTLs x 16 
hours for a business operations specialist x $109.96) = 
$302,827,980.
    \296\ The burden is estimated as follows: (33,076 self-funded 
non-Federal governmental plans x 4 NQTLs x 2 hours for a general or 
operations manager) + (33,076 self-funded non-Federal governmental 
plans x 4 NQTLs x 8 hours for a business operations specialist) = 
1,323,040 hours. A labor rate of $132.38 is used for general or 
operations manager and a labor rate of $109.96 is used for a 
business operations specialist. The labor rates are applied in the 
calculation as: (33,076 self-funded non-Federal governmental plans x 
4 NQTLs x 2 hours for a general or operations manager x $132.38) + 
(33,076 self-funded non-Federal governmental plans x 4 NQTLs x 8 
hours for a business operations specialist x $109.96) = 
$151,413,990.
---------------------------------------------------------------------------

    These proposed rules would also require plans and issuers to make 
the comparative analyses and other applicable information required by 
the CAA, 2021 available upon request to participants and beneficiaries 
in plans subject to ERISA and to participants, beneficiaries, and 
enrollees in all non-grandfathered group health plans and non-
grandfathered group or individual health insurance coverage upon 
request in connection with an appeal of an adverse benefit. HHS 
estimates that each non-Federal governmental plan and each issuer would 
receive one request annually and that plans and issuers would annually 
incur a burden of 5 minutes for a clerical worker to prepare and send 
the comparative analyses to each requesting participant, beneficiary, 
or enrollee. This would result in a total burden of approximately 7,636 
hours annually with an equivalent cost of approximately $484,504.\297\ 
HHS also assumes that 58.2 percent of requests would be delivered 
electronically, resulting in a de minimis cost.\298\ The remaining 41.8 
percent of requests would be mailed, and the cost of postage for a 3-
ounce letter is $1.14. The annual cost burden to mail the comparative 
analyses to the participants and beneficiaries would therefore be 
approximately $72,386.\299\
---------------------------------------------------------------------------

    \297\ The hour burden is calculated as (90,126 non-Federal 
governmental plans + 1,500 issuer/State combinations) x 5 minutes = 
7,636 hours. A labor rate of $63.45 is used for a clerical worker. 
The labor rate is applied in the calculation as: (90,126 non-Federal 
governmental plans + 1,500 issuer/State combinations) x 5 minutes x 
$63.45 = $484,504.
    \298\ According to data from the National Telecommunications and 
Information Agency (NTIA), 40.0 percent of individuals age 25 and 
over have access to the internet at work. According to a Greenwald & 
Associates survey, 84 percent of plan participants find it 
acceptable to make electronic delivery the default option, which is 
used as the proxy for the number of participants who will not opt-
out of electronic disclosure that are automatically enrolled (for a 
total of 33.6 percent receiving electronic disclosure at work). 
Additionally, the NTIA reports that 40.4 percent of individuals age 
25 and over have access to the internet outside of work. According 
to a Pew Research Center survey, 61.0 percent of internet users use 
online banking, which is used as the proxy or the number of internet 
users who will affirmatively consent to receiving electronic 
disclosures (for a total of 24.7 percent receiving electronic 
disclosure outside of work). Combining the 33.6 percent who receive 
electronic disclosure at work with the 24.7 percent who receive 
electronic disclosure outside of work produces a total of 58.2 
percent who will receive electronic disclosure overall.
    \299\ The Departments assume one request per entity and that 
each mailed response will cost $1.89 in materials and postage, on 
average. The mailing and postage cost assume $.05 per printed page, 
an average document length of 15 pages and $1.14 in postage for a 3-
ounce parcel. Therefore, the cost burden is calculated as follows: 
(1,500 issuers + 90,126 non-Federal governmental health plans) x 
41.8% x ($1.14 + (15 pages x $0.05)) = $72,386.
---------------------------------------------------------------------------

2.2.4. Recordkeeping Requirement
    HHS posits that plans and issuers already maintain records as part 
of their regular business practices. HHS therefore estimates a minimal 
additional burden associated with these proposed rules. HHS estimates 
that each non-Federal governmental plan and issuer would annually incur 
a burden of 5 minutes, on average, for clerical personnel to meet the 
additional recordkeeping requirements, resulting in a total burden of 
approximately 7,636 hours annually with an equivalent cost of 
approximately $484,504.\300\
---------------------------------------------------------------------------

    \300\ The hour burden is calculated as (90,126 non-Federal 
governmental plans + 1,500 issuer/State combinations) x 5 minutes = 
7,636 hours. A labor rate of $63.45 is used for a clerical worker. 
The labor rate is applied in the calculation as: (90,126 non-Federal 
governmental plans + 1,500 issuer/State combinations) x 5 minutes x 
$63.45 = $484,504.
---------------------------------------------------------------------------

    HHS will revise the information collection approved under OMB 
Control Number 0938-1393 to account for this burden.\301\
---------------------------------------------------------------------------

    \301\ CMS-10773, ``Non-Quantitative Treatment Limitation 
Analyses and Compliance Under MHPAEA.''
---------------------------------------------------------------------------

2.2.5. ICRs Regarding the Self-Funded, Non-Federal Governmental Plan 
Opt-Out Provisions (45 CFR 146.180)
2.2.5.1. Notice to Federal Government of Self-Funded, Non-Federal 
Governmental Plan Opt-Out: Plan Burden Reduction--Preparation and 
Processing of Opt-Out Election Notice
    The proposed amendments to implement the CAA, 2023 provision that 
sunsets the MHPAEA opt-out election for sponsors of self-funded, non-
Federal governmental plans would eliminate the need for sponsors to 
submit a notice to the Federal Government regarding their plan's opt-
out election (or, for sponsors of multiple plans, their plans' opt-out 
elections), as long as the sponsors do not elect to permissibly opt out 
of other requirements.\302\ Based on the HIPAA opt-out filings, HHS 
estimates that the sponsors of 185 plans would no longer be required to 
submit a notice to the Federal Government regarding their plan's opt-
out election (or, for sponsors of multiple plans, notices regarding 
their plans' opt-out elections). Previously, HHS estimated that for 
each self-funded, non-Federal governmental plan whose sponsor has 
elected to opt out of the requirements, a compensation and benefits 
manager would need 15 minutes annually to fill out and electronically 
submit the model notification form to HHS, with an equivalent cost of 
approximately $34.\303\ Therefore, these proposed amendments would 
result in a total annual burden reduction (related to the need to 
submit

[[Page 51617]]

a notice to the Federal Government) for sponsors of 185 plans of 46 
hours (at a wage rate of $137.64 per hour), with an equivalent annual 
cost savings of approximately $6,331.\304\
---------------------------------------------------------------------------

    \302\ Based on the HIPAA opt-out filings, sponsors of 46 self-
funded, non-Federal governmental plans permissibly opt out of other 
requirements (standards relating to benefits for mothers and 
newborns, required coverage for reconstructive surgery following 
mastectomies, and/or coverage of dependent students on medically 
necessary leave of absence).
    \303\ This includes the time required by the individual signing 
the certification to conduct a thorough review of the election 
contents.
    \304\ The total annual burden reduction is calculated as: 185 
plans x 15 minutes = 46 hours. A labor rate of $137.64 is used for a 
compensation and benefits manager. The labor rate is applied in the 
calculation as: 185 plans x 15 minutes x $137.64 = $6,331.
---------------------------------------------------------------------------

    These proposed amendments would also generate cost savings for the 
Federal Government, as HHS would no longer have to process the opt-out 
notices submitted by plan sponsors. The processing of the opt-out 
notices is performed by an HHS employee. The average salary of the 
employee who completes this task, which includes the locality pay 
adjustment for the area of Washington-Baltimore-Arlington, is $53.67 
per hour for a GS-13, step 1 employee.\305\ HHS estimates that on 
average it takes an HHS employee 15 minutes to process an opt-out 
notice submitted by a plan sponsor, with an equivalent cost of 
approximately $13. Because sponsors of 185 plans in total would no 
longer be required to submit a notice to the Federal Government on 
behalf of their plan(s), this proposed provision would therefore result 
in a total annual burden reduction for the Federal Government of 46 
hours, with equivalent annual cost savings of approximately 
$2,469.\306\
---------------------------------------------------------------------------

    \305\ See Office of Personnel Management 2023 General Schedule 
(GS) Locality Pay Tables, available at: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2023/DCB_h.pdf.
    \306\ The total annual burden reduction for the Federal 
government is calculated as: 185 plans x 15 minutes = 46 hours. A 
labor rate of $53.67 is used for an HHS employee. The labor rate is 
applied in the calculation as: 185 plans x 15 minutes x $53.67 = 
$2,469.
---------------------------------------------------------------------------

2.2.5.2. Notice to Plan Participants of Self-Funded, Non-Federal 
Governmental Plan Opt-Out: Plan Burden Reduction--Preparation and 
Processing of Opt-Out Election Notice
    The proposed amendments to implement the CAA, 2023 provision that 
sunsets the MHPAEA opt-out election for sponsors of self-funded non-
Federal governmental plans would also eliminate the need for those 
sponsors to prepare and disseminate an opt-out notice to plan 
participants regarding their plan sponsors' opt-out election, as long 
as the sponsors do not elect to permissibly opt out of other 
requirements. Previously, HHS estimated that for each self-funded, non-
Federal governmental plan whose sponsor has elected to opt out of the 
requirements, an administrative assistant would need 15 minutes to 
develop and update the HHS standardized disclosure statement annually, 
with an equivalent cost of approximately $10. Therefore, this proposed 
provision would result in a total annual burden reduction (related to 
the need to prepare and disseminate opt-out notices to plan 
participants) for sponsors of 185 plans of 46 hours (at a wage rate of 
$41.74), with an equivalent annual cost savings of approximately 
$1,920.\307\ Further, self-funded, non-Federal governmental plan 
sponsors would no longer be required to print and mail the opt-out 
notice to plan participants and would therefore no longer incur costs 
associated with this requirement. As noted earlier in this section 
1.5.1, HHS estimates that there are approximately 253 participants in 
each self-funded, non-Federal governmental plan, and therefore 
approximately 46,863 notices \308\ would no longer have to be printed 
and mailed. Because plan sponsors would no longer need to print the 1-
page notice (at an estimated cost of $0.05 per page), plan sponsors 
would experience a total cost savings of approximately $2,343.\309\
---------------------------------------------------------------------------

    \307\ The total annual burden reduction is calculated as: 185 
plans x 15 minutes = 46 hours. A labor rate of $41.74 is used for an 
administrative assistant. The labor rate is applied in the 
calculation as: 185 plans x 15 minutes x $41.74 = $1,920.
    \308\ 185 plans x slightly more than 253 participants per plan 
on average [ap]46,863 notices in total.
    \309\ The total cost savings is calculated as: 46,863 notices x 
$0.05 = $2,343.
---------------------------------------------------------------------------

    The burden related to HIPAA opt-outs is currently approved under 
OMB Control Number 0938-0702.\310\ HHS will update the information 
collection to account for this burden reduction.
---------------------------------------------------------------------------

    \310\ CMS-10430, ``Information Collection Requirements for 
Compliance with Individual and Group Market Reforms under Title 
XXVII of the Public Health Service Act.''
---------------------------------------------------------------------------

2.2.6. Overall Summary
    In summary, the total new burden imposed by these proposed rules 
regarding NQTL comparative analyses and compliance, has a three-year 
average hour burden of approximately 1,939,425 hours with an equivalent 
cost of approximately $221,176,812 and a total cost burden of 
approximately $72,386. The proposed amendments to implement the CAA, 
2023 provision that sunsets the MHPAEA opt-out election for sponsors of 
self-funded, non-Federal governmental plans would result in an annual 
burden reduction of approximately 92 hours with an equivalent annual 
cost savings of approximately $8,251.
    A summary of the change in paperwork burden estimates follows:
    Type of Review: Revision.
    Agency: Centers for Medicare & Medicaid Services, U.S. Department 
of Health and Human Services.
    Title: Non-Quantitative Treatment Limitation Analyses and 
Compliance Under MHPAEA.
    OMB Control Number: 0938-1393.
    Affected Public: Businesses or other for-profits, Not-for-profit 
institutions, State, Local, or Tribal Governments.
    Estimated Number of Respondents: 91,626.
    Estimated Number of Annual Responses: 91,626.
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: 1,939,425.
    Estimated Total Annual Burden Cost: $72,386.
    Title: Requirements for Compliance with Individual and Group Market 
Reforms under Title XXVII of the Public Health Service Act.
    OMB Control Number: 0938-0702.
    Affected Public: State, Local, or Tribal Governments.
    Estimated Number of Respondents: (185).
    Estimated Number of Annual Responses: (185).
    Frequency of Response: Annual.
    Estimated Total Annual Burden Hours: (92).
    Estimated Total Annual Burden Cost: ($2,343).

    Note: Numbers in parentheses denote a burden reduction.

3. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) \311\ imposes certain 
requirements with respect to Federal rules that are subject to the 
notice and comment requirements of section 553(b) of the Administrative 
Procedure Act \312\ and are likely to have a significant economic 
impact on a substantial number of small entities. Unless an agency 
determines that a proposal is not likely to have a significant economic 
impact on a substantial number of small entities, section 603 of the 
RFA requires the agency to present an initial regulatory flexibility 
analysis of the proposed rule.
---------------------------------------------------------------------------

    \311\ 5 U.S.C. 601 et seq. (1980).
    \312\ 5 U.S.C. 551 et seq. (1946).
---------------------------------------------------------------------------

    The Departments have limited data to determine if these proposed 
amendments would have a significant impact on a substantial number of 
small entities. The Departments have prepared this initial regulatory 
flexibility analysis and request data or other information it would 
need to make a determination. The Departments request data or 
information on the number of plans and issuers that are not conducting 
adequate

[[Page 51618]]

comparative analyses and how the proposed additional guidance would 
result in better compliance and access to those benefits.
3.1. Need for and Objectives of the Rule
    As documented in the 2022 MHPAEA Report to Congress and the 2023 
MHPAEA Report to Congress,\313\ the Departments found that none of the 
NQTL comparative analyses they reviewed upon initial receipt contained 
sufficient information and documentation.
---------------------------------------------------------------------------

    \313\ 2022 MHPAEA Report to Congress, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2022-realizing-parity-reducing-stigma-and-raising-awareness.pdf; 2023 MHPAEA Report to 
Congress, available at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/report-to-congress-2023-mhpaea-comparative-analysis.pdf.
---------------------------------------------------------------------------

    The proposed amendments to the existing MHPAEA regulations would 
clarify existing definitions, add new definitions of key terms, require 
plans and issuers to determine which NQTLs apply to substantially all 
medical/surgical benefit classifications and what variation of a given 
NQTL is the predominant (that is, most common or frequent) variation, 
ensure that the application of the parity requirements to NQTLs is no 
more restrictive for mental health and substance use disorder benefits 
than for medical/surgical benefits, and provide additional examples of 
the application of MHPAEA to NQTLs to improve the understanding and 
ability of the regulated community to comply with MHPAEA. The proposed 
amendments would also clarify that mental health and substance use 
disorder definitions must be consistent with generally recognized 
independent standards of current medical practice and would add more 
specificity as to what plans and issuers must treat as mental health 
conditions or substance use disorders.
    These proposed rules would amend existing guidance, set more 
specific content requirements for comparative analyses required by the 
CAA, 2021, clarify when a comparative analysis needs to be performed 
and for which NQTLs, and outline the process for plans and issuers to 
provide their comparative analyses to the Departments upon request. 
These proposed rules would also require plans and issuers to collect 
and evaluate relevant data with each comparative analysis requested by 
the Departments, including but not limited to claims denials, data 
relevant to NQTLs as required by State law or private accreditation 
standards, utilization rates, network adequacy metrics, and provider 
reimbursement rates, in fulfillment of the existing requirement that 
they evaluate and document their evaluation as part of the analysis of 
the application of NQTLs related to network composition and provider 
reimbursement. The data would be further defined in future guidance, 
which will allow the Departments to adjust the data requirements as 
needed to account for enforcement experience and industry trends. The 
Departments also anticipate that future guidance would also set forth 
an enforcement safe harbor for NQTLs related to network composition for 
plans and issuers that meet certain standards with the data they 
submit.
    The Departments expect that these proposed rules would result in 
plans and issuers having a better understanding of the MHPAEA 
requirements with respect to NQTLs. These proposed rules would also 
improve the manner in which parity is measured, compared, and 
demonstrated by plans and issuers. The Departments believe these 
proposed rules and future guidance would improve the compliance of 
plans and issuers with these requirements, resulting in greater access 
to and utilization of treatment for mental health and substance use 
disorders, as intended by MHPAEA.
3.2. Affected Small Entities
    For purposes of analysis under the RFA, DOL considers employee 
benefit plans with fewer than 100 participants to be small entities. 
The basis of this definition is found in section 104(a)(2) of ERISA, 
which permits the Secretary of Labor to prescribe simplified annual 
reports for plans that cover fewer than 100 participants. Under section 
104(a)(3) of ERISA, the Secretary may also provide for exemptions or 
simplified annual reporting and disclosure for welfare benefit plans. 
Pursuant to the authority of section 104(a)(3), DOL has previously 
issued (see 29 CFR 2520.104-20, 2520.104-21, 2520.104-41, 2520.104-46, 
and 2520.104b-10) simplified reporting provisions and limited 
exemptions from reporting and disclosure requirements for small plans, 
including unfunded or insured welfare plans, that cover fewer than 100 
participants and satisfy certain requirements. While some large 
employers have small plans, small plans are maintained generally by 
small employers. Thus, the Departments believe that assessing the 
impact of these proposed rules on small plans is an appropriate 
substitute for evaluating the effect on small entities. The definition 
of small entity considered appropriate for this purpose differs, 
however, from a definition of small business based on size standards 
promulgated by the Small Business Administration (SBA) pursuant to the 
Small Business Act.
    As discussed in subsection 1.5.1 of the RIA, these proposed rules 
would affect all small ERISA-covered group health plans, including 
fully-insured group health plans and self-insured group health plans, 
as well as small health insurance issuers and non-Federal governmental 
plans. The Departments estimate that these proposed rules would affect 
approximately 114,200 fully insured plans with 50 to 100 
participants,\314\ and approximately 1,488,000 fully insured, non-
grandfathered plans with less than 50 participants.\315\
---------------------------------------------------------------------------

    \314\ The Departments estimate that there are 152,254 ERISA-
covered group health plans with 50 to 100 participants based on the 
2021 Medical Expenditure Survey--Insurance Component (MEPS-IC) and 
the 2019 County Business Patterns from the Census Bureau. The 
Departments also estimate that 75 percent of ERISA-covered group 
health plans with 50 to 100 participants are fully insured based on 
assumptions referencing this same data. Thus, the Departments have 
calculated the number of fully insured plans with 50 to 100 
participants in the following manner: 152,254 ERISA-covered group 
health plans with 50 to 100 participants x 75% = 114,191.
    \315\ Employers with less than 50 employees are required to 
comply with MHPAEA as part of the Essential Health Benefits 
requirements. The Departments estimate that there are 2,134,934 
ERISA-covered group health plans with less than 50 participants 
based on data from the 2021 MEPS-IC and the 2019 County Business 
Patterns from the Census Bureau. The Departments also estimate that 
83 percent of group health plans with less than 50 participants are 
fully insured based on data from the 2021 MEPS-IC. The 2020 Kaiser 
Employer Health Benefits Survey reported that in 2020, 16 percent of 
firms offering health benefits offered at least one grandfathered 
health plan, therefore, the Departments assume the percent of firms 
offering at least one non-grandfathered health plan is 84% (100% 
minus 16%). (Source: KFF. 2020 Kaiser Employer Health Benefits 
Survey.) https://files.kff.org/attachment/Report-Employer-Health-Benefits-2020-Annual-Survey.pdf). Thus, the Departments have 
calculated the number of fully insured, non-grandfathered plans with 
less than 50 participants in the following manner: 2,134,934 small 
ERISA-covered group health plans x 83% x 84% = 1,488,475.
---------------------------------------------------------------------------

    The Departments also estimate that approximately 38,000 self-
insured group health plans with 50 to 100 participants would be 
affected by these proposed rules.\316\ The Departments estimate that

[[Page 51619]]

approximately 27,000 self-insured group health plans would not utilize 
a service provider, and would incur the cost directly,\317\ and the 
other self-insured health plans would utilize service providers to 
perform the analysis. The largest would need to conduct the analyses 
themselves for their plan-specific design. Finally, the Departments 
estimate that approximately 14,400 non-Federal governmental health 
plans would be affected by these proposed rules, of which the majority 
of plans are assumed to be large.\318\
---------------------------------------------------------------------------

    \316\ MHPAEA only applies to ERISA plans in the group market 
with 50 or more participants that offer mental health or substance 
use disorder benefits. The Departments have not identified what 
share of plans with 50 or more participants offer mental health or 
substance use disorder benefits and so have assumed that all of 
these plans offer them. The Departments seeks comments on this 
assumption. Based on the 2021 MEPS-IC, 25 percent of ERISA-covered 
group health plans with 50 to 100 participants are self-insured. 
Thus, the Departments calculate the number of self-insured group 
health plans with 50 to 100 participants based on the following 
manner: 152,254 ERISA-covered group health plans with less than 100 
participants x 25% of ERISA-covered group health plans with 50 to 
100 participants are self-insured = 38,064.
    \317\ Based on the 2020 Form 5500, 89 percent of self-insured 
plans filed a Schedule C and indicated using either a Claims 
Processor, Contract Administrator, or both.
    \318\ Based on the 2017 Census of Government, there are 90,126 
State and local entities. The Departments assume that there is one 
plan per entity, on average. Therefore, the Departments estimate 
that there are 90,126 non-Federal governmental health plans. MHPAEA 
applies to non-Federal governmental employers with 50 or more 
employees that offer mental health or substance use disorder 
benefits. The Departments have not identified what share of plans 
with 50 or more participants offer mental health or substance use 
disorder benefits and so has have assumed that all of these plans 
offer them. The Departments seek comments on this assumption. Based 
on the 2021 Medical Expenditure Survey Insurance Component (MEPS-IC) 
and the 2019 County Business Patterns from the Census Bureau, 16 
percent of ERISA-covered group health plans have 50 or more 
participants. The Departments use the percent of ERISA-covered group 
plans with more than 50 participants as a proxy for the percent of 
non-Federal governmental plans with more than 50 participants. 
Therefore, the Departments estimate there are 14,420 public, non-
Federal employer group health plans with 50 or more participants 
that offer mental health or substance use disorder benefits (90,126 
non-Federal governmental health plans x 16 percent of plans with 50 
or more employees).
---------------------------------------------------------------------------

    As discussed in subsection 1.5.3 of the RIA, these proposed rules 
would also affect health insurance issuers. The Departments estimate 
that these proposed rules would affect 476 health insurance issuers 
providing mental health and substance use disorder benefits in the 
group and individual health insurance markets, with 1,500 issuer/State 
combinations offering coverage in multiple States.\319\
---------------------------------------------------------------------------

    \319\ The Departments' estimate of the number of health 
insurance insurers and the number of issuer/State combinations is 
based on medical loss ratio reports submitted by issuers for the 
2021 reporting year. (Source: Centers for Medicare & Medicaid 
Services. ``Medical Loss Ratio Data and System Resources'' (2021). 
https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.)
---------------------------------------------------------------------------

    Health insurance issuers are generally classified under the North 
American Industry Classification System (NAICS) code 524114 (Direct 
Health and Medical Insurance Carriers). According to SBA size 
standards, entities with average annual receipts of $47 million or less 
are considered small entities for this NAICS code.\320\ The Departments 
expect that few, if any, insurance companies underwriting health 
insurance policies fall below these size thresholds. Based on data from 
medical loss ratio (MLR) annual report submissions for the 2021 MLR 
reporting year, approximately 87 out of 483 issuers of health insurance 
coverage nationwide had total premium revenue of $47 million or 
less.\321\ However, it should be noted that over 77 percent of these 
small companies belong to larger holding groups, and many, if not all, 
of these small companies, are likely to have non-health lines of 
business that would result in their revenues exceeding $47 million. To 
produce a conservative estimate, for the purposes of this analysis, the 
Departments assume 8.6 percent,\322\ or 129 issuer/State combinations 
are considered small entities.\323\
---------------------------------------------------------------------------

    \320\ Available at: https://www.sba.gov/document/support--table-size-standards, as of March 2023.
    \321\ Available at: https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
    \322\ Based on data from the NAICS Association for NAICS code 
524114, the Departments estimate the percent of businesses within 
the industry of Direct Health and Medical Insurer Carriers with less 
than $47 million in annual sales. (See NAICS Association. ``Market 
Analysis Profile: NAICS Code Annual Sales.'' https://www.naics.com/business-lists/counts-by-naics-code/.)
    \323\ 1,500 issuers/State combination x 8.6 percent = 129 small 
issuers.
---------------------------------------------------------------------------

    The proposed amendments to implement the CAA, 2023 provision that 
sunsets the MHPAEA opt-out election would affect sponsors of self-
funded, non-Federal governmental plans, some of which might be small 
entities. As noted in section 1.10 of this RIA, the extent to which 
these plans are out of compliance is unknown, and the costs for them to 
come into compliance are expected to vary from plan to plan. HHS seeks 
comments on the number of small entities that would be impacted by the 
implementation of the sunset provision and the potential effects on 
small entities.
3.3. Impact of the Rule
3.3.1. Amendments to Existing MHPAEA Regulation (26 CFR 54.9812-1, 29 
CFR 2590.712, 45 CFR 146.136)
    The proposed amendments to the existing MHPAEA regulations would 
clarify existing definitions, add new definitions, require plans and 
issuers to determine which NQTLs apply to substantially all medical/
surgical benefit classifications and what level or variation of a given 
NQTL is the most common or frequent, ensure that the application of 
NQTLs is generally no more restrictive for mental health and substance 
use disorder benefits than for medical/surgical benefits, and provide 
additional examples of the application of MHPAEA to NQTLs to improve 
the understanding and ability of the regulated community to comply with 
MHPAEA. The proposed amendments would also clarify that mental health 
benefits and substance use disorder benefits must be defined to be 
consistent with generally recognized independent standards of current 
medical practice and would add more specificity as to what plans and 
issuers must treat as mental health conditions or substance use 
disorders. The Departments believe that the proposed amendments might 
cause small plans and issuers to revise their policies and remove 
treatment limitations. Therefore, small plans and issuers could incur 
costs to revise plan provisions which may result in increased costs 
from expanded utilization of mental health and substance use disorder 
services. The Departments face uncertainty in quantifying these costs 
as they cannot estimate the increase in utilization and which 
particular services may see the largest increase in utilization.
3.3.2. New Regulations (26 CFR 54.9812-2, 29 CFR 2590.712-1, and 45 CFR 
146.137 and 146.180)
    These proposed rules would amend existing guidance, set more 
specific content requirements for comparative analyses required by the 
CAA, 2021, clarify when the comparative analysis needs to be performed 
and for which NQTLs, and outline the timeframes and process for plans 
and issuers to provide their comparative analyses to the Departments 
upon request. Participants, beneficiaries, and enrollees may also 
request the comparative analyses at any time. These proposed rules 
would also require plans and issuers to collect and evaluate relevant 
data as part of each comparative analysis, including but not limited to 
claims denials, data relevant to NQTLs as required by State law or 
private accreditation standards, utilization rates, network adequacy 
metrics, and provider reimbursement rates, in fulfillment of the 
existing requirement that they evaluate and document their evaluation 
as part of the analysis of the application of NQTLs related to network 
composition and provider reimbursement. The Departments believe that 
plans and issuers would incur costs in collecting, preparing, and 
analyzing the data. The Departments request comments on whether plans 
and issuers already collect and examine this data. Additionally, in 
these proposed rules,

[[Page 51620]]

HHS proposes regulatory amendments to implement the provision in the 
CAA, 2023 that sunsets the election option for self-funded, non-Federal 
governmental plans to opt out of requirements under MHPAEA.
    In the first year, the Departments estimate that self-insured group 
health plans and health insurance issuers would incur an incremental 
per-entity cost of approximately $5,600 and $5,800, respectively 
associated with these proposed rules and amendments. In the subsequent 
years, the Departments estimate that self-insured group health plans 
and health insurance issuers would both incur an incremental per-entity 
cost of approximately $1,900 associated with these proposed rules and 
amendments. The Departments note that these per-entity costs are the 
average costs, and these costs are expected to vary by plan or issuer 
depending on the number of NQTL analyses performed.
3.4. Duplicate, Overlapping, or Relevant Federal Rules
    There are no duplicate, overlapping, or relevant Federal rules.
4. Special Analyses--Department of the Treasury
    Pursuant to the Memorandum of Agreement, Review of Treasury 
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory 
actions issued by the IRS are not subject to the requirements of 
section 6 of Executive Order 12866, as amended. Therefore, a regulatory 
impact assessment is not required. Pursuant to section 7805(f) of the 
Code, these regulations have been submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on their 
impact on small business.
5. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 requires each 
Federal agency to prepare a written statement assessing the effects of 
any Federal mandate in a proposed or final agency rule that may result 
in an expenditure of $100 million or more (adjusted annually for 
inflation with the base year 1995) in any 1 year by State, local, and 
Tribal governments, in the aggregate, or by the private sector.\324\ In 
2023, that threshold is approximately $177 million. For purposes of the 
Unfunded Mandates Reform Act, as well as Executive Order 12875,\325\ 
this proposal includes Federal mandates that the Departments expect 
would result in such expenditures by State, local, or Tribal 
governments, or the private sector. UMRA requires that regulations 
including such Federal mandates provide a qualitative and quantitative 
assessment of the anticipated costs and benefits of the regulations. 
For the purposes of these proposed rules, the RIA shall meet this 
obligation.
---------------------------------------------------------------------------

    \324\ 2 U.S.C. 1501 et seq. (1995).
    \325\ Enhancing the Intergovernmental Partnership, 58 FR 58093 
(Oct. 28, 1993).
---------------------------------------------------------------------------

6. Federalism Statement
    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on the States, the 
relationship between the Federal Government and States, or on the 
distribution of power and responsibilities among the various levels of 
government.\326\ Federal agencies promulgating regulations that have 
federalism implications must consult with State and local officials and 
describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to these proposed 
rules.
---------------------------------------------------------------------------

    \326\ Federalism, 64 FR 153 (Aug. 4, 1999).
---------------------------------------------------------------------------

    In the Departments' view, these proposed rules could have 
federalism implications because they would have direct effects on the 
States, on the relationship between the Federal Government and the 
States, and on the distribution of power and responsibilities among 
various levels of government. These proposed rules could also have 
federalism implications because the Departments propose to remove the 
reference to State guidelines in the definition of medical/surgical 
benefits, mental health benefits, and substance use disorder benefits, 
and amend the definition to provide that any condition or procedure 
defined by the plan or coverage as being or not being a medical 
condition or surgical procedure, mental health condition, or substance 
use disorder must be defined to be consistent with generally recognized 
independent standards of current medical practice, such as the ICD or 
DSM. Finally, these proposed rules could have federalism implications 
because the implementation of the CAA, 2023 provision that sunsets the 
MHPAEA opt-out election would require State and local government 
sponsors of self-funded plans that currently opt out of requirements 
under MHPAEA to come into compliance.
    In general, through section 514, ERISA supersedes State laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves State laws that regulate insurance, banking, or securities. 
While ERISA prohibits States from regulating a plan as an insurance or 
investment company or bank, the preemption provisions of section 731 of 
ERISA and section 2724 of the PHS Act (implemented in 29 CFR 
2590.731(a) and 45 CFR 146.143(a)) apply so that the MHPAEA 
requirements are not to be ``construed to supersede any provision of 
State law which establishes, implements, or continues in effect any 
standard or requirement solely relating to health insurance issuers in 
connection with individual or group health insurance coverage except to 
the extent that such standard or requirement prevents the application 
of a requirement'' of MHPAEA. The conference report accompanying HIPAA 
indicates that this is intended to be the ``narrowest'' preemption of 
State laws. (See House Conf. Rep. No. 104-736, at 205, reprinted in 
1996 U.S. Code Cong. & Admin. News 2018.)
    States may continue to apply State law requirements except to the 
extent that such requirements prevent the application of the MHPAEA 
requirements that are the subject of this rulemaking. State insurance 
laws that are more stringent than the Federal requirements are unlikely 
to ``prevent the application of'' MHPAEA and be preempted. Accordingly, 
States have significant latitude to impose requirements on health 
insurance issuers that are more restrictive than the Federal law.
    Throughout the process of developing these proposed rules, to the 
extent feasible within the specific preemption provisions of HIPAA as 
it applies to MHPAEA, the Departments have attempted to balance the 
States' interests in regulating health insurance issuers, and Congress' 
intent to provide uniform minimum protections to consumers in every 
State. By doing so, it is the Departments' view that they have complied 
with the requirements of Executive Order 13132.
    The Departments welcome input from affected States regarding this 
assessment.

List of Subjects

26 CFR Part 54

    Excise taxes, Pensions, Reporting and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance,

[[Page 51621]]

Medical child support, Reporting and recordkeeping requirements.

45 CFR Part 146

    Health care, Health insurance, Reporting and recordkeeping 
requirements.

45 CFR Part 147

    Aged, Citizenship and naturalization, Civil rights, Health care, 
Health insurance, Individuals with disabilities, Intergovernmental 
relations, Reporting and recordkeeping requirements, Sex 
discrimination.

Douglas W. O'Donnell,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
Xavier Becerra,
Secretary, Department of Health and Human Services.

DEPARTMENT OF THE TREASURY

Internal Revenue Service

    Accordingly, the Treasury Department and the IRS propose to amend 
26 CFR part 54 as follows:

PART 54--PENSION EXCISE TAXES

0
1. The authority citation for part 54 continues to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *

0
2. Amend Sec.  54.9812-1 by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding 
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,'' 
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and 
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in 
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and 
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A) 
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as 
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated 
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;
0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
i. Adding paragraph (j).
    The revisions and additions read as follows:


Sec.  54.9812-1  Parity in mental health and substance use disorder 
benefits.

    (a) Purpose and meaning of terms--(1) Purpose. This section and 
Sec.  54.9812-2 set forth rules to ensure parity in aggregate lifetime 
and annual dollar limits, financial requirements, and quantitative and 
nonquantitative treatment limitations between mental health and 
substance use disorder benefits and medical/surgical benefits, as 
required under Code section 9812. A fundamental purpose of Code section 
9812, this section, and Sec.  54.9812-2 is to ensure that participants 
and beneficiaries in a group health plan that offers mental health or 
substance use disorder benefits are not subject to more restrictive 
lifetime or annual dollar limits, financial requirements, or treatment 
limitations with respect to those benefits than the predominant dollar 
limits, financial requirements, or treatment limitations that are 
applied to substantially all medical/surgical benefits covered by the 
plan, as further provided in this section and Sec.  54.9812-2. 
Accordingly, in complying with the provisions of Code section 9812, 
this section, and Sec.  54.9812-2, plans must not design or apply 
financial requirements and treatment limitations that impose a greater 
burden on access (that is, are more restrictive) to mental health and 
substance use disorder benefits under the plan than they impose on 
access to generally comparable medical/surgical benefits. The 
provisions of Code section 9812, this section, and Sec.  54.9812-2 
should be interpreted in a manner that is consistent with the purpose 
described in this paragraph (a)(1).
    (2) Meaning of terms. For purposes of this section and Sec.  
54.9812-2, except where the context clearly indicates otherwise, the 
following terms have the meanings indicated:
* * * * *
    DSM means the American Psychiatric Association's Diagnostic and 
Statistical Manual of Mental Disorders. For the purpose of this 
definition, the most current version of the DSM is the version that is 
applicable no earlier than on the date that is 1 year before the first 
day of the applicable plan year.
    Evidentiary standards are any evidence, sources, or standards that 
a group health plan considered or relied upon in designing or applying 
a factor with respect to a nonquantitative treatment limitation, 
including specific benchmarks or thresholds. Evidentiary standards may 
be empirical, statistical, or clinical in nature, and include: sources 
acquired or originating from an objective third party, such as 
recognized medical literature, professional standards and protocols 
(which may include comparative effectiveness studies and clinical 
trials), published research studies, payment rates for items and 
services (such as publicly available databases of the ``usual, 
customary and reasonable'' rates paid for items and services), and 
clinical treatment guidelines; internal plan data, such as claims or 
utilization data or criteria for assuring a sufficient mix and number 
of network providers; and benchmarks or thresholds, such as measures of 
excessive utilization, cost levels, time or distance standards, or 
network participation percentage thresholds.
    Factors are all information, including processes and strategies 
(but not evidentiary standards), that a group health plan considered or 
relied upon to design a nonquantitative treatment limitation, or to 
determine whether or how the nonquantitative treatment limitation 
applies to benefits under the plan. Examples of factors include, but 
are not limited to: provider discretion in determining a diagnosis or 
type or length of treatment; clinical efficacy of any proposed 
treatment or service; licensing and accreditation of providers; claim 
types with a high percentage of fraud; quality measures; treatment 
outcomes; severity or chronicity of condition; variability in the cost 
of an episode of treatment; high cost growth; variability in cost and 
quality; elasticity of demand; and geographic location.
* * * * *
    ICD means the World Health Organization's International 
Classification of Diseases adopted by the Department of Health and 
Human Services through 45 CFR 162.1002. For the purpose of this 
definition, the most current version of the ICD is the version that is 
applicable no earlier than on the date that is 1 year before the first 
day of the applicable plan year.
    Medical/surgical benefits means benefits with respect to items or 
services for medical conditions or surgical procedures, as defined 
under the terms of the group health plan and in accordance with 
applicable Federal and State law, but does not include mental health 
benefits or substance use disorder benefits. Notwithstanding the 
preceding sentence, any condition or procedure defined by the plan as 
being

[[Page 51622]]

or as not being a medical condition or surgical procedure must be 
defined consistent with generally recognized independent standards of 
current medical practice (for example, the most current version of the 
ICD). To the extent generally recognized independent standards of 
current medical practice do not address whether a condition or 
procedure is a medical condition or surgical procedure, plans may 
define the condition or procedure in accordance with applicable Federal 
and State law.
    Mental health benefits means benefits with respect to items or 
services for mental health conditions, as defined under the terms of 
the group health plan and in accordance with applicable Federal and 
State law, but does not include medical/surgical benefits or substance 
use disorder benefits. Notwithstanding the preceding sentence, any 
condition defined by the plan as being or as not being a mental health 
condition must be defined consistent with generally recognized 
independent standards of current medical practice. For the purpose of 
this definition, to be consistent with generally recognized independent 
standards of current medical practice, the definition must include all 
conditions covered under the plan, except for substance use disorders, 
that fall under any of the diagnostic categories listed in the mental, 
behavioral, and neurodevelopmental disorders chapter (or equivalent 
chapter) of the most current version of the ICD or that are listed in 
the most current version of the DSM. To the extent generally recognized 
independent standards of current medical practice do not address 
whether a condition is a mental health condition, plans may define the 
condition in accordance with applicable Federal and State law.
    Processes are actions, steps, or procedures that a group health 
plan uses to apply a nonquantitative treatment limitation, including 
actions, steps, or procedures established by the plan as requirements 
in order for a participant or beneficiary to access benefits, including 
through actions by a participant's or beneficiary's authorized 
representative or a provider or facility. Processes include but are not 
limited to: procedures to submit information to authorize coverage for 
an item or service prior to receiving the benefit or while treatment is 
ongoing (including requirements for peer or expert clinical review of 
that information); provider referral requirements; and the development 
and approval of a treatment plan. Processes also include the specific 
procedures used by staff or other representatives of a plan (or the 
service provider of a plan) to administer the application of 
nonquantitative treatment limitations, such as how a panel of staff 
members applies the nonquantitative treatment limitation (including the 
qualifications of staff involved, number of staff members allocated, 
and time allocated), consultations with panels of experts in applying 
the nonquantitative treatment limitation, and reviewer discretion in 
adhering to criteria hierarchy when applying a nonquantitative 
treatment limitation.
    Strategies are practices, methods, or internal metrics that a plan 
considers, reviews, or uses to design a nonquantitative treatment 
limitation. Examples of strategies include but are not limited to: the 
development of the clinical rationale used in approving or denying 
benefits; deviation from generally accepted standards of care; the 
selection of information deemed reasonably necessary to make a medical 
necessity determination; reliance on treatment guidelines or guidelines 
provided by third-party organizations; and rationales used in selecting 
and adopting certain threshold amounts, professional protocols, and fee 
schedules. Strategies also include the creation and composition of the 
staff or other representatives of a plan (or the service provider of a 
plan) that deliberates, or otherwise makes decisions, on the design of 
nonquantitative treatment limitations, including the plan's decisions 
related to the qualifications of staff involved, number of staff 
members allocated, and time allocated; breadth of sources and evidence 
considered; consultations with panels of experts in designing the 
nonquantitative treatment limitation; and the composition of the panels 
used to design a nonquantitative treatment limitation.
    Substance use disorder benefits means benefits with respect to 
items or services for substance use disorders, as defined under the 
terms of the group health plan and in accordance with applicable 
Federal and State law, but does not include medical/surgical benefits 
or mental health benefits. Notwithstanding the preceding sentence, any 
disorder defined by the plan as being or as not being a substance use 
disorder must be defined consistent with generally recognized 
independent standards of current medical practice. For the purpose of 
this definition, to be consistent with generally recognized independent 
standards of current medical practice, the definition must include all 
disorders covered under the plan that fall under any of the diagnostic 
categories listed as a mental or behavioral disorder due to 
psychoactive substance use (or equivalent category) in the mental, 
behavioral and neurodevelopmental disorders chapter (or equivalent 
chapter) of the most current version of the ICD or that are listed as a 
Substance-Related and Addictive Disorder (or equivalent category) in 
the most current version of the DSM. To the extent generally recognized 
independent standards of current medical practice do not address 
whether a disorder is a substance use disorder, plans may define the 
disorder in accordance with applicable Federal and State law.
    Treatment limitations include limits on benefits based on the 
frequency of treatment, number of visits, days of coverage, days in a 
waiting period, or other similar limits on the scope or duration of 
treatment. Treatment limitations include both quantitative treatment 
limitations, which are expressed numerically (such as 50 outpatient 
visits per year), and nonquantitative treatment limitations, which 
otherwise limit the scope or duration of benefits for treatment under a 
plan. (See paragraph (c)(4)(iii) of this section for an illustrative, 
non-exhaustive list of nonquantitative treatment limitations.) A 
complete exclusion of all benefits for a particular condition or 
disorder, however, is not a treatment limitation for purposes of this 
definition.
* * * * *
    (c) * * *
    (1) * * *
    (ii) Type of financial requirement or treatment limitation. When 
reference is made in this paragraph (c) to a type of financial 
requirement or treatment limitation, the reference to type means its 
nature. Different types of financial requirements include deductibles, 
copayments, coinsurance, and out-of-pocket maximums. Different types of 
quantitative treatment limitations include annual, episode, and 
lifetime day and visit limits. See paragraph (c)(4)(iii) of this 
section for an illustrative, non-exhaustive list of nonquantitative 
treatment limitations.
* * * * *
    (2) * * *
    (i) General rule. A group health plan that provides both medical/
surgical benefits and mental health or substance use disorder benefits 
may not apply any financial requirement or treatment limitation to 
mental health or substance use disorder benefits in any classification 
that is more restrictive than the predominant financial

[[Page 51623]]

requirement or treatment limitation of that type applied to 
substantially all medical/surgical benefits in the same classification. 
Whether a financial requirement or treatment limitation is a 
predominant financial requirement or treatment limitation that applies 
to substantially all medical/surgical benefits in a classification is 
determined separately for each type of financial requirement or 
treatment limitation. A plan may not impose any financial requirement 
or treatment limitation that is applicable only with respect to mental 
health or substance use disorder benefits and not to any medical/
surgical benefits in the same benefit classification. The application 
of the rules of this paragraph (c)(2) to financial requirements and 
quantitative treatment limitations is addressed in paragraph (c)(3) of 
this section; the application of the rules of this paragraph (c)(2) to 
nonquantitative treatment limitations is addressed in paragraph (c)(4) 
of this section.
    (ii) * * *
    (A) In general. If a plan provides any benefits for a mental health 
condition or substance use disorder in any classification of benefits 
described in this paragraph (c)(2)(ii), benefits for that mental health 
condition or substance use disorder must be provided in every 
classification in which medical/surgical benefits are provided. For 
purposes of this paragraph (c)(2)(ii), a plan providing any benefits 
for a mental health condition or substance use disorder in any 
classification of benefits does not provide benefits for the mental 
health condition or substance use disorder in every classification in 
which medical/surgical benefits are provided unless the plan provides 
meaningful benefits for treatment for that condition or disorder in 
each such classification, as determined in comparison to the benefits 
provided for medical/surgical conditions in the classification. In 
determining the classification in which a particular benefit belongs, a 
plan must apply the same standards to medical/surgical benefits and to 
mental health or substance use disorder benefits. To the extent that a 
plan provides benefits in a classification and imposes any separate 
financial requirement or treatment limitation (or separate level of a 
financial requirement or treatment limitation) for benefits in the 
classification, the rules of this paragraph (c) apply separately with 
respect to that classification for all financial requirements or 
treatment limitations (illustrated in examples in paragraph 
(c)(2)(ii)(C) of this section). The following classifications of 
benefits are the only classifications used in applying the rules of 
this paragraph (c), in addition to the permissible sub-classifications 
described in paragraph (c)(3)(iii) of this section:
* * * * *
    (C) * * *
    (1) Example 1--(i) Facts. A group health plan offers inpatient and 
outpatient benefits and does not contract with a network of providers. 
The plan imposes a $500 deductible on all benefits. For inpatient 
medical/surgical benefits, the plan imposes a coinsurance requirement. 
For outpatient medical/surgical benefits, the plan imposes copayments. 
The plan imposes no other financial requirements or treatment 
limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because inpatient, out-of-network medical/surgical 
benefits are subject to separate financial requirements from 
outpatient, out-of-network medical/surgical benefits, the rules of this 
paragraph (c) apply separately with respect to any financial 
requirements and treatment limitations, including the deductible, in 
each classification.
    (2) Example 2--(i) Facts. A plan imposes a $500 deductible on all 
benefits. The plan has no network of providers. The plan generally 
imposes a 20 percent coinsurance requirement with respect to all 
benefits, without distinguishing among inpatient, outpatient, emergency 
care, or prescription drug benefits. The plan imposes no other 
financial requirements or treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2), 
because the plan does not impose separate financial requirements (or 
treatment limitations) based on classification, the rules of this 
paragraph (c) apply with respect to the deductible and the coinsurance 
across all benefits.
    (3) Example 3--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan 
exempts emergency care benefits from the 20 percent coinsurance 
requirement. The plan imposes no other financial requirements or 
treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3), 
because the plan imposes separate financial requirements based on 
classifications, the rules of this paragraph (c) apply with respect to 
the deductible and the coinsurance separately for benefits in the 
emergency care classification and all other benefits.
    (4) Example 4--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also 
imposes a preauthorization requirement for all inpatient treatment in 
order for benefits to be paid. No such requirement applies to 
outpatient treatment.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because the plan imposes a separate treatment 
limitation based on classifications, the rules of this paragraph (c) 
apply with respect to the deductible and coinsurance separately for 
inpatient, out-of-network benefits and all other benefits.
    (5) Example 5--(i) Facts. A plan 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 behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient 
treatments and treatment settings for medical conditions and surgical 
procedures when provided on an out-of-network basis.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Because the 
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the 
classification, but generally covers the full range of medical/surgical 
benefits in the classification, it fails to provide meaningful benefits 
for treatment of ASD in the classification.
    (6) Example 6--(i) Facts. 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/surgical conditions in the outpatient, in-
network classification.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan violates the rules of this paragraph (c)(2)(ii). 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 medical/surgical 
conditions in the classification.

[[Page 51624]]

    (3) * * *
    (i) * * *
    (A) Substantially all. For purposes of this paragraph (c)(3), a 
type of financial requirement or quantitative treatment limitation is 
considered to apply to substantially all medical/surgical benefits in a 
classification of benefits if it applies to at least two-thirds of all 
medical/surgical benefits in that classification. (For purposes of this 
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level 
of a type of financial requirement are treated as benefits not subject 
to that type of financial requirement, and benefits expressed as 
subject to a quantitative treatment limitation that is unlimited are 
treated as benefits not subject to that type of quantitative treatment 
limitation.) If a type of financial requirement or quantitative 
treatment limitation does not apply to at least two-thirds of all 
medical/surgical benefits in a classification, then that type cannot be 
applied to mental health or substance use disorder benefits in that 
classification.
* * * * *
    (C) Portion based on plan payments. For purposes of this paragraph 
(c)(3), the determination of the portion of medical/surgical benefits 
in a classification of benefits subject to a financial requirement or 
quantitative treatment limitation (or subject to any level of a 
financial requirement or quantitative treatment limitation) is based on 
the dollar amount of all plan payments for medical/surgical benefits in 
the classification expected to be paid under the plan for the plan year 
(or for the portion of the plan year after a change in plan benefits 
that affects the applicability of the financial requirement or 
quantitative treatment limitation).
    (D) Clarifications for certain threshold requirements. For any 
deductible, the dollar amount of plan payments includes all plan 
payments with respect to claims that would be subject to the deductible 
if it had not been satisfied. For any out-of-pocket maximum, the dollar 
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket 
maximum if it had not been satisfied. Similar rules apply for any other 
thresholds at which the rate of plan payment changes. (See also PHS Act 
section 2707 and Affordable Care Act section 1302(c), which establish 
annual limitations on out-of-pocket maximums for all non-grandfathered 
health plans.)
* * * * *
    (iii) Special rules. Unless specifically permitted under this 
paragraph (c)(3)(iii), sub-classifications are not permitted when 
applying the rules of paragraph (c)(3) of this section.
    (A) Multi-tiered prescription drug benefits. If a plan applies 
different levels of financial requirements to different tiers of 
prescription drug benefits based on reasonable factors determined in 
accordance with the rules in paragraph (c)(4) of this section (relating 
to requirements for nonquantitative treatment limitations) and without 
regard to whether a drug is generally prescribed with respect to 
medical/surgical benefits or with respect to mental health or substance 
use disorder benefits, the plan satisfies the parity requirements of 
this paragraph (c) with respect to prescription drug benefits. 
Reasonable factors include cost, efficacy, generic versus brand name, 
and mail order versus pharmacy pick-up.
    (B) Multiple network tiers. If a plan provides benefits through 
multiple tiers of in-network providers (such as an in-network tier of 
preferred providers with more generous cost-sharing to participants 
than a separate in-network tier of participating providers), the plan 
may divide its benefits furnished on an in-network basis into sub-
classifications that reflect network tiers, if the tiering is based on 
reasonable factors determined in accordance with the rules in paragraph 
(c)(4) of this section (such as quality, performance, and market 
standards) and without regard to whether a provider provides services 
with respect to medical/surgical benefits or mental health or substance 
use disorder benefits. After the sub-classifications are established, 
the plan may not impose any financial requirement or treatment 
limitation on mental health or substance use disorder benefits in any 
sub-classification that is more restrictive than the predominant 
financial requirement or treatment limitation that applies to 
substantially all medical/surgical benefits in the sub-classification 
using the methodology set forth in paragraph (c)(3)(i) of this section.
* * * * *
    (iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of 
this section are illustrated by the following examples. In each 
example, the group health plan is subject to the requirements of this 
section and provides both medical/surgical benefits and mental health 
and substance use disorder benefits.
    (A) Example 1--(1) Facts. (i) For inpatient, out-of-network 
medical/surgical benefits, a group health plan imposes five levels of 
coinsurance. Using a reasonable method, the plan projects its payments 
for the upcoming year as follows:

                                                        Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................              0%                10%                15%                20%                30%           Total
Projected payments..........................           $200x              $100x              $450x              $100x              $150x         $1,000x
Percent of total plan costs.................              20                 10                 45                 10                 15  ..............
Percent subject to coinsurance level........             N/A   12.5 (100x/800x)  56.25 (450x/800x)   12.5 (100x/800x)  18.75 (150x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) The plan projects plan costs of $800x to be subject to 
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to 
coinsurance, and 56.25 percent of the benefits subject to coinsurance 
are projected to be subject to the 15 percent coinsurance level.
    (2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the 
two-thirds threshold of the substantially all standard is met for 
coinsurance because 80 percent of all inpatient, out-of-network 
medical/surgical benefits are subject to coinsurance. Moreover, the 15 
percent coinsurance is the predominant level because it is applicable 
to more than one-half of inpatient, out-of-network medical/surgical 
benefits subject to the coinsurance requirement. The plan may not 
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more 
restrictive than the 15 percent level of coinsurance.
    (B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical

[[Page 51625]]

benefits, a plan imposes five different copayment levels. Using a 
reasonable method, the plan projects payments for the upcoming year as 
follows:

                                                        Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................              $0                $10                $15                $20                $50           Total
Projected payments..........................           $200x              $200x              $200x              $300x              $100x         $1,000x
Percent of total plan costs.................              20                 20                 20                 30                 10  ..............
Percent subject to copayments...............             N/A     25 (200x/800x)     25 (200x/800x)   37.5 (300x/800x)   12.5 (100x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) The plan projects plan costs of $800x to be subject to 
copayments ($200x + $200x +$300x + $100x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to a 
copayment.
    (2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the 
two-thirds threshold of the substantially all standard is met for 
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to a copayment. Moreover, there is no 
single level that applies to more than one-half of medical/surgical 
benefits in the classification subject to a copayment (for the $10 
copayment, 25%; for the $15 copayment, 25%; for the $20 copayment, 
37.5%; and for the $50 copayment, 12.5%). The plan can combine any 
levels of copayment, including the highest levels, to determine the 
predominant level that can be applied to mental health or substance use 
disorder benefits. If the plan combines the highest levels of 
copayment, the combined projected payments for the two highest 
copayment levels, the $50 copayment and the $20 copayment, are not more 
than one-half of the outpatient, in-network medical/surgical benefits 
subject to a copayment because they are exactly one-half ($300x + $100x 
= $400x; $400x/$800x = 50%). The combined projected payments for the 
three highest copayment levels--the $50 copayment, the $20 copayment, 
and the $15 copayment--are more than one-half of the outpatient, in-
network medical/surgical benefits subject to the copayments ($100x + 
$300x + $200x = $600x; $600x/$800x = 75%). Thus, the plan may not 
impose any copayment on outpatient, in-network mental health or 
substance use disorder benefits that is more restrictive than the least 
restrictive copayment in the combination, the $15 copayment.
    (C) Example 3--(1) Facts. A plan imposes a $250 deductible on all 
medical/surgical benefits for self-only coverage and a $500 deductible 
on all medical/surgical benefits for family coverage. The plan has no 
network of providers. For all medical/surgical benefits, the plan 
imposes a coinsurance requirement. The plan imposes no other financial 
requirements or treatment limitations.
    (2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3), 
because the plan has no network of providers, all benefits are provided 
out-of-network. Because self-only and family coverage are subject to 
different deductibles, whether the deductible applies to substantially 
all medical/surgical benefits is determined separately for self-only 
medical/surgical benefits and family medical/surgical benefits. Because 
the coinsurance is applied without regard to coverage units, the 
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
    (D) Example 4--(1) Facts. A plan applies the following financial 
requirements for prescription drug benefits. The requirements are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits. Moreover, the process for 
certifying a particular drug as ``generic'', ``preferred brand name'', 
``non-preferred brand name'', or ``specialty'' complies with the rules 
of paragraph (c)(4) of this section (relating to requirements for 
nonquantitative treatment limitations).

                                      Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
                                        Tier 1              Tier 2              Tier 3              Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................  Generic drugs.....  Preferred brand     Non-preferred       Specialty drugs.
                                                       name drugs.         brand name drugs
                                                                           (which may have
                                                                           Tier 1 or Tier 2
                                                                           alternatives).
Percent paid by plan............  90................  80................  60................  50.
----------------------------------------------------------------------------------------------------------------

    (2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the 
financial requirements that apply to prescription drug benefits are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits; the process for certifying drugs in 
different tiers complies with paragraph (c)(4) of this section; and the 
bases for establishing different levels or types of financial 
requirements are reasonable. The financial requirements applied to 
prescription drug benefits do not violate the parity requirements of 
this paragraph (c)(3).
    (E) Example 5--(1) Facts. A plan has two-tiers of network of 
providers: a preferred provider tier and a participating provider tier. 
Providers are placed in either the preferred tier or participating tier 
based on reasonable factors determined in accordance with the rules in 
paragraph (c)(4) of this section, such as accreditation, quality and 
performance measures (including customer feedback), and relative 
reimbursement rates. Furthermore, provider tier placement is determined 
without regard to whether a provider specializes in the treatment of 
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications 
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or 
treatment limitation on mental health or substance use disorder 
benefits in either of these sub-

[[Page 51626]]

classifications that is more restrictive than the predominant financial 
requirement or treatment limitation that applies to substantially all 
medical/surgical benefits in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the 
division of in-network benefits into sub-classifications that reflect 
the preferred and participating provider tiers does not violate the 
parity requirements of this paragraph (c)(3).
    (F) Example 6--(1) Facts. With respect to outpatient, in-network 
benefits, a plan imposes a $25 copayment for office visits and a 20 
percent coinsurance requirement for outpatient surgery. The plan 
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services). The plan does not impose any financial 
requirement or quantitative treatment limitation on mental health or 
substance use disorder benefits in either of these sub-classifications 
that is more restrictive than the predominant financial requirement or 
quantitative treatment limitation that applies to substantially all 
medical/surgical benefits in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the 
division of outpatient, in-network benefits into sub-classifications 
for office visits and all other outpatient, in-network items and 
services does not violate the parity requirements of this paragraph 
(c)(3).
    (G) Example 7--(1) Facts. Same facts as in paragraph 
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of 
determining parity, the plan divides the outpatient, in-network 
classification into outpatient, in-network generalists and outpatient, 
in-network specialists.
    (2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the 
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items 
and services violates the requirements of paragraph (c)(3)(iii)(C) of 
this section.
* * * * *
    (4) Nonquantitative treatment limitations. Subject to paragraph 
(c)(4)(v) of this section, a group health plan may not impose a 
nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in a classification unless the plan's 
imposition of the limitation meets the requirements of paragraphs 
(c)(4)(i), (ii), and (iv) of this section. If a group health plan fails 
to meet any of these requirements with respect to a nonquantitative 
treatment limitation, the limitation violates Code section 
9812(a)(3)(A)(ii) and may not be imposed by the plan.
    (i) Requirement that nonquantitative treatment limitations be no 
more restrictive for mental health benefits and substance use disorder 
benefits. A group health plan may not apply any nonquantitative 
treatment limitation with respect to mental health or substance use 
disorder benefits in any classification that is more restrictive, as 
written or in operation, than the predominant nonquantitative treatment 
limitation applied to substantially all medical/surgical benefits in 
the same classification.
    (A) Restrictive. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is restrictive to the extent it 
imposes conditions, terms, or requirements that limit access to 
benefits under the terms of the plan. Conditions, terms, or 
requirements include, but are not limited to, those that compel an 
action by or on behalf of a participant or beneficiary to access 
benefits or limit access to the full range of treatment options 
available for a condition or disorder under the plan.
    (B) Substantially all. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is considered to apply to 
substantially all medical/surgical benefits in a classification if it 
applies to at least two-thirds of all medical/surgical benefits in that 
classification, consistent with paragraph (c)(4)(i)(D) of this section. 
Whether the nonquantitative treatment limitation applies to at least 
two-thirds of all medical/surgical benefits is determined without 
regard to whether the nonquantitative treatment limitation was 
triggered based on a particular factor or evidentiary standard. If a 
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that 
limitation cannot be applied to mental health or substance use disorder 
benefits in that classification.
    (C) Predominant. For purposes of this paragraph (c)(4)(i), the term 
predominant means the most common or most frequent variation of the 
nonquantitative treatment limitation within a classification, 
determined in accordance with the method outlined in paragraph 
(c)(4)(i)(D) of this section, to the extent the plan imposes multiple 
variations of a nonquantitative treatment limitation within the 
classification. For example, multiple variations of inpatient 
concurrent review include review commencing 1 day, 3 days, or 7 days 
after admission, depending on the reason for the stay.
    (D) Portion based on plan payments. For purposes of paragraphs 
(c)(4)(i)(B) and (C) of this section, the determination of the portion 
of medical/surgical benefits in a classification of benefits subject to 
a nonquantitative treatment limitation is based on the dollar amount of 
all plan payments for medical/surgical benefits in the classification 
expected to be paid under the plan for the plan year (or the portion of 
the plan year after a change in benefits that affects the applicability 
of the nonquantitative treatment limitation). Any reasonable method may 
be used to determine the dollar amount expected to be paid under a plan 
for medical/surgical benefits.
    (E) Exceptions for independent professional medical or clinical 
standards and standards to detect or prevent and prove fraud, waste, 
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this 
section, a plan that applies a nonquantitative treatment limitation 
that impartially applies independent professional medical or clinical 
standards or applies standards to detect or prevent and prove fraud, 
waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B) of this 
section, to mental health or substance use disorder benefits in any 
classification will not be considered to violate this paragraph 
(c)(4)(i) with respect to such nonquantitative treatment limitation.
    (ii) Additional requirements related to design and application of 
the nonquantitative treatment limitation--(A) In general. Consistent 
with paragraph (a)(1) of this section, a plan may not impose a 
nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in any classification unless, under the 
terms of the plan as written and in operation, any processes, 
strategies, evidentiary standards, or other factors used in designing 
and applying the nonquantitative treatment limitation to mental health 
or substance use disorder benefits in the classification are comparable 
to, and are applied no more stringently than, the processes, 
strategies, evidentiary standards, or other factors used in designing 
and applying the limitation with respect to medical/surgical benefits 
in the classification.
    (B) Prohibition on discriminatory factors and evidentiary 
standards. For purposes of determining comparability and stringency 
under paragraph (c)(4)(ii)(A) of this section, a plan may not rely upon 
any factor or evidentiary standard if the information, evidence, 
sources, or standards on which the factor or evidentiary standard is 
based

[[Page 51627]]

discriminates against mental health or substance use disorder benefits 
as compared to medical/surgical benefits. For purposes of this 
paragraph (c)(4)(ii)(B):
    (1) Impartially applied generally recognized independent 
professional medical or clinical standards described in paragraph 
(c)(4)(v)(A) of this section are not considered to discriminate against 
mental health or substance use disorder benefits.
    (2) Standards reasonably designed to detect or prevent and prove 
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this 
section are not considered to discriminate against mental health or 
substance use disorder benefits.
    (3) Information is considered to discriminate against mental health 
or substance use disorder benefits if it is biased or not objective, in 
a manner that results in less favorable treatment of mental health or 
substance use disorder benefits, based on all the relevant facts and 
circumstances including, but not limited to, the source of the 
information, the purpose or context of the information, and the content 
of the information.
    (iii) Illustrative, non-exhaustive list of nonquantitative 
treatment limitations. Nonquantitative treatment limitations include--
    (A) Medical management standards (such as prior authorization) 
limiting or excluding benefits based on medical necessity or medical 
appropriateness, or based on whether the treatment is experimental or 
investigative;
    (B) Formulary design for prescription drugs;
    (C) For plans with multiple network tiers (such as preferred 
providers and participating providers), network tier design;
    (D) Standards related to network composition, including but not 
limited to, standards for provider and facility admission to 
participate in a network or for continued network participation, 
including methods for determining reimbursement rates, credentialing 
standards, and procedures for ensuring the network includes an adequate 
number of each category of provider and facility to provide services 
under the plan;
    (E) Plan methods for determining out-of-network rates, such as 
allowed amounts; usual, customary, and reasonable charges; or 
application of other external benchmarks for out-of-network rates;
    (F) Refusal to pay for higher-cost therapies until it can be shown 
that a lower-cost therapy is not effective (also known as fail-first 
policies or step therapy protocols);
    (G) Exclusions based on failure to complete a course of treatment; 
and
    (H) Restrictions based on geographic location, facility type, 
provider specialty, and other criteria that limit the scope or duration 
of benefits for services provided under the plan.
    (iv) Required use of outcomes data--(A) In general. When designing 
and applying a nonquantitative treatment limitation, a plan must 
collect and evaluate relevant data in a manner reasonably designed to 
assess the impact of the nonquantitative treatment limitation on access 
to mental health and substance use disorder benefits and medical/
surgical benefits, and consider the impact as part of the plan's 
analysis of whether the limitation, in operation, complies with 
paragraphs (c)(4)(i) and (ii) of this section. The Secretary, jointly 
with the Secretary of the Department of Labor and the Secretary of 
Health and Human Services, may specify in guidance the type, form, and 
manner of collection and evaluation for the data required under this 
paragraph (c)(4)(iv)(A).
    (1) For purposes of this paragraph (c)(4)(iv)(A), relevant data 
includes, but is not limited to, the number and percentage of claims 
denials and any other data relevant to the nonquantitative treatment 
limitation required by State law or private accreditation standards.
    (2) In addition to the relevant data set forth in paragraph 
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative 
treatment limitations related to network composition standards 
includes, but is not limited to, in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges).
    (B) Material differences. Subject to paragraph (c)(4)(iv)(C) of 
this section, to the extent the relevant data evaluated pursuant to 
paragraph (c)(4)(iv)(A) of this section show material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, the differences will be considered a 
strong indicator that the plan violates paragraph (c)(4)(i) or (ii) of 
this section. In such instances, the plan:
    (1) Must take reasonable action to address the material differences 
in access as necessary to ensure compliance, in operation, with 
paragraphs (c)(4)(i) and (ii) of this section; and
    (2) Must document the action that has been or is being taken by the 
plan to mitigate any material differences in access to mental health 
and substance use disorder benefits as compared to medical/surgical 
benefits, as required by Sec.  54.9812-2(c)(5)(iv).
    (C) Special rule for nonquantitative treatment limitations related 
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this 
section, when designing and applying one or more nonquantitative 
treatment limitation(s) related to network composition standards, a 
plan fails to meet the requirements of paragraphs (c)(4)(i) and (ii) of 
this section, in operation, if the relevant data show material 
differences in access to in-network mental health and substance use 
disorder benefits as compared to in-network medical/surgical benefits 
in a classification.
    (D) Exception for independent professional medical or clinical 
standards. A plan designing and applying a nonquantitative treatment 
limitation with respect to mental health or substance use disorder 
benefits in any classification that impartially applies independent 
professional medical or clinical standards, as described in paragraph 
(c)(4)(v)(A) of this section, is not required to comply with the 
requirements of this paragraph (c)(4)(iv) with respect to that 
classification.
    (v) Independent professional medical or clinical standards and 
standards to detect or prevent and prove fraud, waste, and abuse. (A) 
To qualify for the exceptions in paragraphs (c)(4)(i)(E), 
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent 
professional medical or clinical standards, a nonquantitative treatment 
limitation must impartially apply generally recognized independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care) to medical/surgical benefits and mental 
health or substance use disorder benefits, and may not deviate from 
those standards in any way, such as by imposing additional or different 
requirements.
    (B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and 
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud, 
waste, and abuse, a nonquantitative treatment limitation must be 
reasonably designed to detect or prevent and prove fraud, waste, and 
abuse, based on indicia of fraud, waste, and abuse that have been 
reliably established through objective and unbiased data, and also be 
narrowly

[[Page 51628]]

designed to minimize the negative impact on access to appropriate 
mental health and substance use disorder benefits.
    (vi) Prohibition on separate nonquantitative treatment limitations 
applicable only to mental health or substance use disorder benefits. 
Consistent with paragraph (c)(2)(i) of this section, a group health 
plan may not apply any nonquantitative treatment limitation that is 
applicable only with respect to mental health or substance use disorder 
benefits and does not apply with respect to any medical/surgical 
benefits in the same benefit classification.
    (vii) Effect of final determination of noncompliance under Sec.  
54.9812-2. If a group health plan receives a final determination from 
the Secretary that the plan is not in compliance with the requirements 
of Sec.  54.9812-2 with respect to a nonquantitative treatment 
limitation, the nonquantitative treatment limitation violates this 
paragraph (c)(4) and the Secretary may direct the plan not to impose 
the nonquantitative treatment limitation, unless and until the plan 
demonstrates to the Secretary compliance with the requirements of this 
section or takes appropriate action to remedy the violation.
    (viii) Examples. The rules of this paragraph (c)(4) are illustrated 
by the following examples. In each example, the group health plan is 
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder 
benefits. Additionally, in examples that conclude that the plan 
violates one provision of this paragraph (c)(4), such examples do not 
necessarily imply compliance with other provisions of this paragraph 
(c)(4), as these examples do not analyze compliance with all other 
provisions of this paragraph (c)(4).
    (A) Example 1 (More restrictive prior authorization requirement in 
operation)--(1) Facts. A plan requires prior authorization from the 
plan's utilization reviewer that a treatment is medically necessary for 
all inpatient, in-network medical/surgical benefits and for all 
inpatient, in-network mental health and substance use disorder 
benefits. While inpatient, in-network benefits for medical/surgical 
conditions are approved for periods of 1, 3, and 7 days, after which a 
treatment plan must be submitted by the patient's attending provider 
and approved by the plan, the approvals for 7 days are most common 
under this plan. For inpatient, in-network mental health and substance 
use disorder benefits, routine approval is most commonly given only for 
one day, after which a treatment plan must be submitted by the 
patient's attending provider and approved by the plan. The difference 
in the duration of approvals is not the result of independent 
professional medical or clinical standards or standards to detect or 
prevent and prove fraud, waste, and abuse, but rather reflects the 
application of a heightened standard to the provision of the mental 
health and substance use disorder benefits in the relevant 
classification.
    (2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the 
plan violates the rules of paragraph (c)(4)(i) of this section. Under 
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification 
(inpatient, in-network), since it applies to all benefits in the 
relevant classification. Further, the most common or frequent variation 
of the nonquantitative treatment limitation applied to medical/surgical 
benefits in the relevant classification (the predominant 
nonquantitative treatment limitation) is the routine approval of 
inpatient, in-network benefits for 7 days before the patient's 
attending provider must submit a treatment plan. However, the plan 
routinely approves inpatient, in-network benefits for mental health and 
substance use disorder conditions for only 1 day before the patient's 
attending provider must submit a treatment plan (and, in doing so, does 
not impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section). In operation, therefore, the prior 
authorization requirement imposed on inpatient, in-network mental 
health and substance use disorder benefits is more restrictive than the 
predominant prior authorization requirement applicable to substantially 
all medical/surgical benefits in the inpatient, in-network 
classification because the practice of approving only 1 day of 
inpatient benefits limits access to the full range of treatment options 
available for a condition or disorder under the plan as compared to the 
routine 7-day approval that is given for inpatient, in-network medical/
surgical benefits. Because the plan violates the rules of paragraph 
(c)(4)(i) of this section, this example does not analyze compliance 
with paragraph (c)(4)(ii) or (iv) of this section.
    (B) Example 2 (More restrictive peer-to-peer concurrent review 
requirements in operation)--(1) Facts. A plan follows a written process 
for the concurrent review of all medical/surgical benefits and mental 
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is 
conducted in every instance in which concurrent review applies and an 
authorization request is approved by the first-level reviewer only if 
the clinical information submitted by the facility meets the plan's 
criteria for a continued stay. If the first-level reviewer is unable to 
approve the authorization request because the clinical information 
submitted by the facility does not meet the plan's criteria for a 
continued stay, it is sent to a second-level reviewer who will either 
approve or deny the request. While the written process only requires 
review by the second-level reviewer to either deny or approve the 
request, in operation, second-level reviewers for mental health and 
substance use disorder benefits conduct a peer-to-peer review with a 
provider (acting as the authorized representative of a participant or 
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional 
medical or clinical standards or standards to detect or prevent and 
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer 
review, as written or in operation, as part of the second-level review 
for medical/surgical benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
concurrent review nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits within the inpatient, 
in-network classification because the plan follows the concurrent 
review process for all medical/surgical benefits. The most common or 
frequent variation of this nonquantitative treatment limitation (the 
predominant nonquantitative treatment limitation) applicable to 
substantially all medical/surgical benefits is that peer-to-peer review 
is not imposed as part of second-level review. The plan does not 
impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section. As written, the plan's concurrent review 
requirements are the same for medical/surgical benefits and mental 
health and substance use disorder benefits. However, in operation, by 
compelling an additional action (peer-to-peer review as part of second-
level review) to

[[Page 51629]]

access only mental health or substance use disorder benefits, the plan 
applies the limitation to mental health and substance use disorder 
benefits in a manner that is more restrictive than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the inpatient, in-network classification. 
Because the plan violates the rules of paragraph (c)(4)(i) of this 
section, this example does not analyze compliance with paragraph 
(c)(4)(ii) or (iv) of this section.
    (C) Example 3 (More restrictive peer-to-peer review medical 
necessity standard in operation; deviation from independent 
professional medical and clinical standards)--(1) Facts. A plan 
generally requires that all treatment be medically necessary in the 
inpatient, out-of-network classification. For both medical/surgical 
benefits and mental health and substance use disorder benefits, the 
written medical necessity standards are based on independent 
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for 
medical/surgical or mental health inpatient treatment outside of a 
hospital if the physician documents medical appropriateness, but for 
out-of-network benefits for substance use disorder inpatient treatment 
outside of a hospital, the plan requires a physician to also complete 
peer-to-peer review.
    (2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
medical necessity nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits in the inpatient, 
out-of-network classification. The most common or frequent variation of 
the nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) applicable to substantially all 
medical/surgical benefits is the requirement that a physician document 
medical appropriateness without peer-to-peer review. The plan purports 
to impartially apply independent professional medical or clinical 
standards that would otherwise qualify for the exception in paragraph 
(c)(4)(i)(E) of this section, but deviates from those standards by 
imposing the additional requirement to complete peer-to-peer review for 
inpatient, out-of-network benefits for substance use disorder outside 
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of 
this section does not apply. As written, the plan provisions apply the 
nonquantitative treatment limitation to mental health and substance use 
disorder benefits in the inpatient, out-of-network classification in 
the same manner as for medical/surgical benefits. However, in 
operation, the nonquantitative treatment limitation imposed with 
respect to out-of-network substance use disorder benefits for treatment 
outside of a hospital is more restrictive than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the classification because it limits 
access to the full range of treatment options available for a condition 
or disorder under the plan or coverage as compared to medical/surgical 
benefits in the same classification. Because the plan violates the 
rules of paragraph (c)(4)(i) of this section, this example does not 
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (D) Example 4 (Not comparable and more stringent methods for 
determining reimbursement rates in operation)--(1) Facts. A plan's base 
reimbursement rates for outpatient, in-network providers are determined 
based on a variety of factors, including the providers' required 
training, licensure, and expertise. For purposes of this example, the 
plan's nonquantitative treatment limitations for determining 
reimbursement rates for mental health and substance use disorder 
benefits are not more restrictive than the predominant nonquantitative 
treatment limitation applied to substantially all medical/surgical 
benefits in the classification under paragraph (c)(4)(i) of this 
section. As written, for mental health, substance use disorder, and 
medical/surgical benefits, all reimbursement rates for physicians and 
non-physician practitioners for the same Current Procedural Terminology 
(CPT) code vary based on a combination of factors, such as the nature 
of the service, provider type, number of providers qualified to provide 
the service in a given geographic area, and market need (demand). As a 
result, reimbursement rates for mental health, substance use disorder, 
and medical/surgical benefits furnished by non-physician providers are 
generally less than for physician providers. In operation, the plan 
reduces the reimbursement rate for mental health and substance use 
disorder non-physician providers from that paid to mental health and 
substance use disorder physicians by the same percentage for every CPT 
code but does not apply the same reductions for non-physician medical/
surgical providers.
    (2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the 
plan violates the rules of paragraph (c)(4)(ii) of this section. 
Because the plan reimburses non-physician providers of mental health 
and substance use disorder services by reducing their reimbursement 
rate from the rate to physician providers by the same percentage for 
every CPT code but does not apply the same reductions to non-physician 
providers of medical/surgical services, in operation, the factors used 
in applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits are not comparable to, and are 
applied more stringently than, the factors used in applying the 
limitation with respect to medical/surgical benefits. Because the facts 
assume that the plan's methods for determining reimbursement rates 
comply with paragraph (c)(4)(i) of this section and the plan violates 
the rules of paragraph (c)(4)(ii) of this section, this example does 
not analyze compliance with paragraph (c)(4)(iv) of this section.
    (E) Example 5 (Exception for impartially applied generally 
recognized independent professional medical or clinical standards)--(1) 
Facts. A group health plan develops a medical management requirement 
for all inpatient, out-of-network benefits for both medical/surgical 
benefits and mental health and substance use disorder benefits to 
ensure treatment is medically necessary. The medical management 
requirement impartially applies independent professional medical or 
clinical standards in a manner that qualifies for the exception in 
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any 
other factors or evidentiary standards and the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the medical management requirement to mental health and substance use 
disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the requirement with 
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management 
requirement results in a higher percentage of denials for mental health 
and substance use disorder claims than medical/surgical claims, because 
the benefits were found to be medically necessary for a lower 
percentage of mental health and substance use disorder claims based on 
the impartial application of the independent professional medical or 
clinical standards by the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the 
plan does

[[Page 51630]]

not violate the rules of this paragraph (c)(4). The medical management 
nonquantitative treatment limitation imposed on mental health and 
substance use disorder benefits does not violate paragraph (c)(4)(i) or 
(iv) of this section because it impartially applies independent 
professional medical or clinical standards for both medical/surgical 
benefits and mental health and substance use disorder benefits in a 
manner that qualifies for the exceptions in paragraphs (c)(4)(i)(E) and 
(c)(4)(iv)(D) of this section, respectively. Moreover, the 
nonquantitative treatment limitation does not violate paragraph 
(c)(4)(ii) of this section because the independent professional medical 
or clinical standards are not considered to be a discriminatory factor 
or evidentiary standard under paragraph (c)(4)(ii)(B) of this section. 
Additionally, as written and in operation, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits in the inpatient, out-of-network classification 
are comparable to, and are applied no more stringently than, the 
processes, strategies, evidentiary standards, and other factors used in 
applying the limitation with respect to medical/surgical benefits in 
the classification, regardless of the fact that the application of the 
nonquantitative treatment limitation resulted in higher percentages of 
claim denials for mental health and substance use disorder benefits as 
compared to medical/surgical benefits.
    (F) Example 6 (More restrictive prior authorization requirement; 
exception for impartially applied generally recognized independent 
professional medical or clinical standards not met)--(1) Facts. The 
provisions of a plan state that it applies independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care) for setting prior authorization requirements for 
both medical/surgical and mental health and substance use disorder 
prescription drugs. The relevant generally recognized independent 
professional medical standard for treatment of opioid use disorder that 
the plan utilizes--in this case, the American Society of Addiction 
Medicine national practice guidelines--does not support prior 
authorization every 30 days for buprenorphine/naloxone. However, in 
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of 
opioid use disorder.
    (2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of 
this section, because, although the provisions of the plan state that 
it applies independent professional medical and clinical standards, the 
plan deviates from the relevant standards with respect to prescription 
drugs to treat opioid use disorder. The prior authorization 
nonquantitative treatment limitation is applied to at least two-thirds 
of all medical/surgical benefits in the prescription drugs 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation (the predominant nonquantitative 
treatment limitation) applicable to substantially all medical/surgical 
benefits is following generally recognized independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care). The prior authorization requirements imposed on 
substance use disorder benefits are more restrictive than the 
predominant nonquantitative treatment limitation applicable to 
substantially all medical/surgical benefits in the classification, 
because the plan imposes additional requirements on substance use 
disorder benefits that limit access to the full range of treatment 
options available for a condition or disorder under the plan as 
compared to medical/surgical benefits in the same classification. 
Because the plan violates the rules of paragraph (c)(4)(i) of this 
section, this example does not analyze compliance with paragraph 
(c)(4)(ii) or (iv) of this section.
    (G) Example 7 (Impermissible nonquantitative treatment limitation 
imposed following a final determination of noncompliance and direction 
by the Secretary)--(1) Facts. Following an initial request by the 
Secretary for a plan's comparative analysis of a nonquantitative 
treatment limitation pursuant to Sec.  54.9812-2(d), the plan submits a 
comparative analysis for the nonquantitative treatment limitation. 
After review of the comparative analysis, the Secretary makes an 
initial determination that the comparative analysis fails to 
demonstrate that the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the nonquantitative 
treatment limitation to mental health or substance use disorder 
benefits in the relevant classification are comparable to, and applied 
no more stringently than, those used in designing and applying the 
limitation to medical/surgical benefits in the classification. Pursuant 
to Sec.  54.9812-2(d)(3), the plan submits a corrective action plan and 
additional comparative analyses within 45 calendar days after the 
initial determination, and the Secretary then determines that the 
additional comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). The plan receives a final 
determination of noncompliance from the Secretary, which informs the 
plan that it is not in compliance with this paragraph (c)(4) and 
directs the plan not to impose the nonquantitative treatment limitation 
by a certain date, unless and until the plan demonstrates compliance to 
the Secretary or takes appropriate action to remedy the violation. The 
plan makes no changes to its plan terms by that date and continues to 
impose the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the 
plan violates the requirements of this paragraph (c)(4) by imposing the 
nonquantitative treatment limitation after the Secretary directs the 
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this 
section.
    (H) Example 8 (Provider network admission standards not more 
restrictive and compliant with requirements for design and application 
of NQTLs)--(1) Facts. As part of a plan's standards for provider 
admission to its network, in the outpatient, in-network classification, 
any provider seeking to contract with the plan must have a certain 
number of years of supervised clinical experience. As a result of that 
standard, master's level mental health therapists are required to 
obtain supervised clinical experience beyond their licensure, while 
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their 
licensure because their licensure already requires supervised clinical 
experience. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation. This includes in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges). This 
data demonstrates that participants and beneficiaries seeking 
outpatient care are able to access outpatient, in-network mental health 
and substance use disorder providers at the same

[[Page 51631]]

frequency as outpatient, in-network medical/surgical providers, that 
mental health and substance use disorder providers are active in the 
network and are accepting new patients to the same extent as medical/
surgical providers, and that mental health and substance use disorder 
providers are within similar time and distances to plan participants 
and beneficiaries as are medical/surgical providers. This data also 
does not identify material differences in what the plan pays 
psychiatrists or non-physician mental health providers, compared to 
physicians or non-physician medical/surgical providers, respectively, 
both for the same reimbursement codes and as compared to Medicare 
rates.
    (2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the 
plan does not violate this paragraph (c)(4). The standards for this 
nonquantitative treatment limitation, namely provider admission to the 
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it 
applies to all medical/surgical benefits in the classification. The 
most common or frequent variation of this nonquantitative treatment 
limitation (the predominant nonquantitative treatment limitation) that 
applies to substantially all medical/surgical benefits in the 
classification is having a certain number of years of supervised 
clinical experience. The standards for provider admission to the plan's 
network that are imposed with respect to mental health or substance use 
disorder benefits are no more restrictive, as written or in operation, 
than the predominant variation of the nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
the classification, because the standards do not limit access to the 
full range of treatment options available for a condition or disorder 
under the plan as compared to medical/surgical benefits in the same 
classification. The requirement that providers have a certain number of 
years of supervised clinical experience that the plan relied upon to 
design and apply the nonquantitative treatment limitation is not 
considered to discriminate against mental health or substance use 
disorder benefits, even though this results in the requirement that 
master's level mental health therapists obtain supervised clinical 
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the 
processes, strategies, evidentiary standards, or other factors used in 
applying the nonquantitative treatment limitation to mental health or 
substance use disorder benefits 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 benefits in the 
classification, because the plan applies the same standard to all 
providers in the classification. Finally, the plan collects and 
evaluates relevant data in a manner reasonably designed to assess the 
impact of the nonquantitative treatment limitation on access to mental 
health and substance use disorder benefits, which does not show 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
    (I) Example 9 (More restrictive requirement for primary caregiver 
participation applied to ABA therapy)--(1) Facts. A plan generally 
applies medical necessity criteria in adjudicating claims for coverage 
of all outpatient, in-network medical/surgical and mental health and 
substance use disorder benefits, including ABA therapy for the 
treatment of ASD, which is a mental health condition. The plan's 
medical necessity criteria for coverage of ABA therapy requires 
evidence that the participant's or beneficiary's primary caregivers 
actively participate in ABA therapy, as documented by consistent 
attendance in parent, caregiver, or guardian training sessions. In 
adding this requirement, the plan deviates from independent 
professional medical or clinical standards, and there are no similar 
medical necessity criteria requiring evidence of primary caregiver 
participation in order to receive coverage of any medical/surgical 
benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the 
plan violates paragraph (c)(4)(i) of this section. The plan applies 
medical necessity criteria to at least two-thirds of all outpatient, 
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent 
variation of this nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) that applies to substantially all 
medical/surgical benefits in the classification does not include the 
requirement to provide evidence that the participant's or beneficiary's 
primary caregivers actively participate in the treatment. The plan does 
not qualify for the exception in paragraph (c)(4)(i)(E) of this section 
in applying its restriction on coverage for ABA therapy because the 
plan deviates from the independent professional medical or clinical 
standards by imposing a different requirement. As a result, the 
nonquantitative treatment limitation imposed on mental health and 
substance use disorder benefits is more restrictive than the 
predominant medical necessity requirement imposed on substantially all 
medical/surgical benefits in the classification (which does not include 
the requirement to provide evidence that primary caregivers actively 
participate in treatment). Because the plan violates the rules of 
paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (J) Example 10 (More restrictive exclusion for experimental or 
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as 
written, generally excludes coverage for all treatments that are 
experimental or investigative for both medical/surgical benefits and 
mental health and substance use disorder benefits in the outpatient, 
in-network classification. As a result, the plan generally excludes 
experimental treatment of medical conditions and surgical procedures, 
mental health conditions, and substance use disorders when no 
professionally recognized treatment guidelines define clinically 
appropriate standards of care for the condition or disorder and fewer 
than two randomized controlled trials are available to support the 
treatment's use with respect to the given condition or disorder. The 
plan provides benefits for the treatment of ASD, which is a mental 
health condition, but, in operation, the plan excludes coverage for ABA 
therapy to treat children with ASD, deeming it experimental. More than 
one professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
coverage exclusion for experimental or investigative treatment applies 
to at least two-thirds of all medical/surgical benefits, as it applies 
to all medical/surgical benefits in the outpatient, in-network 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation in the classification (the 
predominant nonquantitative treatment limitation)

[[Page 51632]]

applicable to substantially all medical/surgical benefits is the 
exclusion under the plan for coverage of experimental treatment of 
medical/surgical conditions when no professionally recognized treatment 
guidelines define clinically appropriate standards of care for the 
condition or disorder and fewer than two randomized controlled trials 
are available to support the treatment's use with respect to the given 
condition or procedure. In operation, the exclusion for experimental or 
investigative treatment imposed on ABA therapy is more restrictive than 
the predominant variation of the nonquantitative treatment limitation 
for experimental or investigative treatment imposed on substantially 
all medical/surgical benefits in the classification because the 
exclusion limits access to the full range of treatment options 
available for a condition or disorder under the plan as compared to 
medical/surgical benefits in the same classification. Because the plan 
violates the rules of paragraph (c)(4)(i) of this section, this example 
does not analyze compliance with paragraph (c)(4)(ii) or (iv) of this 
section.
    (K) Example 11 (Separate EAP exhaustion treatment limitation 
applicable only to mental health benefits)--(1) Facts. An employer 
maintains both a major medical plan and an employee assistance program 
(EAP). The EAP provides, among other benefits, a limited number of 
mental health or substance use disorder counseling sessions, which, 
together with other benefits provided by the EAP, are not significant 
benefits in the nature of medical care. Participants are eligible for 
mental health or substance use disorder benefits under the major 
medical plan only after exhausting the counseling sessions provided by 
the EAP. No similar exhaustion requirement applies with respect to 
medical/surgical benefits provided under the major medical plan.
    (2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11), 
limiting eligibility for mental health and substance use disorder 
benefits under the major medical plan until EAP benefits are exhausted 
is a nonquantitative treatment limitation subject to the parity 
requirements of this paragraph (c). Because the limitation does not 
apply to medical/surgical benefits, it is a separate nonquantitative 
treatment limitation applicable only to mental health and substance use 
disorder benefits that violates paragraph (c)(4)(vi) of this section. 
Additionally, this EAP would not qualify as excepted benefits under 
Sec.  54.9831-1(c)(3)(vi)(B)(1) because participants in the major 
medical plan are required to use and exhaust benefits under the EAP 
(making the EAP a gatekeeper) before an individual is eligible for 
benefits under the plan.
    (L) Example 12 (Separate residential exclusion treatment limitation 
applicable only to mental health benefits)--(1) Facts. A plan generally 
covers inpatient, in-network and inpatient out-of-network treatment in 
any setting, including skilled nursing facilities and rehabilitation 
hospitals, provided other medical necessity standards are satisfied. 
The plan also has an exclusion for residential treatment, which the 
plan defines as an inpatient benefit, for mental health and substance 
use disorder benefits. This exclusion was not generated through any 
broader nonquantitative treatment limitation (such as medical necessity 
or other clinical guideline).
    (2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the 
plan violates the rules of paragraph (c)(4)(vi) of this section. 
Because the plan does not apply a comparable exclusion to inpatient 
benefits for medical/surgical conditions, the exclusion of residential 
treatment is a separate nonquantitative treatment limitation applicable 
only to mental health and substance use disorder benefits in the 
inpatient, in-network and inpatient, out-of-network classifications 
that does not apply with respect to any medical/surgical benefits in 
the same benefit classification.
    (M) Example 13 (Standards for provider admission to a network)--(1) 
Facts. A plan applies nonquantitative treatment limitations related to 
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by 
separate service providers for medical/surgical benefits and mental 
health and substance use disorder benefits. For purposes of this 
example, these facts assume that these nonquantitative treatment 
limitations related to network composition for mental health and 
substance use disorder benefits are not more restrictive than the 
predominant nonquantitative treatment limitations applied to 
substantially all medical/surgical benefits in the classifications 
under paragraph (c)(4)(i) of this section. The facts also assume that, 
as written and in operation, the processes, strategies, evidentiary 
standards, and other factors used in designing and applying the 
nonquantitative treatment limitations related to network access to 
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph 
(c)(4)(ii) of this section. The plan collects and evaluates all 
relevant data in a manner reasonably designed to assess the impact of 
the nonquantitative treatment limitations related to network 
composition on access to mental health and substance use disorder 
benefits as compared with access to medical/surgical benefits and 
considers the impact as part of the plan's analysis of whether the 
standards, in operation, comply with paragraphs (c)(4)(i) and (ii) of 
this section. The plan determined that the data did not reveal any 
material differences in access. That data included metrics relating to 
the time and distance from plan participants and beneficiaries to 
network providers in rural and urban regions; the number of network 
providers accepting new patients; the proportions of mental health and 
substance use disorder and medical/surgical providers and facilities 
that provide services in rural and urban regions who are in the plan's 
network; provider reimbursement rates; in-network and out-of-network 
utilization rates (including data related to the dollar value and 
number of provider claims submissions); and survey data from 
participants on the extent to which they forgo or pay out-of-pocket for 
treatment because of challenges finding in-network providers. The 
efforts the plan made when designing and applying its nonquantitative 
treatment limitations related to network composition, which ultimately 
led to its outcomes data not revealing any material differences in 
access to benefits for mental health or substance use disorders as 
compared with medical/surgical benefits, included making sure that the 
plan's service providers are making special efforts to enroll available 
providers, including by authorizing greater compensation or other 
inducements to the extent necessary, and expanding telehealth 
arrangements as appropriate to manage regional shortages. The plan also 
notifies participants in clear and prominent language on its website, 
employee brochures, and the summary plan description of a toll-free 
number available to help participants find in-network providers. In 
addition, when plan participants submit bills for out-of-network items 
and services, the plan directs their service providers to reach out to 
the treating providers and

[[Page 51633]]

facilities to see if they will enroll in the network.
    (2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the 
plan does not violate this paragraph (c)(4). As stated in the Facts 
section, the plan's nonquantitative treatment limitations related to 
network composition comply with the rules of paragraphs (c)(4)(i) and 
(ii) of this section. The plan collects and evaluates relevant data, as 
required under paragraph (c)(4)(iv)(A) of this section, and the data 
does not reveal any material differences in access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits, as a result of the actions the plan took (as set forth in the 
facts) when initially designing its nonquantitative treatment 
limitations related to network composition. Because the plan takes 
comparable actions to ensure that their mental health and substance use 
disorder provider network is as accessible as their medical/surgical 
provider network and exercises careful oversight over both their 
service providers and the comparative robustness of the networks with 
an eye to ensuring that network composition results in access to in-
network benefits for mental health and substance use disorder services 
that is as generous as for medical/surgical services, plan participants 
and beneficiaries can access covered mental health and substance use 
disorder services and benefits as readily as medical/surgical benefits. 
This is reflected in the plan's carefully designed metrics and 
assessment of network composition.
* * * * *
    (d) * * *
    (3) Provisions of other law. Compliance with the disclosure 
requirements in paragraphs (d)(1) and (2) of this section is not 
determinative of compliance with any other provision of applicable 
Federal or State law. In particular, in addition to those disclosure 
requirements, provisions of other applicable law require disclosure of 
information relevant to medical/surgical, mental health, and substance 
use disorder benefits. For example, ERISA section 104 and 29 CFR 
2520.104b-1 provide that, for plans subject to ERISA, instruments under 
which the plan is established or operated must generally be furnished 
to plan participants within 30 days of request. Instruments under which 
the plan is established or operated include documents with information 
on medical necessity criteria for both medical/surgical benefits and 
mental health and substance use disorder benefits; the processes, 
strategies, evidentiary standards, and other factors used to apply a 
nonquantitative treatment limitation with respect to medical/surgical 
benefits and mental health or substance use disorder benefits under the 
plan; and the comparative analyses and other applicable information 
required by Sec.  54.9812-2. In addition, 29 CFR 2560.503-1 and Sec.  
54.9815-2719T set forth rules regarding claims and appeals, including 
the right of claimants (or their authorized representative) upon appeal 
of an adverse benefit determination (or a final internal adverse 
benefit determination) to be provided upon request and free of charge, 
reasonable access to and copies of all documents, records, and other 
information relevant to the claimant's claim for benefits. This 
includes documents with information on medical necessity criteria for 
both medical/surgical benefits and mental health and substance use 
disorder benefits, as well as the processes, strategies, evidentiary 
standards, and other factors used to apply a nonquantitative treatment 
limitation with respect to medical/surgical benefits and mental health 
or substance use disorder benefits under the plan and the comparative 
analyses and other applicable information required by Sec.  54.9812-2.
    (e) * * *
    (4) Coordination with EHB requirements. Nothing in paragraph (f) or 
(g) of this section or Sec.  54.9812-2(g) changes the requirements of 
45 CFR 147.150 and 156.115, providing that a health insurance issuer 
offering non-grandfathered health insurance coverage in the individual 
or small group market providing mental health and substance use 
disorder services, including behavioral health treatment services, as 
part of essential health benefits required under 45 CFR 156.110(a)(5) 
and 156.115(a), must comply with the requirements under section 2726 of 
the Public Health Service Act and its implementing regulations to 
satisfy the requirement to provide coverage for mental health and 
substance use disorder services, including behavioral health treatment, 
as part of essential health benefits.
* * * * *
    (i) * * *
    (1) In general. Except as provided in paragraph (i)(2) of this 
section, this section applies to group health plans on the first day of 
the first plan year beginning on or after January 1, 2025. Until the 
applicability date in the preceding sentence, plans are required to 
continue to comply with 26 CFR 54.9812-1, revised as of April 1, 2023.
* * * * *
    (j) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.
0
3. Add Sec.  54.9812-2 to read as follows:


Sec.  54.9812-2  Nonquantitative treatment limitation comparative 
analysis requirements.

    (a) Meaning of terms. Unless otherwise stated in this section, the 
terms of this section have the meanings indicated in Sec.  54.9812-
1(a)(2).
    (b) In general. In the case of a group health plan that provides 
both medical/surgical benefits and mental health or substance use 
disorder benefits and that imposes any nonquantitative treatment 
limitation on mental health or substance use disorder benefits, the 
plan must perform and document a comparative analysis of the design and 
application of each nonquantitative treatment limitation applicable to 
mental health or substance use disorder benefits. Each comparative 
analysis must comply with the content requirements of paragraph (c) of 
this section and be made available to the Secretary, upon request, in 
the manner required by paragraphs (d) and (e) of this section.
    (c) Comparative analysis content requirements. With respect to each 
nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits under a group health plan, the 
comparative analysis performed by the plan must include, at minimum, 
the elements specified in this paragraph (c). In addition to the 
comparative analysis for each nonquantitative treatment limitation, 
each plan must prepare and make available to the Secretary, upon 
request, a written list of all nonquantitative treatment limitations 
imposed under the plan and a general description of any information 
considered or relied upon by the plan in preparing the comparative 
analysis for each nonquantitative treatment limitation.
    (1) Description of the nonquantitative treatment limitation. The 
comparative analysis must include, with respect to the nonquantitative 
treatment limitation

[[Page 51634]]

that is the subject of the comparative analysis:
    (i) Identification of the nonquantitative treatment limitation, 
including the specific terms of the plan or other relevant terms 
regarding the nonquantitative treatment limitation, the policies or 
guidelines (internal or external) in which the nonquantitative 
treatment limitation appears or is described, and the applicable 
sections of any other relevant documents, such as provider contracts, 
that describe the nonquantitative treatment limitation;
    (ii) Identification of all mental health or substance use disorder 
benefits and medical/surgical benefits to which the nonquantitative 
treatment limitation applies, including a list of which benefits are 
considered mental health or substance use disorder benefits and which 
benefits are considered medical/surgical benefits;
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  54.9812-1(c)(2)(ii)(A); and
    (iv) Identification of the predominant nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
each classification, including an explanation of how the plan 
determined which variation is the predominant nonquantitative treatment 
limitation as compared to other variations, as well as how the plan 
identified the variations of the nonquantitative treatment limitation.
    (2) Identification and definition of the factors used to design or 
apply the nonquantitative treatment limitation. The comparative 
analysis must include, with respect to every factor considered or 
relied upon to design the nonquantitative treatment limitation or apply 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits and medical/surgical benefits:
    (i) Identification of all of the factors considered, as well as the 
evidentiary standards considered or relied upon to design or apply each 
factor and the sources from which each evidentiary standard was 
derived, in determining which mental health or substance use disorder 
benefits and which medical/surgical benefits are subject to the 
nonquantitative treatment limitation; and
    (ii) A definition of each factor, including:
    (A) A detailed description of the factor; and
    (B) A description of each evidentiary standard (and the source of 
each evidentiary standard) identified under paragraph (c)(2)(i) of this 
section.
    (3) Description of how factors are used in the design and 
application of the nonquantitative treatment limitation. The 
comparative analysis must include a description of how each factor 
identified and defined pursuant to paragraph (c)(2) of this section is 
used in the design or application of the nonquantitative treatment 
limitation to mental health and substance use disorder benefits and 
medical/surgical benefits in a classification, including:
    (i) A detailed explanation of how each factor identified and 
defined in paragraph (c)(2) of this section is used to determine which 
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment 
limitation;
    (ii) An explanation of the evidentiary standards or other 
information or sources (if any) considered or relied upon in designing 
or applying the factors or relied upon in designing and applying the 
nonquantitative treatment limitation, including in the determination of 
whether and how mental health or substance use disorder benefits or 
medical/surgical benefits are subject to the nonquantitative treatment 
limitation;
    (iii) If the application of the factor depends on specific 
decisions made in the administration of benefits, the nature of the 
decisions, the timing of the decisions, and the professional 
designation and qualifications of each decision maker;
    (iv) If more than one factor is identified and defined in paragraph 
(c)(2) of this section, an explanation of:
    (A) How all of the factors relate to each other;
    (B) The order in which all the factors are applied, including when 
they are applied;
    (C) Whether and how any factors are given more weight than others; 
and
    (D) The reasons for the ordering or weighting of the factors; and
    (v) Any deviation(s) or variation(s) from a factor, its 
applicability, or its definition (including the evidentiary standards 
used to define the factor and the information or sources from which 
each evidentiary standard was derived), such as how the factor is used 
differently to apply the nonquantitative treatment limitation to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan establishes such 
deviation(s) or variation(s).
    (4) Demonstration of comparability and stringency as written. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan as written, any processes, strategies, 
evidentiary standards, or other factors used in designing and applying 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, or 
other factors used in designing and applying the nonquantitative 
treatment limitation with respect to medical/surgical benefits. The 
comparative analysis must include, with respect to the nonquantitative 
treatment limitation and the factors used in designing and applying the 
nonquantitative treatment limitation:
    (i) Documentation of each factor identified and defined in 
paragraph (c)(2) of this section that was applied to determine whether 
the nonquantitative treatment limitation applies to mental health or 
substance use disorder benefits and medical/surgical benefits in a 
classification, including, as relevant:
    (A) Quantitative data, calculations, or other analyses showing 
whether, in each classification in which the nonquantitative treatment 
limitation applies, mental health or substance use disorder benefits 
and medical/surgical benefits met or did not meet any applicable 
threshold identified in the relevant evidentiary standard, and the 
evaluation of relevant data as required under Sec.  54.9812-
1(c)(4)(iv)(A), to determine that the nonquantitative treatment 
limitation would or would not apply; and
    (B) Records maintained by the plan documenting the consideration 
and application of all factors and evidentiary standards, as well as 
the results of their application;
    (ii) In each classification in which the nonquantitative treatment 
limitation applies to mental health or substance use disorder benefits, 
a comparison of how the nonquantitative treatment limitation, as 
written, is applied to mental health or substance use disorder benefits 
and to medical/surgical benefits, including the specific provisions of 
any forms, checklists, procedure manuals, or other documentation used 
in designing and applying the nonquantitative treatment limitation or 
that address the application of the nonquantitative treatment 
limitation;
    (iii) Documentation demonstrating how the factors are comparably 
applied, as written, to mental health or substance use disorder 
benefits and medical/surgical benefits in each classification, to 
determine which benefits are subject to the nonquantitative treatment 
limitation; and

[[Page 51635]]

    (iv) An explanation of the reason(s) for any deviation(s) or 
variation(s) in the application of a factor used to apply the 
nonquantitative treatment limitation, or the application of the 
nonquantitative treatment limitation, to mental health or substance use 
disorder benefits as compared to medical/surgical benefits, and how the 
plan establishes such deviation(s) or variation(s), including:
    (A) In the definition of the factors, the evidentiary standards 
used to define the factors, and the sources from which the evidentiary 
standards were derived;
    (B) In the design of the factors or evidentiary standards; or
    (C) In the application or design of the nonquantitative treatment 
limitation.
    (5) Demonstration of comparability and stringency in operation. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan in operation, the processes, strategies, 
evidentiary standards, or other factors used in designing and applying 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, or 
other factors used in designing and applying the limitation with 
respect to medical/surgical benefits. The comparative analysis must 
include, with respect to the nonquantitative treatment limitation and 
the factors used in designing and applying the nonquantitative 
treatment limitation:
    (i) A comprehensive explanation of how the plan ensures that, in 
operation, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation to mental health or substance use disorder benefits in a 
classification are comparable to, and are applied no more stringently 
than, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation with respect to medical/surgical benefits, including:
    (A) An explanation of any methodology and underlying data used to 
demonstrate the application of the nonquantitative treatment 
limitation, in operation; and
    (B) The sample period, inputs used in any calculations, definitions 
of terms used, and any criteria used to select the mental health or 
substance use disorder benefits and medical/surgical benefits to which 
the nonquantitative treatment limitation is applicable;
    (ii) Identification of the relevant data collected and evaluated as 
required under Sec.  54.9812-1(c)(4)(iv)(A);
    (iii) An evaluation of the outcomes that resulted from the 
application of the nonquantitative treatment limitation to mental 
health or substance use disorder benefits and medical/surgical 
benefits, including the relevant data as required under Sec.  54.9812-
1(c)(4)(iv)(A);
    (iv) A detailed explanation of material differences in outcomes 
evaluated pursuant to paragraph (c)(5)(iii) of this section that are 
not attributable to differences in the comparability or relative 
stringency of the nonquantitative treatment limitation as applied to 
mental health or substance use disorder benefits and medical/surgical 
benefits and the bases for concluding that material differences in 
outcomes are not attributable to differences in the comparability or 
relative stringency of the nonquantitative treatment limitation; and
    (v) A discussion of any measures that have been or are being 
implemented by the plan to mitigate any material differences in access 
to mental health or substance use disorder benefits as compared to 
medical/surgical benefits, including the actions the plan is taking 
under Sec.  54.9812-1(c)(4)(iv)(B)(1) to address material differences 
to ensure compliance with Sec.  54.9812-1(c)(4)(i) and (ii).
    (6) Findings and conclusions. The comparative analysis must address 
the findings and conclusions as to the comparability of the processes, 
strategies, evidentiary standards, and other factors used in designing 
and applying the nonquantitative treatment limitation to mental health 
or substance use disorder benefits and medical/surgical benefits within 
each classification, and the relative stringency of their application, 
both as written and in operation, and include:
    (i) Any findings or conclusions indicating that the plan is not (or 
might not be) in compliance with the requirements of Sec.  54.9812-
1(c)(4), including any actions the plan has taken or intends to take to 
address any potential areas of concern or noncompliance;
    (ii) A reasoned and detailed discussion of the findings and 
conclusions described in paragraph (c)(6)(i) of this section;
    (iii) Citations to any additional specific information not 
otherwise included in the comparative analysis that supports the 
findings and conclusions described in paragraph (c)(6)(i) of this 
section;
    (iv) The date of the analysis and the title and credentials of all 
relevant persons who participated in the performance and documentation 
of the comparative analysis; and
    (v) If the comparative analysis relies upon an evaluation by a 
reviewer or consultant considered by the plan to be an expert, an 
assessment of each expert's qualifications and the extent to which the 
plan ultimately relied upon each expert's evaluation in performing and 
documenting the comparative analysis of the design and application of 
each nonquantitative treatment limitation applicable to both mental 
health or substance use disorder benefits and medical/surgical 
benefits.
    (d) Requirements related to submission of comparative analyses to 
the Secretary upon request--(1) Initial request by the Secretary for 
comparative analysis. A group health plan must make the comparative 
analysis required by paragraph (b) of this section available and submit 
it to the Secretary within 10 business days of receipt of a request 
from the Secretary (or an additional period of time specified by the 
Secretary).
    (2) Additional information required after a comparative analysis is 
deemed to be insufficient. In instances in which the Secretary 
determines that the plan has not submitted sufficient information under 
paragraph (d)(1) of this section for the Secretary to review the 
comparative analysis required in paragraph (b) of this section, the 
Secretary will specify to the plan the additional information the plan 
must submit to the Secretary to be responsive to the request under 
paragraph (d)(1) of this section. Any such information must be provided 
to the Secretary by the plan within 10 business days after the 
Secretary specifies the additional information to be submitted (or an 
additional period of time specified by the Secretary).
    (3) Initial determination of noncompliance, required action, and 
corrective action plan. In instances in which the Secretary reviewed 
the comparative analysis submitted under paragraph (d)(1) of this 
section and any additional information submitted under paragraph (d)(2) 
of this section, and made an initial determination that the plan is not 
in compliance with the requirements of Sec.  54.9812-1(c)(4) or this 
section, the plan must respond to the Secretary and specify the actions 
the plan will take to bring the plan into compliance, and provide to 
the Secretary additional comparative analyses meeting the requirements 
of paragraph (b) of this section that demonstrate compliance with Sec.  
54.9812-1(c)(4) and this section, not

[[Page 51636]]

later than 45 calendar days after the Secretary's initial determination 
that the plan is not in compliance.
    (4) Requirement to notify participants and beneficiaries of final 
determination of noncompliance--(i) In general. If the Secretary makes 
a final determination of noncompliance, the plan must notify all 
participants and beneficiaries enrolled in the plan that the plan has 
been determined to not be in compliance with the requirements of Sec.  
54.9812-1(c)(4) or this section with respect to such plan. Such notice 
must be provided within 7 calendar days of receipt of the final 
determination of noncompliance, and the plan must provide a copy of the 
notice to the Secretary, and any service provider involved in the 
claims process.
    (ii) Content of notice. The notice to participants and 
beneficiaries required in paragraph (d)(4)(i) of this section shall be 
written in a manner calculated to be understood by the average plan 
participant and must include, in plain language, the following 
information in a standalone notice:
    (A) The following statement prominently displayed on the first 
page, in no less than 14-point font: ``Attention! Department of the 
Treasury has determined that [insert the name of group health plan] is 
not in compliance with the Mental Health Parity and Addiction Equity 
Act.'';
    (B) A summary of changes the plan has made as part of its 
corrective action plan specified to the Secretary following the initial 
determination of noncompliance, including an explanation of any 
opportunity for a participant or beneficiary to have a claim for 
benefits reprocessed;
    (C) A summary of the Secretary's final determination that the plan 
is not in compliance with Sec.  54.9812-1(c)(4) or this section, 
including any provisions or practices identified as being in violation 
of MHPAEA, additional corrective actions identified by the Secretary in 
the final determination notice, and information on how participants and 
beneficiaries can obtain from the plan a copy of the final 
determination of noncompliance;
    (D) Any additional actions the plan is taking to come into 
compliance with Sec.  54.9812-1(c)(4) or this section, when the plan 
will take such actions, and a clear and accurate statement explaining 
whether the Secretary has indicated that those actions, if completed, 
will result in compliance; and
    (E) Contact information for questions and complaints, and a 
statement explaining how participants and beneficiaries can obtain more 
information about the notice, including:
    (1) The plan's phone number and an email or web portal address; and
    (2) The Employee Benefits Security Administration's phone number 
and email or web portal address.
    (iii) Manner of notice. The plan must make the notice required 
under paragraph (d)(4)(i) of this section available in paper form, or 
electronically (such as by email or an internet posting) if:
    (A) The format is readily accessible;
    (B) The notice is provided in paper form free of charge upon 
request; and
    (C) In a case in which the electronic form is an internet posting, 
the plan timely notifies the participant or beneficiary in paper form 
(such as a postcard) or email, that the documents are available on the 
internet, provides the internet address, includes the statement 
required in paragraph (d)(4)(ii)(A) of this section, and notifies the 
participant or beneficiary that the documents are available in paper 
form upon request.
    (e) Requests for a copy of a comparative analysis. In addition to 
making a comparative analysis available upon request to the Secretary, 
a plan must make available a copy of the comparative analysis required 
by paragraph (b) of this section when requested by:
    (1) Any applicable State authority; and
    (2) A participant or beneficiary (or a provider or other person 
acting as a participant's or beneficiary's authorized representative) 
who has received an adverse benefit determination related to mental 
health or substance use disorder benefits.
    (f) Rule of construction. Nothing in this section or Sec.  54.9812-
1 shall be construed to prevent the Secretary from acting within the 
scope of existing authorities to address violations of Sec.  54.9812-1 
or this section.
    (g) Applicability. The provisions of this section apply to group 
health plans described in Sec.  54.9812-1(e), to the extent the plan is 
not exempt under Sec.  54.9812-1(f) or (g), for plan years beginning on 
or after January 1, 2025.
    (h) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Chapter XXV

    For the reasons set forth in the preamble, the Department of Labor 
proposes to amend 29 CFR part 2590 as set forth below:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
4. The authority citation for part 2590 continues to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a-n, 1191, 1191a, 1191b, and 1191c; sec. 
101(g), Pub. L.104-191, 110 Stat. 1936; sec. 401(b), Pub. L. 105-
200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 512(d), Pub. L. 110-
343, 122 Stat. 3881; sec. 1001, 1201, and 1562(e), Pub. L. 111-148, 
124 Stat. 119, as amended by Pub. L. 111-152, 124 Stat. 1029; 
Division M, Pub. L. 113-235, 128 Stat. 2130; Pub. L. 116-260 134 
Stat. 1182; Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 
2012).

0
5. Amend Sec.  2590.712 by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding 
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,'' 
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and 
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in 
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and 
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A) 
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as 
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated 
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;
0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
i. Adding paragraph (j).
    The revisions and additions read as follows:

[[Page 51637]]

Sec.  2590.712  Parity in mental health and substance use disorder 
benefits

    (a) Purpose and meaning of terms--(1) Purpose. This section and 
Sec.  2590.712-1 set forth rules to ensure parity in aggregate lifetime 
and annual dollar limits, financial requirements, and quantitative and 
nonquantitative treatment limitations between mental health and 
substance use disorder benefits and medical/surgical benefits, as 
required under ERISA section 712. A fundamental purpose of ERISA 
section 712, this section, and Sec.  2590.712-1 is to ensure that 
participants and beneficiaries in a group health plan (or health 
insurance coverage offered by an issuer in connection with a group 
health plan) that offers mental health or substance use disorder 
benefits are not subject to more restrictive lifetime or annual dollar 
limits, financial requirements, or treatment limitations with respect 
to those benefits than the predominant dollar limits, financial 
requirements, or treatment limitations that are applied to 
substantially all medical/surgical benefits covered by the plan or 
coverage, as further provided in this section and Sec.  2590.712-1. 
Accordingly, in complying with the provisions of ERISA section 712, 
this section, and Sec.  2590.712-1, plans and issuers must not design 
or apply financial requirements and treatment limitations that impose a 
greater burden on access (that is, are more restrictive) to mental 
health and substance use disorder benefits under the plan or coverage 
than they impose on access to generally comparable medical/surgical 
benefits. The provisions of ERISA section 712, this section, and Sec.  
2590.712-1 should be interpreted in a manner that is consistent with 
the purpose described in this paragraph (a)(1).
    (2) Meaning of terms. For purposes of this section and Sec.  
2590.712-1, except where the context clearly indicates otherwise, the 
following terms have the meanings indicated:
* * * * *
    DSM means the American Psychiatric Association's Diagnostic and 
Statistical Manual of Mental Disorders. For the purpose of this 
definition, the most current version of the DSM is the version that is 
applicable no earlier than on the date that is 1 year before the first 
day of the applicable plan year.
    Evidentiary standards are any evidence, sources, or standards that 
a group health plan (or health insurance issuer offering coverage in 
connection with such a plan) considered or relied upon in designing or 
applying a factor with respect to a nonquantitative treatment 
limitation, including specific benchmarks or thresholds. Evidentiary 
standards may be empirical, statistical, or clinical in nature, and 
include: sources acquired or originating from an objective third party, 
such as recognized medical literature, professional standards and 
protocols (which may include comparative effectiveness studies and 
clinical trials), published research studies, payment rates for items 
and services (such as publicly available databases of the ``usual, 
customary and reasonable'' rates paid for items and services), and 
clinical treatment guidelines; internal plan or issuer data, such as 
claims or utilization data or criteria for assuring a sufficient mix 
and number of network providers; and benchmarks or thresholds, such as 
measures of excessive utilization, cost levels, time or distance 
standards, or network participation percentage thresholds.
    Factors are all information, including processes and strategies 
(but not evidentiary standards), that a group health plan (or health 
insurance issuer offering coverage in connection with such a plan) 
considered or relied upon to design a nonquantitative treatment 
limitation, or to determine whether or how the nonquantitative 
treatment limitation applies to benefits under the plan or coverage. 
Examples of factors include, but are not limited to: provider 
discretion in determining a diagnosis or type or length of treatment; 
clinical efficacy of any proposed treatment or service; licensing and 
accreditation of providers; claim types with a high percentage of 
fraud; quality measures; treatment outcomes; severity or chronicity of 
condition; variability in the cost of an episode of treatment; high 
cost growth; variability in cost and quality; elasticity of demand; and 
geographic location.
* * * * *
    ICD means the World Health Organization's International 
Classification of Diseases adopted by the Department of Health and 
Human Services through 45 CFR 162.1002. For the purpose of this 
definition, the most current version of the ICD is the version that is 
applicable no earlier than on the date that is 1 year before the first 
day of the applicable plan year.
    Medical/surgical benefits means benefits with respect to items or 
services for medical conditions or surgical procedures, as defined 
under the terms of the group health plan (or health insurance coverage 
offered by an issuer in connection with such a plan) and in accordance 
with applicable Federal and State law, but does not include mental 
health benefits or substance use disorder benefits. Notwithstanding the 
preceding sentence, any condition or procedure defined by the plan or 
coverage as being or as not being a medical condition or surgical 
procedure must be defined consistent with generally recognized 
independent standards of current medical practice (for example, the 
most current version of the ICD). To the extent generally recognized 
independent standards of current medical practice do not address 
whether a condition or procedure is a medical condition or surgical 
procedure, plans and issuers may define the condition or procedure in 
accordance with applicable Federal and State law.
    Mental health benefits means benefits with respect to items or 
services for mental health conditions, as defined under the terms of 
the group health plan (or health insurance coverage offered by an 
issuer in connection with such a plan) and in accordance with 
applicable Federal and State law, but does not include medical/surgical 
benefits or substance use disorder benefits. Notwithstanding the 
preceding sentence, any condition defined by the plan or coverage as 
being or as not being a mental health condition must be defined 
consistent with generally recognized independent standards of current 
medical practice. For the purpose of this definition, to be consistent 
with generally recognized independent standards of current medical 
practice, the definition must include all conditions covered under the 
plan or coverage, except for substance use disorders, that fall under 
any of the diagnostic categories listed in the mental, behavioral, and 
neurodevelopmental disorders chapter (or equivalent chapter) of the 
most current version of the ICD or that are listed in the most current 
version of the DSM. To the extent generally recognized independent 
standards of current medical practice do not address whether a 
condition is a mental health condition, plans and issuers may define 
the condition in accordance with applicable Federal and State law.
    Processes are actions, steps, or procedures that a group health 
plan (or health insurance issuer offering coverage in connection with 
such a plan) uses to apply a nonquantitative treatment limitation, 
including actions, steps, or procedures established by the plan or 
issuer as requirements in order for a participant or beneficiary to 
access benefits, including through actions by a participant's or 
beneficiary's authorized representative or a provider or facility. 
Processes include but are not limited to:

[[Page 51638]]

procedures to submit information to authorize coverage for an item or 
service prior to receiving the benefit or while treatment is ongoing 
(including requirements for peer or expert clinical review of that 
information); provider referral requirements; and the development and 
approval of a treatment plan. Processes also include the specific 
procedures used by staff or other representatives of a plan or issuer 
(or the service provider of a plan or issuer) to administer the 
application of nonquantitative treatment limitations, such as how a 
panel of staff members applies the nonquantitative treatment limitation 
(including the qualifications of staff involved, number of staff 
members allocated, and time allocated), consultations with panels of 
experts in applying the nonquantitative treatment limitation, and 
reviewer discretion in adhering to criteria hierarchy when applying a 
nonquantitative treatment limitation.
    Strategies are practices, methods, or internal metrics that a plan 
(or health insurance issuer offering coverage in connection with such a 
plan) considers, reviews, or uses to design a nonquantitative treatment 
limitation. Examples of strategies include but are not limited to: the 
development of the clinical rationale used in approving or denying 
benefits; deviation from generally accepted standards of care; the 
selection of information deemed reasonably necessary to make a medical 
necessity determination; reliance on treatment guidelines or guidelines 
provided by third-party organizations; and rationales used in selecting 
and adopting certain threshold amounts, professional protocols, and fee 
schedules. Strategies also include the creation and composition of the 
staff or other representatives of a plan or issuer (or the service 
provider of a plan or issuer) that deliberates, or otherwise makes 
decisions, on the design of nonquantitative treatment limitations, 
including the plan's decisions related to the qualifications of staff 
involved, number of staff members allocated, and time allocated; 
breadth of sources and evidence considered; consultations with panels 
of experts in designing the nonquantitative treatment limitation; and 
the composition of the panels used to design a nonquantitative 
treatment limitation.
    Substance use disorder benefits means benefits with respect to 
items or services for substance use disorders, as defined under the 
terms of the group health plan (or health insurance coverage offered by 
an issuer in connection with such a plan) and in accordance with 
applicable Federal and State law, but does not include medical/surgical 
benefits or mental health benefits. Notwithstanding the preceding 
sentence, any disorder defined by the plan or coverage as being or as 
not being a substance use disorder must be defined consistent with 
generally recognized independent standards of current medical practice. 
For the purpose of this definition, to be consistent with generally 
recognized independent standards of current medical practice, the 
definition must include all disorders covered under the plan or 
coverage that fall under any of the diagnostic categories listed as a 
mental or behavioral disorder due to psychoactive substance use (or 
equivalent category) in the mental, behavioral and neurodevelopmental 
disorders chapter (or equivalent chapter) of the most current version 
of the ICD or that are listed as a Substance-Related and Addictive 
Disorder (or equivalent category) in the most current version of the 
DSM. To the extent generally recognized independent standards of 
current medical practice do not address whether a disorder is a 
substance use disorder, plans and issuers may define the disorder in 
accordance with applicable Federal and State law.
    Treatment limitations include limits on benefits based on the 
frequency of treatment, number of visits, days of coverage, days in a 
waiting period, or other similar limits on the scope or duration of 
treatment. Treatment limitations include both quantitative treatment 
limitations, which are expressed numerically (such as 50 outpatient 
visits per year), and nonquantitative treatment limitations, which 
otherwise limit the scope or duration of benefits for treatment under a 
plan or coverage. (See paragraph (c)(4)(iii) of this section for an 
illustrative, non-exhaustive list of nonquantitative treatment 
limitations.) A complete exclusion of all benefits for a particular 
condition or disorder, however, is not a treatment limitation for 
purposes of this definition.
* * * * *
    (c) * * *
    (1) * * *
    (ii) Type of financial requirement or treatment limitation. When 
reference is made in this paragraph (c) to a type of financial 
requirement or treatment limitation, the reference to type means its 
nature. Different types of financial requirements include deductibles, 
copayments, coinsurance, and out-of-pocket maximums. Different types of 
quantitative treatment limitations include annual, episode, and 
lifetime day and visit limits. See paragraph (c)(4)(iii) of this 
section for an illustrative, non-exhaustive list of nonquantitative 
treatment limitations.
* * * * *
    (2) * * *
    (i) General rule. A group health plan (or health insurance coverage 
offered by an issuer in connection with a group health plan) that 
provides both medical/surgical benefits and mental health or substance 
use disorder benefits may not apply any financial requirement or 
treatment limitation to mental health or substance use disorder 
benefits in any classification that is more restrictive than the 
predominant financial requirement or treatment limitation of that type 
applied to substantially all medical/surgical benefits in the same 
classification. Whether a financial requirement or treatment limitation 
is a predominant financial requirement or treatment limitation that 
applies to substantially all medical/surgical benefits in a 
classification is determined separately for each type of financial 
requirement or treatment limitation. A plan or issuer may not impose 
any financial requirement or treatment limitation that is applicable 
only with respect to mental health or substance use disorder benefits 
and not to any medical/surgical benefits in the same benefit 
classification. The application of the rules of this paragraph (c)(2) 
to financial requirements and quantitative treatment limitations is 
addressed in paragraph (c)(3) of this section; the application of the 
rules of this paragraph (c)(2) to nonquantitative treatment limitations 
is addressed in paragraph (c)(4) of this section.
    (ii) * * *
    (A) In general. If a plan (or health insurance coverage) provides 
any benefits for a mental health condition or substance use disorder in 
any classification of benefits described in this paragraph (c)(2)(ii), 
benefits for that mental health condition or substance use disorder 
must be provided in every classification in which medical/surgical 
benefits are provided. For purposes of this paragraph (c)(2)(ii), a 
plan (or health insurance coverage) providing any benefits for a mental 
health condition or substance use disorder in any classification of 
benefits does not provide benefits for the mental health condition or 
substance use disorder in every classification in which medical/
surgical benefits are provided unless the plan (or health insurance 
coverage) provides meaningful benefits for treatment for that condition 
or disorder in each such classification, as determined in comparison to 
the

[[Page 51639]]

benefits provided for medical/surgical conditions in the 
classification. In determining the classification in which a particular 
benefit belongs, a plan (or health insurance issuer) must apply the 
same standards to medical/surgical benefits and to mental health or 
substance use disorder benefits. To the extent that a plan (or health 
insurance coverage) provides benefits in a classification and imposes 
any separate financial requirement or treatment limitation (or separate 
level of a financial requirement or treatment limitation) for benefits 
in the classification, the rules of this paragraph (c) apply separately 
with respect to that classification for all financial requirements or 
treatment limitations (illustrated in examples in paragraph 
(c)(2)(ii)(C) of this section). The following classifications of 
benefits are the only classifications used in applying the rules of 
this paragraph (c), in addition to the permissible sub-classifications 
described in paragraph (c)(3)(iii) of this section:
* * * * *
    (C) * * *
    (1) Example 1--(i) Facts. A group health plan offers inpatient and 
outpatient benefits and does not contract with a network of providers. 
The plan imposes a $500 deductible on all benefits. For inpatient 
medical/surgical benefits, the plan imposes a coinsurance requirement. 
For outpatient medical/surgical benefits, the plan imposes copayments. 
The plan imposes no other financial requirements or treatment 
limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because inpatient, out-of-network medical/surgical 
benefits are subject to separate financial requirements from 
outpatient, out-of-network medical/surgical benefits, the rules of this 
paragraph (c) apply separately with respect to any financial 
requirements and treatment limitations, including the deductible, in 
each classification.
    (2) Example 2--(i) Facts. A plan imposes a $500 deductible on all 
benefits. The plan has no network of providers. The plan generally 
imposes a 20 percent coinsurance requirement with respect to all 
benefits, without distinguishing among inpatient, outpatient, emergency 
care, or prescription drug benefits. The plan imposes no other 
financial requirements or treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2), 
because the plan does not impose separate financial requirements (or 
treatment limitations) based on classification, the rules of this 
paragraph (c) apply with respect to the deductible and the coinsurance 
across all benefits.
    (3) Example 3--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan 
exempts emergency care benefits from the 20 percent coinsurance 
requirement. The plan imposes no other financial requirements or 
treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3), 
because the plan imposes separate financial requirements based on 
classifications, the rules of this paragraph (c) apply with respect to 
the deductible and the coinsurance separately for benefits in the 
emergency care classification and all other benefits.
    (4) Example 4--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also 
imposes a preauthorization requirement for all inpatient treatment in 
order for benefits to be paid. No such requirement applies to 
outpatient treatment.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because the plan imposes a separate treatment 
limitation based on classifications, the rules of this paragraph (c) 
apply with respect to the deductible and coinsurance separately for 
inpatient, out-of-network benefits and all other benefits.
    (5) Example 5--(i) Facts. A plan 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 behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient 
treatments and treatment settings for medical conditions and surgical 
procedures when provided on an out-of-network basis.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Because the 
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the 
classification, but generally covers the full range of medical/surgical 
benefits in the classification, it fails to provide meaningful benefits 
for treatment of ASD in the classification.
    (6) Example 6--(i) Facts. 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/surgical conditions in the outpatient, in-
network classification.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan violates the rules of this paragraph (c)(2)(ii). 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 medical/surgical 
conditions in the classification.
    (3) * * *
    (i) * * *
    (A) Substantially all. For purposes of this paragraph (c)(3), a 
type of financial requirement or quantitative treatment limitation is 
considered to apply to substantially all medical/surgical benefits in a 
classification of benefits if it applies to at least two-thirds of all 
medical/surgical benefits in that classification. (For purposes of this 
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level 
of a type of financial requirement are treated as benefits not subject 
to that type of financial requirement, and benefits expressed as 
subject to a quantitative treatment limitation that is unlimited are 
treated as benefits not subject to that type of quantitative treatment 
limitation.) If a type of financial requirement or quantitative 
treatment limitation does not apply to at least two-thirds of all 
medical/surgical benefits in a classification, then that type cannot be 
applied to mental health or substance use disorder benefits in that 
classification.
* * * * *
    (C) Portion based on plan payments. For purposes of this paragraph 
(c)(3), the determination of the portion of medical/surgical benefits 
in a classification of benefits subject to a financial requirement or 
quantitative treatment limitation (or subject to any level of a 
financial requirement or quantitative treatment limitation) is based on 
the dollar amount of all plan payments for medical/surgical benefits in 
the classification expected to be paid under the plan for the plan year 
(or for the portion of the plan year after a change in plan benefits 
that affects the applicability of the financial

[[Page 51640]]

requirement or quantitative treatment limitation).
    (D) Clarifications for certain threshold requirements. For any 
deductible, the dollar amount of plan payments includes all plan 
payments with respect to claims that would be subject to the deductible 
if it had not been satisfied. For any out-of-pocket maximum, the dollar 
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket 
maximum if it had not been satisfied. Similar rules apply for any other 
thresholds at which the rate of plan payment changes. (See also PHS Act 
section 2707 and Affordable Care Act section 1302(c), which establish 
annual limitations on out-of-pocket maximums for all non-grandfathered 
health plans.)
* * * * *
    (iii) Special rules. Unless specifically permitted under this 
paragraph (c)(3)(iii), sub-classifications are not permitted when 
applying the rules of paragraph (c)(3) of this section.
    (A) Multi-tiered prescription drug benefits. If a plan (or health 
insurance coverage) applies different levels of financial requirements 
to different tiers of prescription drug benefits based on reasonable 
factors determined in accordance with the rules in paragraph (c)(4) of 
this section (relating to requirements for nonquantitative treatment 
limitations) and without regard to whether a drug is generally 
prescribed with respect to medical/surgical benefits or with respect to 
mental health or substance use disorder benefits, the plan (or health 
insurance coverage) satisfies the parity requirements of this paragraph 
(c) with respect to prescription drug benefits. Reasonable factors 
include cost, efficacy, generic versus brand name, and mail order 
versus pharmacy pick-up.
    (B) Multiple network tiers. If a plan (or health insurance 
coverage) provides benefits through multiple tiers of in-network 
providers (such as an in-network tier of preferred providers with more 
generous cost-sharing to participants than a separate in-network tier 
of participating providers), the plan may divide its benefits furnished 
on an in-network basis into sub-classifications that reflect network 
tiers, if the tiering is based on reasonable factors determined in 
accordance with the rules in paragraph (c)(4) of this section (such as 
quality, performance, and market standards) and without regard to 
whether a provider provides services with respect to medical/surgical 
benefits or mental health or substance use disorder benefits. After the 
sub-classifications are established, the plan or issuer may not impose 
any financial requirement or treatment limitation on mental health or 
substance use disorder benefits in any sub-classification that is more 
restrictive than the predominant financial requirement or treatment 
limitation that applies to substantially all medical/surgical benefits 
in the sub-classification using the methodology set forth in paragraph 
(c)(3)(i) of this section.
* * * * *
    (iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of 
this section are illustrated by the following examples. In each 
example, the group health plan is subject to the requirements of this 
section and provides both medical/surgical benefits and mental health 
and substance use disorder benefits.
    (A) Example 1--(1) Facts. (i) For inpatient, out-of-network 
medical/surgical benefits, a group health plan imposes five levels of 
coinsurance. Using a reasonable method, the plan projects its payments 
for the upcoming year as follows:

                                                        Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................              0%                10%                15%                20%                30%           Total
Projected payments..........................           $200x              $100x              $450x              $100x              $150x         $1,000x
Percent of total plan costs.................              20                 10                 45                 10                 15  ..............
Percent subject to coinsurance level........             N/A   12.5 (100x/800x)  56.25 (450x/800x)   12.5 (100x/800x)  18.75 (150x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) The plan projects plan costs of $800x to be subject to 
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to 
coinsurance, and 56.25 percent of the benefits subject to coinsurance 
are projected to be subject to the 15 percent coinsurance level.
    (2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the 
two-thirds threshold of the substantially all standard is met for 
coinsurance because 80 percent of all inpatient, out-of-network 
medical/surgical benefits are subject to coinsurance. Moreover, the 15 
percent coinsurance is the predominant level because it is applicable 
to more than one-half of inpatient, out-of-network medical/surgical 
benefits subject to the coinsurance requirement. The plan may not 
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more 
restrictive than the 15 percent level of coinsurance.
    (B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical benefits, a plan imposes five different copayment levels. 
Using a reasonable method, the plan projects payments for the upcoming 
year as follows:

                                                        Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................              $0                $10                $15                $20                $50           Total
Projected payments..........................           $200x              $200x              $200x              $300x              $100x         $1,000x
Percent of total plan costs.................              20                 20                 20                 30                 10  ..............
Percent subject to copayments...............             N/A     25 (200x/800x)     25 (200x/800x)   37.5 (300x/800x)   12.5 (100x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) The plan projects plan costs of $800x to be subject to 
copayments ($200x + $200x +$300x + $100x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to a 
copayment.
    (2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the 
two-thirds threshold of the substantially all standard is met for 
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to

[[Page 51641]]

a copayment. Moreover, there is no single level that applies to more 
than one-half of medical/surgical benefits in the classification 
subject to a copayment (for the $10 copayment, 25%; for the $15 
copayment, 25%; for the $20 copayment, 37.5%; and for the $50 
copayment, 12.5%). The plan can combine any levels of copayment, 
including the highest levels, to determine the predominant level that 
can be applied to mental health or substance use disorder benefits. If 
the plan combines the highest levels of copayment, the combined 
projected payments for the two highest copayment levels, the $50 
copayment and the $20 copayment, are not more than one-half of the 
outpatient, in-network medical/surgical benefits subject to a copayment 
because they are exactly one-half ($300x + $100x = $400x; $400x/$800x = 
50%). The combined projected payments for the three highest copayment 
levels--the $50 copayment, the $20 copayment, and the $15 copayment--
are more than one-half of the outpatient, in-network medical/surgical 
benefits subject to the copayments ($100x + $300x + $200x = $600x; 
$600x/$800x = 75%). Thus, the plan may not impose any copayment on 
outpatient, in-network mental health or substance use disorder benefits 
that is more restrictive than the least restrictive copayment in the 
combination, the $15 copayment.
    (C) Example 3--(1) Facts. A plan imposes a $250 deductible on all 
medical/surgical benefits for self-only coverage and a $500 deductible 
on all medical/surgical benefits for family coverage. The plan has no 
network of providers. For all medical/surgical benefits, the plan 
imposes a coinsurance requirement. The plan imposes no other financial 
requirements or treatment limitations.
    (2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3), 
because the plan has no network of providers, all benefits are provided 
out-of-network. Because self-only and family coverage are subject to 
different deductibles, whether the deductible applies to substantially 
all medical/surgical benefits is determined separately for self-only 
medical/surgical benefits and family medical/surgical benefits. Because 
the coinsurance is applied without regard to coverage units, the 
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
    (D) Example 4--(1) Facts. A plan applies the following financial 
requirements for prescription drug benefits. The requirements are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits. Moreover, the process for 
certifying a particular drug as ``generic'', ``preferred brand name'', 
``non-preferred brand name'', or ``specialty'' complies with the rules 
of paragraph (c)(4) of this section (relating to requirements for 
nonquantitative treatment limitations).

                                      Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
                                        Tier 1              Tier 2              Tier 3              Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................  Generic drugs.....  Preferred brand     Non-preferred       Specialty drugs.
                                                       name drugs.         brand name drugs
                                                                           (which may have
                                                                           Tier 1 or Tier 2
                                                                           alternatives).
Percent paid by plan............  90................  80................  60................  50.
----------------------------------------------------------------------------------------------------------------

    (2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the 
financial requirements that apply to prescription drug benefits are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits; the process for certifying drugs in 
different tiers complies with paragraph (c)(4) of this section; and the 
bases for establishing different levels or types of financial 
requirements are reasonable. The financial requirements applied to 
prescription drug benefits do not violate the parity requirements of 
this paragraph (c)(3).
    (E) Example 5--(1) Facts. A plan has two-tiers of network of 
providers: a preferred provider tier and a participating provider tier. 
Providers are placed in either the preferred tier or participating tier 
based on reasonable factors determined in accordance with the rules in 
paragraph (c)(4) of this section, such as accreditation, quality and 
performance measures (including customer feedback), and relative 
reimbursement rates. Furthermore, provider tier placement is determined 
without regard to whether a provider specializes in the treatment of 
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications 
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or 
treatment limitation on mental health or substance use disorder 
benefits in either of these sub-classifications that is more 
restrictive than the predominant financial requirement or treatment 
limitation that applies to substantially all medical/surgical benefits 
in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the 
division of in-network benefits into sub-classifications that reflect 
the preferred and participating provider tiers does not violate the 
parity requirements of this paragraph (c)(3).
    (F) Example 6--(1) Facts. With respect to outpatient, in-network 
benefits, a plan imposes a $25 copayment for office visits and a 20 
percent coinsurance requirement for outpatient surgery. The plan 
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services).The plan or issuer does not impose any 
financial requirement or quantitative treatment limitation on mental 
health or substance use disorder benefits in either of these sub-
classifications that is more restrictive than the predominant financial 
requirement or quantitative treatment limitation that applies to 
substantially all medical/surgical benefits in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the 
division of outpatient, in-network benefits into sub-classifications 
for office visits and all other outpatient, in-network items and 
services does not violate the parity requirements of this paragraph 
(c)(3).
    (G) Example 7--(1) Facts. Same facts as in paragraph 
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of 
determining parity, the plan divides the outpatient, in-network 
classification into outpatient, in-network generalists and outpatient, 
in-network specialists.

[[Page 51642]]

    (2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the 
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items 
and services violates the requirements of paragraph (c)(3)(iii)(C) of 
this section.
* * * * *
    (4) Nonquantitative treatment limitations. Subject to paragraph 
(c)(4)(v) of this section, a group health plan (or health insurance 
coverage offered by an issuer in connection with a group health plan) 
may not impose a nonquantitative treatment limitation with respect to 
mental health or substance use disorder benefits in a classification 
unless the plan's or coverage's imposition of the limitation meets the 
requirements of paragraphs (c)(4)(i), (ii), and (iv) of this section. 
If a group health plan (or health insurance coverage offered by an 
issuer in connection with a group health plan) fails to meet any of 
these requirements with respect to a nonquantitative treatment 
limitation, the limitation violates section 712(a)(3)(A)(ii) of ERISA 
and may not be imposed by the plan (or health insurance coverage).
    (i) Requirement that nonquantitative treatment limitations be no 
more restrictive for mental health benefits and substance use disorder 
benefits. A group health plan (or health insurance issuer offering 
coverage in connection with a group health plan) may not apply any 
nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in any classification that is more 
restrictive, as written or in operation, than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the same classification.
    (A) Restrictive. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is restrictive to the extent it 
imposes conditions, terms, or requirements that limit access to 
benefits under the terms of the plan or coverage. Conditions, terms, or 
requirements include, but are not limited to, those that compel an 
action by or on behalf of a participant or beneficiary to access 
benefits or limit access to the full range of treatment options 
available for a condition or disorder under the plan or coverage.
    (B) Substantially all. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is considered to apply to 
substantially all medical/surgical benefits in a classification if it 
applies to at least two-thirds of all medical/surgical benefits in that 
classification, consistent with paragraph (c)(4)(i)(D) of this section. 
Whether the nonquantitative treatment limitation applies to at least 
two-thirds of all medical/surgical benefits is determined without 
regard to whether the nonquantitative treatment limitation was 
triggered based on a particular factor or evidentiary standard. If a 
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that 
limitation cannot be applied to mental health or substance use disorder 
benefits in that classification.
    (C) Predominant. For purposes of this paragraph (c)(4)(i), the term 
predominant means the most common or most frequent variation of the 
nonquantitative treatment limitation within a classification, 
determined in accordance with the method outlined in paragraph 
(c)(4)(i)(D) of this section, to the extent the plan or issuer imposes 
multiple variations of a nonquantitative treatment limitation within 
the classification. For example, multiple variations of inpatient 
concurrent review include review commencing 1 day, 3 days, or 7 days 
after admission, depending on the reason for the stay.
    (D) Portion based on plan payments. For purposes of paragraphs 
(c)(4)(i)(B) and (C) of this section, the determination of the portion 
of medical/surgical benefits in a classification of benefits subject to 
a nonquantitative treatment limitation is based on the dollar amount of 
all plan payments for medical/surgical benefits in the classification 
expected to be paid under the plan or coverage for the plan year (or 
the portion of the plan year after a change in benefits that affects 
the applicability of the nonquantitative treatment limitation). Any 
reasonable method may be used to determine the dollar amount expected 
to be paid under a plan or coverage for medical/surgical benefits.
    (E) Exceptions for independent professional medical or clinical 
standards and standards to detect or prevent and prove fraud, waste, 
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this 
section, a plan or issuer that applies a nonquantitative treatment 
limitation that impartially applies independent professional medical or 
clinical standards or applies standards to detect or prevent and prove 
fraud, waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B) 
of this section, to mental health or substance use disorder benefits in 
any classification will not be considered to violate this paragraph 
(c)(4)(i) with respect to such nonquantitative treatment limitation.
    (ii) Additional requirements related to design and application of 
the nonquantitative treatment limitation--(A) In general. Consistent 
with paragraph (a)(1) of this section, a plan or issuer may not impose 
a nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in any classification unless, under the 
terms of the plan (or health insurance coverage) as written and in 
operation, any processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation to mental health or substance use disorder benefits in the 
classification are comparable to, and are applied no more stringently 
than, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the limitation with respect to 
medical/surgical benefits in the classification.
    (B) Prohibition on discriminatory factors and evidentiary 
standards. For purposes of determining comparability and stringency 
under paragraph (c)(4)(ii)(A) of this section, a plan or issuer may not 
rely upon any factor or evidentiary standard if the information, 
evidence, sources, or standards on which the factor or evidentiary 
standard is based discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits. For 
purposes of this paragraph (c)(4)(ii)(B):
    (1) Impartially applied generally recognized independent 
professional medical or clinical standards described in paragraph 
(c)(4)(v)(A) of this section are not considered to discriminate against 
mental health or substance use disorder benefits.
    (2) Standards reasonably designed to detect or prevent and prove 
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this 
section are not considered to discriminate against mental health or 
substance use disorder benefits.
    (3) Information is considered to discriminate against mental health 
or substance use disorder benefits if it is biased or not objective, in 
a manner that results in less favorable treatment of mental health or 
substance use disorder benefits, based on all the relevant facts and 
circumstances including, but not limited to, the source of the 
information, the purpose or context of the information, and the content 
of the information.
    (iii) Illustrative, non-exhaustive list of nonquantitative 
treatment limitations. Nonquantitative treatment limitations include--

[[Page 51643]]

    (A) Medical management standards (such as prior authorization) 
limiting or excluding benefits based on medical necessity or medical 
appropriateness, or based on whether the treatment is experimental or 
investigative;
    (B) Formulary design for prescription drugs;
    (C) For plans with multiple network tiers (such as preferred 
providers and participating providers), network tier design;
    (D) Standards related to network composition, including but not 
limited to, standards for provider and facility admission to 
participate in a network or for continued network participation, 
including methods for determining reimbursement rates, credentialing 
standards, and procedures for ensuring the network includes an adequate 
number of each category of provider and facility to provide services 
under the plan or coverage;
    (E) Plan or issuer methods for determining out-of-network rates, 
such as allowed amounts; usual, customary, and reasonable charges; or 
application of other external benchmarks for out-of-network rates;
    (F) Refusal to pay for higher-cost therapies until it can be shown 
that a lower-cost therapy is not effective (also known as fail-first 
policies or step therapy protocols);
    (G) Exclusions based on failure to complete a course of treatment; 
and
    (H) Restrictions based on geographic location, facility type, 
provider specialty, and other criteria that limit the scope or duration 
of benefits for services provided under the plan or coverage.
    (iv) Required use of outcomes data--(A) In general. When designing 
and applying a nonquantitative treatment limitation, a plan or issuer 
must collect and evaluate relevant data in a manner reasonably designed 
to assess the impact of the nonquantitative treatment limitation on 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, and consider the impact as part of the 
plan's or issuer's analysis of whether the limitation, in operation, 
complies with paragraphs (c)(4)(i) and (ii) of this section. The 
Secretary, jointly with the Secretary of the Treasury and the Secretary 
of Health and Human Services, may specify in guidance the type, form, 
and manner of collection and evaluation for the data required under 
this paragraph (c)(4)(iv)(A).
    (1) For purposes of this paragraph (c)(4)(iv)(A), relevant data 
includes, but is not limited to, the number and percentage of claims 
denials and any other data relevant to the nonquantitative treatment 
limitation required by State law or private accreditation standards.
    (2) In addition to the relevant data set forth in paragraph 
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative 
treatment limitations related to network composition standards 
includes, but is not limited to, in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges).
    (B) Material differences. Subject to paragraph (c)(4)(iv)(C) of 
this section, to the extent the relevant data evaluated pursuant to 
paragraph (c)(4)(iv)(A) of this section show material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, the differences will be considered a 
strong indicator that the plan or issuer violates paragraph (c)(4)(i) 
or (ii) of this section. In such instances, the plan or issuer:
    (1) Must take reasonable action to address the material differences 
in access as necessary to ensure compliance, in operation, with 
paragraphs (c)(4)(i) and (ii) of this section; and
    (2) Must document the action that has been or is being taken by the 
plan or issuer to mitigate any material differences in access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits, as required by Sec.  2590.712-1(c)(5)(iv).
    (C) Special rule for nonquantitative treatment limitations related 
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this 
section, when designing and applying one or more nonquantitative 
treatment limitation(s) related to network composition standards, a 
plan or issuer fails to meet the requirements of paragraphs (c)(4)(i) 
and (ii) of this section, in operation, if the relevant data show 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits in a classification.
    (D) Exception for independent professional medical or clinical 
standards. A plan or issuer designing and applying a nonquantitative 
treatment limitation with respect to mental health or substance use 
disorder benefits in any classification that impartially applies 
independent professional medical or clinical standards, as described in 
paragraph (c)(4)(v)(A) of this section, is not required to comply with 
the requirements of this paragraph (c)(4)(iv) with respect to that 
classification.
    (v) Independent professional medical or clinical standards and 
standards to detect or prevent and prove fraud, waste, and abuse. (A) 
To qualify for the exceptions in paragraphs (c)(4)(i)(E), 
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent 
professional medical or clinical standards, a nonquantitative treatment 
limitation must impartially apply generally recognized independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care) to medical/surgical benefits and mental 
health or substance use disorder benefits, and may not deviate from 
those standards in any way, such as by imposing additional or different 
requirements.
    (B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and 
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud, 
waste, and abuse, a nonquantitative treatment limitation must be 
reasonably designed to detect or prevent and prove fraud, waste, and 
abuse, based on indicia of fraud, waste, and abuse that have been 
reliably established through objective and unbiased data, and also be 
narrowly designed to minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits.
    (vi) Prohibition on separate nonquantitative treatment limitations 
applicable only to mental health or substance use disorder benefits. 
Consistent with paragraph (c)(2)(i) of this section, a group health 
plan (or health insurance coverage offered by an issuer in connection 
with such a plan) may not apply any nonquantitative treatment 
limitation that is applicable only with respect to mental health or 
substance use disorder benefits and does not apply with respect to any 
medical/surgical benefits in the same benefit classification.
    (vii) Effect of final determination of noncompliance under Sec.  
2590.712-1. If a group health plan (or health insurance issuer offering 
group health insurance coverage in connection with such a plan) 
receives a final determination from the Secretary that the plan or 
issuer is not in compliance with the requirements of Sec.  2590.712-1 
with respect to a nonquantitative treatment limitation, the 
nonquantitative treatment limitation violates this paragraph (c)(4) and 
the Secretary may direct the plan or issuer not to impose the 
nonquantitative treatment limitation, unless and until the plan or 
issuer demonstrates to the Secretary

[[Page 51644]]

compliance with the requirements of this section or takes appropriate 
action to remedy the violation.
    (viii) Examples. The rules of this paragraph (c)(4) are illustrated 
by the following examples. In each example, the group health plan is 
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder 
benefits. Additionally, in examples that conclude that the plan or 
issuer violates one provision of this paragraph (c)(4), such examples 
do not necessarily imply compliance with other provisions of this 
paragraph (c)(4), as these examples do not analyze compliance with all 
other provisions of this paragraph (c)(4).
    (A) Example 1 (More restrictive prior authorization requirement in 
operation)--(1) Facts. A plan requires prior authorization from the 
plan's utilization reviewer that a treatment is medically necessary for 
all inpatient, in-network medical/surgical benefits and for all 
inpatient, in-network mental health and substance use disorder 
benefits. While inpatient, in-network benefits for medical/surgical 
conditions are approved for periods of 1, 3, and 7 days, after which a 
treatment plan must be submitted by the patient's attending provider 
and approved by the plan, the approvals for 7 days are most common 
under this plan. For inpatient, in-network mental health and substance 
use disorder benefits, routine approval is most commonly given only for 
one day, after which a treatment plan must be submitted by the 
patient's attending provider and approved by the plan. The difference 
in the duration of approvals is not the result of independent 
professional medical or clinical standards or standards to detect or 
prevent and prove fraud, waste, and abuse, but rather reflects the 
application of a heightened standard to the provision of the mental 
health and substance use disorder benefits in the relevant 
classification.
    (2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the 
plan violates the rules of paragraph (c)(4)(i) of this section. Under 
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification 
(inpatient, in-network), since it applies to all benefits in the 
relevant classification. Further, the most common or frequent variation 
of the nonquantitative treatment limitation applied to medical/surgical 
benefits in the relevant classification (the predominant 
nonquantitative treatment limitation) is the routine approval of 
inpatient, in-network benefits for 7 days before the patient's 
attending provider must submit a treatment plan. However, the plan 
routinely approves inpatient, in-network benefits for mental health and 
substance use disorder conditions for only 1 day before the patient's 
attending provider must submit a treatment plan (and, in doing so, does 
not impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section). In operation, therefore, the prior 
authorization requirement imposed on inpatient, in-network mental 
health and substance use disorder benefits is more restrictive than the 
predominant prior authorization requirement applicable to substantially 
all medical/surgical benefits in the inpatient, in-network 
classification because the practice of approving only 1 day of 
inpatient benefits limits access to the full range of treatment options 
available for a condition or disorder under the plan or coverage as 
compared to the routine 7-day approval that is given for inpatient, in-
network medical/surgical benefits. Because the plan violates the rules 
of paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (B) Example 2 (More restrictive peer-to-peer concurrent review 
requirements in operation)--(1) Facts. A plan follows a written process 
for the concurrent review of all medical/surgical benefits and mental 
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is 
conducted in every instance in which concurrent review applies and an 
authorization request is approved by the first-level reviewer only if 
the clinical information submitted by the facility meets the plan's 
criteria for a continued stay. If the first-level reviewer is unable to 
approve the authorization request because the clinical information 
submitted by the facility does not meet the plan's criteria for a 
continued stay, it is sent to a second-level reviewer who will either 
approve or deny the request. While the written process only requires 
review by the second-level reviewer to either deny or approve the 
request, in operation, second-level reviewers for mental health and 
substance use disorder benefits conduct a peer-to-peer review with a 
provider (acting as the authorized representative of a participant or 
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional 
medical or clinical standards or standards to detect or prevent and 
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer 
review, as written or in operation, as part of the second-level review 
for medical/surgical benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
concurrent review nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits within the inpatient, 
in-network classification because the plan follows the concurrent 
review process for all medical/surgical benefits. The most common or 
frequent variation of this nonquantitative treatment limitation (the 
predominant nonquantitative treatment limitation) applicable to 
substantially all medical/surgical benefits is that peer-to-peer review 
is not imposed as part of second-level review. The plan does not 
impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section. As written, the plan's concurrent review 
requirements are the same for medical/surgical benefits and mental 
health and substance use disorder benefits. However, in operation, by 
compelling an additional action (peer-to-peer review as part of second-
level review) to access only mental health or substance use disorder 
benefits, the plan applies the limitation to mental health and 
substance use disorder benefits in a manner that is more restrictive 
than the predominant nonquantitative treatment limitation applied to 
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the rules of 
paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (C) Example 3 (More restrictive peer-to-peer review medical 
necessity standard in operation; deviation from independent 
professional medical and clinical standards)--(1) Facts. A plan 
generally requires that all treatment be medically necessary in the 
inpatient, out-of-network classification. For both medical/surgical 
benefits and mental health and substance use disorder benefits, the 
written medical necessity standards are based on independent 
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for

[[Page 51645]]

medical/surgical or mental health inpatient treatment outside of a 
hospital if the physician documents medical appropriateness, but for 
out-of-network benefits for substance use disorder inpatient treatment 
outside of a hospital, the plan requires a physician to also complete 
peer-to-peer review.
    (2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
medical necessity nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits in the inpatient, 
out-of-network classification. The most common or frequent variation of 
the nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) applicable to substantially all 
medical/surgical benefits is the requirement that a physician document 
medical appropriateness without peer-to-peer review. The plan purports 
to impartially apply independent professional medical or clinical 
standards that would otherwise qualify for the exception in paragraph 
(c)(4)(i)(E) of this section, but deviates from those standards by 
imposing the additional requirement to complete peer-to-peer review for 
inpatient, out-of-network benefits for substance use disorder outside 
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of 
this section does not apply. As written, the plan provisions apply the 
nonquantitative treatment limitation to mental health and substance use 
disorder benefits in the inpatient, out-of-network classification in 
the same manner as for medical/surgical benefits. However, in 
operation, the nonquantitative treatment limitation imposed with 
respect to out-of-network substance use disorder benefits for treatment 
outside of a hospital is more restrictive than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the classification because it limits 
access to the full range of treatment options available for a condition 
or disorder under the plan or coverage as compared to medical/surgical 
benefits in the same classification. Because the plan violates the 
rules of paragraph (c)(4)(i) of this section, this example does not 
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (D) Example 4 (Not comparable and more stringent methods for 
determining reimbursement rates in operation)--(1) Facts. A plan's base 
reimbursement rates for outpatient, in-network providers are determined 
based on a variety of factors, including the providers' required 
training, licensure, and expertise. For purposes of this example, the 
plan's nonquantitative treatment limitations for determining 
reimbursement rates for mental health and substance use disorder 
benefits are not more restrictive than the predominant nonquantitative 
treatment limitation applied to substantially all medical/surgical 
benefits in the classification under paragraph (c)(4)(i) of this 
section. As written, for mental health, substance use disorder, and 
medical/surgical benefits, all reimbursement rates for physicians and 
non-physician practitioners for the same Current Procedural Terminology 
(CPT) code vary based on a combination of factors, such as the nature 
of the service, provider type, number of providers qualified to provide 
the service in a given geographic area, and market need (demand). As a 
result, reimbursement rates for mental health, substance use disorder, 
and medical/surgical benefits furnished by non-physician providers are 
generally less than for physician providers. In operation, the plan 
reduces the reimbursement rate for mental health and substance use 
disorder non-physician providers from that paid to mental health and 
substance use disorder physicians by the same percentage for every CPT 
code but does not apply the same reductions for non-physician medical/
surgical providers.
    (2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the 
plan violates the rules of paragraph (c)(4)(ii) of this section. 
Because the plan reimburses non-physician providers of mental health 
and substance use disorder services by reducing their reimbursement 
rate from the rate to physician providers by the same percentage for 
every CPT code but does not apply the same reductions to non-physician 
providers of medical/surgical services, in operation, the factors used 
in applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits are not comparable to, and are 
applied more stringently than, the factors used in applying the 
limitation with respect to medical/surgical benefits. Because the facts 
assume that the plan's methods for determining reimbursement rates 
comply with paragraph (c)(4)(i) of this section and the plan violates 
the rules of paragraph (c)(4)(ii) of this section, this example does 
not analyze compliance with paragraph (c)(4)(iv) of this section.
    (E) Example 5 (Exception for impartially applied generally 
recognized independent professional medical or clinical standards)--(1) 
Facts. A group health plan develops a medical management requirement 
for all inpatient, out-of-network benefits for both medical/surgical 
benefits and mental health and substance use disorder benefits to 
ensure treatment is medically necessary. The medical management 
requirement impartially applies independent professional medical or 
clinical standards in a manner that qualifies for the exception in 
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any 
other factors or evidentiary standards and the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the medical management requirement to mental health and substance use 
disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the requirement with 
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management 
requirement results in a higher percentage of denials for mental health 
and substance use disorder claims than medical/surgical claims, because 
the benefits were found to be medically necessary for a lower 
percentage of mental health and substance use disorder claims based on 
the impartial application of the independent professional medical or 
clinical standards by the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the 
plan does not violate the rules of this paragraph (c)(4). The medical 
management nonquantitative treatment limitation imposed on mental 
health and substance use disorder benefits does not violate paragraph 
(c)(4)(i) or (iv) of this section because it impartially applies 
independent professional medical or clinical standards for both 
medical/surgical benefits and mental health and substance use disorder 
benefits in a manner that qualifies for the exceptions in paragraphs 
(c)(4)(i)(E) and (c)(4)(iv)(D) of this section, respectively. Moreover, 
the nonquantitative treatment limitation does not violate paragraph 
(c)(4)(ii) of this section because the independent professional medical 
or clinical standards are not considered to be a discriminatory factor 
or evidentiary standard under paragraph (c)(4)(ii)(B) of this section. 
Additionally, as written and in operation, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits in the inpatient, out-of-network classification 
are

[[Page 51646]]

comparable to, and are applied no more stringently than, the processes, 
strategies, evidentiary standards, and other factors used in applying 
the limitation with respect to medical/surgical benefits in the 
classification, regardless of the fact that the application of the 
nonquantitative treatment limitation resulted in higher percentages of 
claim denials for mental health and substance use disorder benefits as 
compared to medical/surgical benefits.
    (F) Example 6 (More restrictive prior authorization requirement; 
exception for impartially applied generally recognized independent 
professional medical or clinical standards not met)--(1) Facts. The 
provisions of a plan state that it applies independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care) for setting prior authorization requirements for 
both medical/surgical and mental health and substance use disorder 
prescription drugs. The relevant generally recognized independent 
professional medical standard for treatment of opioid use disorder that 
the plan utilizes--in this case, the American Society of Addiction 
Medicine national practice guidelines--does not support prior 
authorization every 30 days for buprenorphine/naloxone. However, in 
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of 
opioid use disorder.
    (2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of 
this section, because, although the provisions of the plan state that 
it applies independent professional medical and clinical standards, the 
plan deviates from the relevant standards with respect to prescription 
drugs to treat opioid use disorder. The prior authorization 
nonquantitative treatment limitation is applied to at least two-thirds 
of all medical/surgical benefits in the prescription drugs 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation (the predominant nonquantitative 
treatment limitation) applicable to substantially all medical/surgical 
benefits is following generally recognized independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care). The prior authorization requirements imposed on 
substance use disorder benefits are more restrictive than the 
predominant nonquantitative treatment limitation applicable to 
substantially all medical/surgical benefits in the classification, 
because the plan imposes additional requirements on substance use 
disorder benefits that limit access to the full range of treatment 
options available for a condition or disorder under the plan or 
coverage as compared to medical/surgical benefits in the same 
classification. Because the plan violates the rules of paragraph 
(c)(4)(i) of this section, this example does not analyze compliance 
with paragraph (c)(4)(ii) or (iv) of this section.
    (G) Example 7 (Impermissible nonquantitative treatment limitation 
imposed following a final determination of noncompliance and direction 
by the Secretary)--(1) Facts. Following an initial request by the 
Secretary for a plan's comparative analysis of a nonquantitative 
treatment limitation pursuant to Sec.  2590.712-1(d), the plan submits 
a comparative analysis for the nonquantitative treatment limitation. 
After review of the comparative analysis, the Secretary makes an 
initial determination that the comparative analysis fails to 
demonstrate that the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the nonquantitative 
treatment limitation to mental health or substance use disorder 
benefits in the relevant classification are comparable to, and applied 
no more stringently than, those used in designing and applying the 
limitation to medical/surgical benefits in the classification. Pursuant 
to Sec.  2590.712-1(d)(3), the plan submits a corrective action plan 
and additional comparative analyses within 45 calendar days after the 
initial determination, and the Secretary then determines that the 
additional comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). The plan receives a final 
determination of noncompliance from the Secretary, which informs the 
plan that it is not in compliance with this paragraph (c)(4) and 
directs the plan not to impose the nonquantitative treatment limitation 
by a certain date, unless and until the plan demonstrates compliance to 
the Secretary or takes appropriate action to remedy the violation. The 
plan makes no changes to its plan terms by that date and continues to 
impose the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the 
plan violates the requirements of this paragraph (c)(4) by imposing the 
nonquantitative treatment limitation after the Secretary directs the 
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this 
section.
    (H) Example 8 (Provider network admission standards not more 
restrictive and compliant with requirements for design and application 
of NQTLs)--(1) Facts. As part of a plan's standards for provider 
admission to its network, in the outpatient, in-network classification, 
any provider seeking to contract with the plan must have a certain 
number of years of supervised clinical experience. As a result of that 
standard, master's level mental health therapists are required to 
obtain supervised clinical experience beyond their licensure, while 
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their 
licensure because their licensure already requires supervised clinical 
experience. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation. This includes in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges). This 
data demonstrates that participants and beneficiaries seeking 
outpatient care are able to access outpatient, in-network mental health 
and substance use disorder providers at the same frequency as 
outpatient, in-network medical/surgical providers, that mental health 
and substance use disorder providers are active in the network and are 
accepting new patients to the same extent as medical/surgical 
providers, and that mental health and substance use disorder providers 
are within similar time and distances to plan participants and 
beneficiaries as are medical/surgical providers. This data also does 
not identify material differences in what the plan or issuer pays 
psychiatrists or non-physician mental health providers, compared to 
physicians or non-physician medical/surgical providers, respectively, 
both for the same reimbursement codes and as compared to Medicare 
rates.
    (2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the 
plan does not violate this paragraph (c)(4). The standards for this 
nonquantitative treatment limitation, namely provider admission to the 
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it 
applies to all medical/surgical benefits in the classification. The 
most

[[Page 51647]]

common or frequent variation of this nonquantitative treatment 
limitation (the predominant nonquantitative treatment limitation) that 
applies to substantially all medical/surgical benefits in the 
classification is having a certain number of years of supervised 
clinical experience. The standards for provider admission to the plan's 
network that are imposed with respect to mental health or substance use 
disorder benefits are no more restrictive, as written or in operation, 
than the predominant variation of the nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
the classification, because the standards do not limit access to the 
full range of treatment options available for a condition or disorder 
under the plan or coverage as compared to medical/surgical benefits in 
the same classification. The requirement that providers have a certain 
number of years of supervised clinical experience that the plan relied 
upon to design and apply the nonquantitative treatment limitation is 
not considered to discriminate against mental health or substance use 
disorder benefits, even though this results in the requirement that 
master's level mental health therapists obtain supervised clinical 
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the 
processes, strategies, evidentiary standards, or other factors used in 
applying the nonquantitative treatment limitation to mental health or 
substance use disorder benefits 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 benefits in the 
classification, because the plan applies the same standard to all 
providers in the classification. Finally, the plan or issuer collects 
and evaluates relevant data in a manner reasonably designed to assess 
the impact of the nonquantitative treatment limitation on access to 
mental health and substance use disorder benefits, which does not show 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
    (I) Example 9 (More restrictive requirement for primary caregiver 
participation applied to ABA therapy)--(1) Facts. A plan generally 
applies medical necessity criteria in adjudicating claims for coverage 
of all outpatient, in-network medical/surgical and mental health and 
substance use disorder benefits, including ABA therapy for the 
treatment of ASD, which is a mental health condition. The plan's 
medical necessity criteria for coverage of ABA therapy requires 
evidence that the participant's or beneficiary's primary caregivers 
actively participate in ABA therapy, as documented by consistent 
attendance in parent, caregiver, or guardian training sessions. In 
adding this requirement, the plan deviates from independent 
professional medical or clinical standards, and there are no similar 
medical necessity criteria requiring evidence of primary caregiver 
participation in order to receive coverage of any medical/surgical 
benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the 
plan violates paragraph (c)(4)(i) of this section. The plan applies 
medical necessity criteria to at least two-thirds of all outpatient, 
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent 
variation of this nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) that applies to substantially all 
medical/surgical benefits in the classification does not include the 
requirement to provide evidence that the participant's or beneficiary's 
primary caregivers actively participate in the treatment. The plan does 
not qualify for the exception in paragraph (c)(4)(i)(E) of this section 
in applying its restriction on coverage for ABA therapy because the 
plan deviates from the independent professional medical or clinical 
standards by imposing a different requirement. As a result, the 
nonquantitative treatment limitation imposed on mental health and 
substance use disorder benefits is more restrictive than the 
predominant medical necessity requirement imposed on substantially all 
medical/surgical benefits in the classification (which does not include 
the requirement to provide evidence that primary caregivers actively 
participate in treatment). Because the plan violates the rules of 
paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (J) Example 10 (More restrictive exclusion for experimental or 
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as 
written, generally excludes coverage for all treatments that are 
experimental or investigative for both medical/surgical benefits and 
mental health and substance use disorder benefits in the outpatient, 
in-network classification. As a result, the plan generally excludes 
experimental treatment of medical conditions and surgical procedures, 
mental health conditions, and substance use disorders when no 
professionally recognized treatment guidelines define clinically 
appropriate standards of care for the condition or disorder and fewer 
than two randomized controlled trials are available to support the 
treatment's use with respect to the given condition or disorder. The 
plan provides benefits for the treatment of ASD, which is a mental 
health condition, but, in operation, the plan excludes coverage for ABA 
therapy to treat children with ASD, deeming it experimental. More than 
one professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
coverage exclusion for experimental or investigative treatment applies 
to at least two-thirds of all medical/surgical benefits, as it applies 
to all medical/surgical benefits in the outpatient, in-network 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation in the classification (the 
predominant nonquantitative treatment limitation) applicable to 
substantially all medical/surgical benefits is the exclusion under the 
plan for coverage of experimental treatment of medical/surgical 
conditions when no professionally recognized treatment guidelines 
define clinically appropriate standards of care for the condition or 
disorder and fewer than two randomized controlled trials are available 
to support the treatment's use with respect to the given condition or 
procedure. In operation, the exclusion for experimental or 
investigative treatment imposed on ABA therapy is more restrictive than 
the predominant variation of the nonquantitative treatment limitation 
for experimental or investigative treatment imposed on substantially 
all medical/surgical benefits in the classification because the 
exclusion limits access to the full range of treatment options 
available for a condition or disorder under the plan or coverage as 
compared to medical/surgical benefits in the same classification. 
Because the plan violates the rules of paragraph (c)(4)(i) of this 
section, this example does not analyze

[[Page 51648]]

compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (K) Example 11 (Separate EAP exhaustion treatment limitation 
applicable only to mental health benefits)--(1) Facts. An employer 
maintains both a major medical plan and an employee assistance program 
(EAP). The EAP provides, among other benefits, a limited number of 
mental health or substance use disorder counseling sessions, which, 
together with other benefits provided by the EAP, are not significant 
benefits in the nature of medical care. Participants are eligible for 
mental health or substance use disorder benefits under the major 
medical plan only after exhausting the counseling sessions provided by 
the EAP. No similar exhaustion requirement applies with respect to 
medical/surgical benefits provided under the major medical plan.
    (2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11), 
limiting eligibility for mental health and substance use disorder 
benefits under the major medical plan until EAP benefits are exhausted 
is a nonquantitative treatment limitation subject to the parity 
requirements of this paragraph (c). Because the limitation does not 
apply to medical/surgical benefits, it is a separate nonquantitative 
treatment limitation applicable only to mental health and substance use 
disorder benefits that violates paragraph (c)(4)(vi) of this section. 
Additionally, this EAP would not qualify as excepted benefits under 
Sec.  2590.732(c)(3)(vi)(B)(1) because participants in the major 
medical plan are required to use and exhaust benefits under the EAP 
(making the EAP a gatekeeper) before an individual is eligible for 
benefits under the plan.
    (L) Example 12 (Separate residential exclusion treatment limitation 
applicable only to mental health benefits)--(1) Facts. A plan generally 
covers inpatient, in-network and inpatient out-of-network treatment in 
any setting, including skilled nursing facilities and rehabilitation 
hospitals, provided other medical necessity standards are satisfied. 
The plan also has an exclusion for residential treatment, which the 
plan defines as an inpatient benefit, for mental health and substance 
use disorder benefits. This exclusion was not generated through any 
broader nonquantitative treatment limitation (such as medical necessity 
or other clinical guideline).
    (2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the 
plan violates the rules of paragraph (c)(4)(vi) of this section. 
Because the plan does not apply a comparable exclusion to inpatient 
benefits for medical/surgical conditions, the exclusion of residential 
treatment is a separate nonquantitative treatment limitation applicable 
only to mental health and substance use disorder benefits in the 
inpatient, in-network and inpatient, out-of-network classifications 
that does not apply with respect to any medical/surgical benefits in 
the same benefit classification.
    (M) Example 13 (Standards for provider admission to a network)--(1) 
Facts. A plan applies nonquantitative treatment limitations related to 
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by 
separate service providers for medical/surgical benefits and mental 
health and substance use disorder benefits. For purposes of this 
example, these facts assume that these nonquantitative treatment 
limitations related to network composition for mental health and 
substance use disorder benefits are not more restrictive than the 
predominant nonquantitative treatment limitations applied to 
substantially all medical/surgical benefits in the classifications 
under paragraph (c)(4)(i) of this section. The facts also assume that, 
as written and in operation, the processes, strategies, evidentiary 
standards, and other factors used in designing and applying the 
nonquantitative treatment limitations related to network access to 
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph 
(c)(4)(ii) of this section. The plan collects and evaluates all 
relevant data in a manner reasonably designed to assess the impact of 
the nonquantitative treatment limitations related to network 
composition on access to mental health and substance use disorder 
benefits as compared with access to medical/surgical benefits and 
considers the impact as part of the plan's or issuer's analysis of 
whether the standards, in operation, comply with paragraphs (c)(4)(i) 
and (ii) of this section. The plan determined that the data did not 
reveal any material differences in access. That data included metrics 
relating to the time and distance from plan participants and 
beneficiaries to network providers in rural and urban regions; the 
number of network providers accepting new patients; the proportions of 
mental health and substance use disorder and medical/surgical providers 
and facilities that provide services in rural and urban regions who are 
in the plan's network; provider reimbursement rates; in-network and 
out-of-network utilization rates (including data related to the dollar 
value and number of provider claims submissions); and survey data from 
participants on the extent to which they forgo or pay out-of-pocket for 
treatment because of challenges finding in-network providers. The 
efforts the plan made when designing and applying its nonquantitative 
treatment limitations related to network composition, which ultimately 
led to its outcomes data not revealing any material differences in 
access to benefits for mental health or substance use disorders as 
compared with medical/surgical benefits, included making sure that the 
plan's service providers are making special efforts to enroll available 
providers, including by authorizing greater compensation or other 
inducements to the extent necessary, and expanding telehealth 
arrangements as appropriate to manage regional shortages. The plan also 
notifies participants in clear and prominent language on its website, 
employee brochures, and the summary plan description of a toll-free 
number available to help participants find in-network providers. In 
addition, when plan participants submit bills for out-of-network items 
and services, the plan directs their service providers to reach out to 
the treating providers and facilities to see if they will enroll in the 
network.
    (2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the 
plan does not violate this paragraph (c)(4). As stated in the Facts 
section, the plan's nonquantitative treatment limitations related to 
network composition comply with the rules of paragraphs (c)(4)(i) and 
(ii) of this section. The plan collects and evaluates relevant data, as 
required under paragraph (c)(4)(iv)(A) of this section, and the data 
does not reveal any material differences in access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits, as a result of the actions the plan took (as set forth in the 
facts) when initially designing its nonquantitative treatment 
limitations related to network composition. Because the plan takes 
comparable actions to ensure that their mental health and substance use 
disorder provider network is as accessible as their medical/surgical 
provider network and

[[Page 51649]]

exercises careful oversight over both their service providers and the 
comparative robustness of the networks with an eye to ensuring that 
network composition results in access to in-network benefits for mental 
health and substance use disorder services that is as generous as for 
medical/surgical services, plan participants and beneficiaries can 
access covered mental health and substance use disorder services and 
benefits as readily as medical/surgical benefits. This is reflected in 
the plan's carefully designed metrics and assessment of network 
composition.
* * * * *
    (d) * * *
    (3) Provisions of other law. Compliance with the disclosure 
requirements in paragraphs (d)(1) and (2) of this section is not 
determinative of compliance with any other provision of applicable 
Federal or State law. In particular, in addition to those disclosure 
requirements, provisions of other applicable law require disclosure of 
information relevant to medical/surgical, mental health, and substance 
use disorder benefits. For example, ERISA section 104 and Sec.  
2520.104b-1 of this chapter provide that, for plans subject to ERISA, 
instruments under which the plan is established or operated must 
generally be furnished to plan participants within 30 days of request. 
Instruments under which the plan is established or operated include 
documents with information on medical necessity criteria for both 
medical/surgical benefits and mental health and substance use disorder 
benefits; the processes, strategies, evidentiary standards, and other 
factors used to apply a nonquantitative treatment limitation with 
respect to medical/surgical benefits and mental health or substance use 
disorder benefits under the plan; and the comparative analyses and 
other applicable information required by Sec.  2590.712-1. In addition, 
Sec.  2560.503-1 of this chapter and Sec.  2590.715-2719 set forth 
rules regarding claims and appeals, including the right of claimants 
(or their authorized representative) upon appeal of an adverse benefit 
determination (or a final internal adverse benefit determination) to be 
provided upon request and free of charge, reasonable access to and 
copies of all documents, records, and other information relevant to the 
claimant's claim for benefits. This includes documents with information 
on medical necessity criteria for both medical/surgical benefits and 
mental health and substance use disorder benefits, as well as the 
processes, strategies, evidentiary standards, and other factors used to 
apply a nonquantitative treatment limitation with respect to medical/
surgical benefits and mental health or substance use disorder benefits 
under the plan and the comparative analyses and other applicable 
information required by Sec.  2590.712-1.
    (e)
* * * * *
    (4) Coordination with EHB requirements. Nothing in paragraph (f) or 
(g) of this section or Sec.  2590.712-1(g) changes the requirements of 
45 CFR 147.150 and 156.115, providing that a health insurance issuer 
offering non-grandfathered health insurance coverage in the individual 
or small group market providing mental health and substance use 
disorder services, including behavioral health treatment services, as 
part of essential health benefits required under 45 CFR 156.110(a)(5) 
and 156.115(a), must comply with the requirements under section 2726 of 
the Public Health Service Act and its implementing regulations to 
satisfy the requirement to provide coverage for mental health and 
substance use disorder services, including behavioral health treatment, 
as part of essential health benefits.
* * * * *
    (i) * * *
    (1) In general. Except as provided in paragraph (i)(2) of this 
section, this section applies to group health plans and health 
insurance issuers offering group health insurance coverage on the first 
day of the first plan year beginning on or after January 1, 2025. Until 
the applicability date in the preceding sentence, plans and issuers are 
required to continue to comply with 29 CFR 2590.712, revised as of July 
1, 2022.
* * * * *
    (j) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.
0
6. Add Sec.  2590.712-1 to read as follows:


Sec.  2590.712-1  Nonquantitative treatment limitation comparative 
analysis requirements.

    (a) Meaning of terms. Unless otherwise stated in this section, the 
terms of this section have the meanings indicated in Sec.  
2590.712(a)(2).
    (b) In general. In the case of a group health plan (or health 
insurance issuer offering group health insurance coverage in connection 
with a group health plan) that provides both medical/surgical benefits 
and mental health or substance use disorder benefits and that imposes 
any nonquantitative treatment limitation on mental health or substance 
use disorder benefits, the plan or issuer must perform and document a 
comparative analysis of the design and application of each 
nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits. Each comparative analysis must comply 
with the content requirements of paragraph (c) of this section and be 
made available to the Secretary, upon request, in the manner required 
by paragraphs (d) and (e) of this section.
    (c) Comparative analysis content requirements. With respect to each 
nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits under a group health plan (or health 
insurance coverage offered in connection with a group health plan), the 
comparative analysis performed by the plan or issuer must include, at 
minimum, the elements specified in this paragraph (c). In addition to 
the comparative analysis for each nonquantitative treatment limitation, 
each plan or issuer must prepare and make available to the Secretary, 
upon request, a written list of all nonquantitative treatment 
limitations imposed under the plan or coverage and a general 
description of any information considered or relied upon by the plan or 
issuer in preparing the comparative analysis for each nonquantitative 
treatment limitation. This list and general description must be 
provided to the named fiduciaries of the plan who are required to 
review the findings or conclusions of each comparative analysis, as 
required under paragraph (c)(6)(vi) of this section.
    (1) Description of the nonquantitative treatment limitation. The 
comparative analysis must include, with respect to the nonquantitative 
treatment limitation that is the subject of the comparative analysis:
    (i) Identification of the nonquantitative treatment limitation, 
including the specific terms of the plan or coverage or other relevant 
terms regarding the nonquantitative treatment

[[Page 51650]]

limitation, the policies or guidelines (internal or external) in which 
the nonquantitative treatment limitation appears or is described, and 
the applicable sections of any other relevant documents, such as 
provider contracts, that describe the nonquantitative treatment 
limitation;
    (ii) Identification of all mental health or substance use disorder 
benefits and medical/surgical benefits to which the nonquantitative 
treatment limitation applies, including a list of which benefits are 
considered mental health or substance use disorder benefits and which 
benefits are considered medical/surgical benefits;
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  2590.712(c)(2)(ii)(A); and
    (iv) Identification of the predominant nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
each classification, including an explanation of how the plan or issuer 
determined which variation is the predominant nonquantitative treatment 
limitation as compared to other variations, as well as how the plan 
identified the variations of the nonquantitative treatment limitation.
    (2) Identification and definition of the factors used to design or 
apply the nonquantitative treatment limitation. The comparative 
analysis must include, with respect to every factor considered or 
relied upon to design the nonquantitative treatment limitation or apply 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits and medical/surgical benefits:
    (i) Identification of all of the factors considered, as well as the 
evidentiary standards considered or relied upon to design or apply each 
factor and the sources from which each evidentiary standard was 
derived, in determining which mental health or substance use disorder 
benefits and which medical/surgical benefits are subject to the 
nonquantitative treatment limitation; and
    (ii) A definition of each factor, including:
    (A) A detailed description of the factor; and
    (B) A description of each evidentiary standard (and the source of 
each evidentiary standard) identified under paragraph (c)(2)(i) of this 
section.
    (3) Description of how factors are used in the design and 
application of the nonquantitative treatment limitation. The 
comparative analysis must include a description of how each factor 
identified and defined pursuant to paragraph (c)(2) of this section is 
used in the design or application of the nonquantitative treatment 
limitation to mental health and substance use disorder benefits and 
medical/surgical benefits in a classification, including:
    (i) A detailed explanation of how each factor identified and 
defined in paragraph (c)(2) of this section is used to determine which 
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment 
limitation;
    (ii) An explanation of the evidentiary standards or other 
information or sources (if any) considered or relied upon in designing 
or applying the factors or relied upon in designing and applying the 
nonquantitative treatment limitation, including in the determination of 
whether and how mental health or substance use disorder benefits or 
medical/surgical benefits are subject to the nonquantitative treatment 
limitation;
    (iii) If the application of the factor depends on specific 
decisions made in the administration of benefits, the nature of the 
decisions, the timing of the decisions, and the professional 
designation and qualifications of each decision maker;
    (iv) If more than one factor is identified and defined in paragraph 
(c)(2) of this section, an explanation of:
    (A) How all of the factors relate to each other;
    (B) The order in which all the factors are applied, including when 
they are applied;
    (C) Whether and how any factors are given more weight than others; 
and
    (D) The reasons for the ordering or weighting of the factors; and
    (v) Any deviation(s) or variation(s) from a factor, its 
applicability, or its definition (including the evidentiary standards 
used to define the factor and the information or sources from which 
each evidentiary standard was derived), such as how the factor is used 
differently to apply the nonquantitative treatment limitation to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan or issuer 
establishes such deviation(s) or variation(s).
    (4) Demonstration of comparability and stringency as written. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan (or health insurance coverage) as written, 
any processes, strategies, evidentiary standards, or other factors used 
in designing and applying the nonquantitative treatment limitation to 
mental health or substance use disorder benefits are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, or other factors used in designing and applying 
the nonquantitative treatment limitation with respect to medical/
surgical benefits. The comparative analysis must include, with respect 
to the nonquantitative treatment limitation and the factors used in 
designing and applying the nonquantitative treatment limitation:
    (i) Documentation of each factor identified and defined in 
paragraph (c)(2) of this section that was applied to determine whether 
the nonquantitative treatment limitation applies to mental health or 
substance use disorder benefits and medical/surgical benefits in a 
classification, including, as relevant:
    (A) Quantitative data, calculations, or other analyses showing 
whether, in each classification in which the nonquantitative treatment 
limitation applies, mental health or substance use disorder benefits 
and medical/surgical benefits met or did not meet any applicable 
threshold identified in the relevant evidentiary standard, and the 
evaluation of relevant data as required under Sec.  
2590.712(c)(4)(iv)(A), to determine that the nonquantitative treatment 
limitation would or would not apply; and
    (B) Records maintained by the plan or issuer documenting the 
consideration and application of all factors and evidentiary standards, 
as well as the results of their application;
    (ii) In each classification in which the nonquantitative treatment 
limitation applies to mental health or substance use disorder benefits, 
a comparison of how the nonquantitative treatment limitation, as 
written, is applied to mental health or substance use disorder benefits 
and to medical/surgical benefits, including the specific provisions of 
any forms, checklists, procedure manuals, or other documentation used 
in designing and applying the nonquantitative treatment limitation or 
that address the application of the nonquantitative treatment 
limitation;
    (iii) Documentation demonstrating how the factors are comparably 
applied, as written, to mental health or substance use disorder 
benefits and medical/surgical benefits in each classification, to 
determine which benefits are subject to the nonquantitative treatment 
limitation; and
    (iv) An explanation of the reason(s) for any deviation(s) or 
variation(s) in the application of a factor used to apply the 
nonquantitative treatment limitation, or the application of the 
nonquantitative treatment limitation, to mental health or

[[Page 51651]]

substance use disorder benefits as compared to medical/surgical 
benefits, and how the plan or issuer establishes such deviation(s) or 
variation(s), including:
    (A) In the definition of the factors, the evidentiary standards 
used to define the factors, and the sources from which the evidentiary 
standards were derived;
    (B) In the design of the factors or evidentiary standards; or
    (C) In the application or design of the nonquantitative treatment 
limitation.
    (5) Demonstration of comparability and stringency in operation. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan (or health insurance coverage) in 
operation, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation to mental health or substance use disorder benefits are 
comparable to, and are applied no more stringently than, the processes, 
strategies, evidentiary standards, or other factors used in designing 
and applying the limitation with respect to medical/surgical benefits. 
The comparative analysis must include, with respect to the 
nonquantitative treatment limitation and the factors used in designing 
and applying the nonquantitative treatment limitation:
    (i) A comprehensive explanation of how the plan or issuer ensures 
that, in operation, the processes, strategies, evidentiary standards, 
or other factors used in designing and applying the nonquantitative 
treatment limitation to mental health or substance use disorder 
benefits in a classification are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, or 
other factors used in designing and applying the nonquantitative 
treatment limitation with respect to medical/surgical benefits, 
including:
    (A) An explanation of any methodology and underlying data used to 
demonstrate the application of the nonquantitative treatment 
limitation, in operation; and
    (B) The sample period, inputs used in any calculations, definitions 
of terms used, and any criteria used to select the mental health or 
substance use disorder benefits and medical/surgical benefits to which 
the nonquantitative treatment limitation is applicable;
    (ii) Identification of the relevant data collected and evaluated as 
required under Sec.  2590.712(c)(4)(iv)(A);
    (iii) An evaluation of the outcomes that resulted from the 
application of the nonquantitative treatment limitation to mental 
health or substance use disorder benefits and medical/surgical 
benefits, including the relevant data as required under Sec.  
2590.712(c)(4)(iv)(A);
    (iv) A detailed explanation of material differences in outcomes 
evaluated pursuant to paragraph (c)(5)(iii) of this section that are 
not attributable to differences in the comparability or relative 
stringency of the nonquantitative treatment limitation as applied to 
mental health or substance use disorder benefits and medical/surgical 
benefits and the bases for concluding that material differences in 
outcomes are not attributable to differences in the comparability or 
relative stringency of the nonquantitative treatment limitation; and
    (v) A discussion of any measures that have been or are being 
implemented by the plan or issuer to mitigate any material differences 
in access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits, including the actions the plan 
or issuer is taking under Sec.  2590.712(c)(4)(iv)(B)(1) to address 
material differences to ensure compliance with Sec.  2590.712(c)(4)(i) 
and (ii).
    (6) Findings and conclusions. The comparative analysis must address 
the findings and conclusions as to the comparability of the processes, 
strategies, evidentiary standards, and other factors used in designing 
and applying the nonquantitative treatment limitation to mental health 
or substance use disorder benefits and medical/surgical benefits within 
each classification, and the relative stringency of their application, 
both as written and in operation, and include:
    (i) Any findings or conclusions indicating that the plan or 
coverage is not (or might not be) in compliance with the requirements 
of Sec.  2590.712(c)(4), including any actions the plan or issuer has 
taken or intends to take to address any potential areas of concern or 
noncompliance;
    (ii) A reasoned and detailed discussion of the findings and 
conclusions described in paragraph (c)(6)(i) of this section;
    (iii) Citations to any additional specific information not 
otherwise included in the comparative analysis that supports the 
findings and conclusions described in paragraph (c)(6)(i) of this 
section;
    (iv) The date of the analysis and the title and credentials of all 
relevant persons who participated in the performance and documentation 
of the comparative analysis;
    (v) If the comparative analysis relies upon an evaluation by a 
reviewer or consultant considered by the plan or issuer to be an 
expert, an assessment of each expert's qualifications and the extent to 
which the plan or issuer ultimately relied upon each expert's 
evaluation in performing and documenting the comparative analysis of 
the design and application of each nonquantitative treatment limitation 
applicable to both mental health or substance use disorder benefits and 
medical/surgical benefits; and
    (vi) A certification by one or more named fiduciaries who have 
reviewed the comparative analysis stating whether they found the 
comparative analysis to be in compliance with the content requirements 
of paragraph (c) of this section.
    (d) Requirements related to submission of comparative analyses to 
the Secretary upon request--(1) Initial request by the Secretary for 
comparative analysis. A group health plan or health insurance issuer 
offering group health insurance coverage must make the comparative 
analysis required by paragraph (b) of this section available and submit 
it to the Secretary within 10 business days of receipt of a request 
from the Secretary (or an additional period of time specified by the 
Secretary).
    (2) Additional information required after a comparative analysis is 
deemed to be insufficient. In instances in which the Secretary 
determines that the plan or issuer has not submitted sufficient 
information under paragraph (d)(1) of this section for the Secretary to 
review the comparative analysis required in paragraph (b) of this 
section, the Secretary will specify to the plan or issuer the 
additional information the plan or issuer must submit to the Secretary 
to be responsive to the request under paragraph (d)(1) of this section. 
Any such information must be provided to the Secretary by the plan or 
issuer within 10 business days after the Secretary specifies the 
additional information to be submitted (or an additional period of time 
specified by the Secretary).
    (3) Initial determination of noncompliance, required action, and 
corrective action plan. In instances in which the Secretary reviewed 
the comparative analysis submitted under paragraph (d)(1) of this 
section and any additional information submitted under paragraph (d)(2) 
of this section, and made an initial determination that the plan or 
issuer is not in compliance with the requirements of Sec.  
2590.712(c)(4) or this section, the plan or issuer must respond to the 
Secretary and specify the actions the plan or issuer will take to bring 
the plan or coverage into

[[Page 51652]]

compliance, and provide to the Secretary additional comparative 
analyses meeting the requirements of paragraph (b) of this section that 
demonstrate compliance with Sec.  2590.712(c)(4) and this section, not 
later than 45 calendar days after the Secretary's initial determination 
that the plan or issuer is not in compliance.
    (4) Requirement to notify participants and beneficiaries of final 
determination of noncompliance--(i) In general. If the Secretary makes 
a final determination of noncompliance, the plan or issuer must notify 
all participants and beneficiaries enrolled in the plan or coverage 
that the plan or issuer has been determined to not be in compliance 
with the requirements of Sec.  2590.712(c)(4) or this section with 
respect to such plan or coverage. Such notice must be provided within 7 
calendar days of receipt of the final determination of noncompliance, 
and the plan or issuer must provide a copy of the notice to the 
Secretary, and any service provider involved in the claims process, and 
any fiduciary responsible for deciding benefit claims within the same 
time frame.
    (ii) Content of notice. The notice to participants and 
beneficiaries required in paragraph (d)(4)(i) of this section shall be 
written in a manner calculated to be understood by the average plan 
participant and must include, in plain language, the following 
information in a standalone notice:
    (A) The following statement prominently displayed on the first 
page, in no less than 14-point font: ``Attention! The Department of 
Labor has determined that [insert the name of group health plan or 
health insurance issuer] is not in compliance with the Mental Health 
Parity and Addiction Equity Act.'';
    (B) A summary of changes the plan or issuer has made as part of its 
corrective action plan specified to the Secretary following the initial 
determination of noncompliance, including an explanation of any 
opportunity for a participant or beneficiary to have a claim for 
benefits reprocessed;
    (C) A summary of the Secretary's final determination that the plan 
or issuer is not in compliance with Sec.  2590.712(c)(4) or this 
section, including any provisions or practices identified as being in 
violation of MHPAEA, additional corrective actions identified by the 
Secretary in the final determination notice, and information on how 
participants and beneficiaries can obtain from the plan or issuer a 
copy of the final determination of noncompliance;
    (D) Any additional actions the plan or issuer is taking to come 
into compliance with Sec.  2590.712(c)(4) or this section, when the 
plan or issuer will take such actions, and a clear and accurate 
statement explaining whether the Secretary has indicated that those 
actions, if completed, will result in compliance; and
    (E) Contact information for questions and complaints, and a 
statement explaining how participants and beneficiaries can obtain more 
information about the notice, including:
    (1) The plan's or issuer's phone number and an email or web portal 
address; and
    (2) The Employee Benefits Security Administration's phone number 
and email or web portal address.
    (iii) Manner of notice. The plan or issuer must make the notice 
required under paragraph (d)(4)(i) of this section available in paper 
form, or electronically (such as by email or an internet posting) if:
    (A) The format is readily accessible;
    (B) The notice is provided in paper form free of charge upon 
request; and
    (C) In a case in which the electronic form is an internet posting, 
the plan or issuer timely notifies the participant or beneficiary in 
paper form (such as a postcard) or email, that the documents are 
available on the internet, provides the internet address, includes the 
statement required in paragraph (d)(4)(ii)(A) of this section, and 
notifies the participant or beneficiary that the documents are 
available in paper form upon request.
    (e) Requests for a copy of a comparative analysis. In addition to 
making a comparative analysis available upon request to the Secretary, 
a plan or issuer must make available a copy of the comparative analysis 
required by paragraph (b) of this section when requested by:
    (1) Any applicable State authority;
    (2) A participant or beneficiary (or a provider or other person 
acting as a participant's or beneficiary's authorized representative) 
who has received an adverse benefit determination related to mental 
health or substance use disorder benefits; and
    (3) Participants and beneficiaries, who may request the comparative 
analysis at any time under ERISA section 104.
    (f) Rule of construction. Nothing in this section or Sec.  2590.712 
shall be construed to prevent the Secretary from acting within the 
scope of existing authorities to address violations of Sec.  2590.712 
or this section.
    (g) Applicability. The provisions of this section apply to group 
health plans and health insurance issuers offering group health 
insurance coverage described in Sec.  2590.712(e), to the extent the 
plan or issuer is not exempt under Sec.  2590.712(f) or (g), for plan 
years beginning on or after January 1, 2025.
    (h) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.

DEPARTMENT OF HEALTH AND HUMAN SERVICES

    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend 45 CFR parts 146 and 147 as set 
forth below:

PART 146--REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET

0
7. The authority citation for part 146 continues to read as follows:

    Authority:  42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 through 
300gg-23, 300gg-91, and 300gg-92.
0
8. Amend Sec.  146.136 is amended by:
0
a. Redesignating paragraph (a) as paragraph (a)(2) and adding 
paragraphs (a) heading and (a)(1);
0
b. In newly redesignated paragraph (a)(2):
0
i. Revising the introductory text;
0
ii. Adding the definitions of ``DSM,'' ``Evidentiary standards,'' 
``Factors,'' and ``ICD'' in alphabetical order;
0
iii. Revising the definitions of ``Medical/surgical benefits'' and 
``Mental health benefits'';
0
iv. Adding the definitions of ``Processes'' and ``Strategies'' in 
alphabetical order; and
0
v. Revising the definitions of ``Substance use disorder benefits'' and 
``Treatment limitations'';
0
c. Revising paragraphs (c)(1)(ii), (c)(2)(i), and (c)(2)(ii)(A) 
introductory text;
0
d. In paragraph (c)(2)(ii)(C), designating Examples 1 through 4 as 
paragraphs (c)(2)(ii)(C)(1) through (4) and revising newly designated 
paragraphs (c)(2)(ii)(C)(1) through (4);
0
e. Adding paragraphs (c)(2)(ii)(C)(5) and (6);
0
f. Revising paragraphs (c)(3)(i)(A), (C), and (D);
0
g. In paragraph (c)(3)(iii), adding introductory text;

[[Page 51653]]

0
h. Revising paragraphs (c)(3)(iii)(A) and (B), (c)(3)(iv), (c)(4), 
(d)(3), (e)(4), and (i)(1); and
0
I, Adding paragraph (j).
    The revisions and additions read as follows:


Sec.  146.136  Parity in mental health and substance use disorder 
benefits.

    (a) Purpose and meaning of terms--(1) Purpose. This section and 
Sec.  146.137 set forth rules to ensure parity in aggregate lifetime 
and annual dollar limits, financial requirements, and quantitative and 
nonquantitative treatment limitations between mental health and 
substance use disorder benefits and medical/surgical benefits, as 
required under PHS Act section 2726. A fundamental purpose of PHS Act 
section 2726, this section, and Sec.  146.137 is to ensure that 
participants and beneficiaries in a group health plan (or health 
insurance coverage offered by an issuer in connection with a group 
health plan) that offers mental health or substance use disorder 
benefits are not subject to more restrictive lifetime or annual dollar 
limits, financial requirements, or treatment limitations with respect 
to those benefits than the predominant dollar limits, financial 
requirements, or treatment limitations that are applied to 
substantially all medical/surgical benefits covered by the plan or 
coverage, as further provided in this section and Sec.  146.137. 
Accordingly, in complying with the provisions of PHS Act section 2726, 
this section, and Sec.  146.137, plans and issuers must not design or 
apply financial requirements and treatment limitations that impose a 
greater burden on access (that is, are more restrictive) to mental 
health and substance use disorder benefits under the plan or coverage 
than they impose on access to generally comparable medical/surgical 
benefits. The provisions of PHS section 2726, this section, and Sec.  
146.137 should be interpreted in a manner that is consistent with the 
purpose described in this paragraph (a)(1).
    (2) Meaning of terms. For purposes of this section and Sec.  
146.137, except where the context clearly indicates otherwise, the 
following terms have the meanings indicated:
* * * * *
    DSM means the American Psychiatric Association's Diagnostic and 
Statistical Manual of Mental Disorders. For the purpose of this 
definition, the most current version of the DSM is the version that is 
applicable no earlier than on the date that is 1 year before the first 
day of the applicable plan year.
    Evidentiary standards are any evidence, sources, or standards that 
a group health plan (or health insurance issuer offering coverage in 
connection with such a plan) considered or relied upon in designing or 
applying a factor with respect to a nonquantitative treatment 
limitation, including specific benchmarks or thresholds. Evidentiary 
standards may be empirical, statistical, or clinical in nature, and 
include: sources acquired or originating from an objective third party, 
such as recognized medical literature, professional standards and 
protocols (which may include comparative effectiveness studies and 
clinical trials), published research studies, payment rates for items 
and services (such as publicly available databases of the ``usual, 
customary and reasonable'' rates paid for items and services), and 
clinical treatment guidelines; internal plan or issuer data, such as 
claims or utilization data or criteria for assuring a sufficient mix 
and number of network providers; and benchmarks or thresholds, such as 
measures of excessive utilization, cost levels, time or distance 
standards, or network participation percentage thresholds.
    Factors are all information, including processes and strategies 
(but not evidentiary standards), that a group health plan (or health 
insurance issuer offering coverage in connection with such a plan) 
considered or relied upon to design a nonquantitative treatment 
limitation, or to determine whether or how the nonquantitative 
treatment limitation applies to benefits under the plan or coverage. 
Examples of factors include, but are not limited to: provider 
discretion in determining a diagnosis or type or length of treatment; 
clinical efficacy of any proposed treatment or service; licensing and 
accreditation of providers; claim types with a high percentage of 
fraud; quality measures; treatment outcomes; severity or chronicity of 
condition; variability in the cost of an episode of treatment; high 
cost growth; variability in cost and quality; elasticity of demand; and 
geographic location.
* * * * *
    ICD means the World Health Organization's International 
Classification of Diseases adopted by the Department of Health and 
Human Services through Sec.  162.1002 of this subtitle. For the purpose 
of this definition, the most current version of the ICD is the version 
that is applicable no earlier than on the date that is 1 year before 
the first day of the applicable plan year.
    Medical/surgical benefits means benefits with respect to items or 
services for medical conditions or surgical procedures, as defined 
under the terms of the group health plan (or health insurance coverage 
offered by an issuer in connection with such a plan) and in accordance 
with applicable Federal and State law, but does not include mental 
health benefits or substance use disorder benefits. Notwithstanding the 
preceding sentence, any condition or procedure defined by the plan or 
coverage as being or as not being a medical condition or surgical 
procedure must be defined consistent with generally recognized 
independent standards of current medical practice (for example, the 
most current version of the ICD). To the extent generally recognized 
independent standards of current medical practice do not address 
whether a condition or procedure is a medical condition or surgical 
procedure, plans and issuers may define the condition or procedure in 
accordance with applicable Federal and State law.
    Mental health benefits means benefits with respect to items or 
services for mental health conditions, as defined under the terms of 
the group health plan (or health insurance coverage offered by an 
issuer in connection with such a plan) and in accordance with 
applicable Federal and State law, but does not include medical/surgical 
benefits or substance use disorder benefits. Notwithstanding the 
preceding sentence, any condition defined by the plan or coverage as 
being or as not being a mental health condition must be defined 
consistent with generally recognized independent standards of current 
medical practice. For the purpose of this definition, to be consistent 
with generally recognized independent standards of current medical 
practice, the definition must include all conditions covered under the 
plan or coverage, except for substance use disorders, that fall under 
any of the diagnostic categories listed in the mental, behavioral, and 
neurodevelopmental disorders chapter (or equivalent chapter) of the 
most current version of the ICD or that are listed in the most current 
version of the DSM. To the extent generally recognized independent 
standards of current medical practice do not address whether a 
condition is a mental health condition, plans and issuers may define 
the condition in accordance with applicable Federal and State law.
    Processes are actions, steps, or procedures that a group health 
plan (or health insurance issuer offering coverage in connection with 
such a plan) uses to apply a nonquantitative treatment limitation, 
including actions, steps, or procedures established by the

[[Page 51654]]

plan or issuer as requirements in order for a participant or 
beneficiary to access benefits, including through actions by a 
participant's or beneficiary's authorized representative or a provider 
or facility. Processes include but are not limited to: procedures to 
submit information to authorize coverage for an item or service prior 
to receiving the benefit or while treatment is ongoing (including 
requirements for peer or expert clinical review of that information); 
provider referral requirements; and the development and approval of a 
treatment plan. Processes also include the specific procedures used by 
staff or other representatives of a plan or issuer (or the service 
provider of a plan or issuer) to administer the application of 
nonquantitative treatment limitations, such as how a panel of staff 
members applies the nonquantitative treatment limitation (including the 
qualifications of staff involved, number of staff members allocated, 
and time allocated), consultations with panels of experts in applying 
the nonquantitative treatment limitation, and reviewer discretion in 
adhering to criteria hierarchy when applying a nonquantitative 
treatment limitation.
    Strategies are practices, methods, or internal metrics that a plan 
(or health insurance issuer offering coverage in connection with such a 
plan) considers, reviews, or uses to design a nonquantitative treatment 
limitation. Examples of strategies include but are not limited to: the 
development of the clinical rationale used in approving or denying 
benefits; deviation from generally accepted standards of care; the 
selection of information deemed reasonably necessary to make a medical 
necessity determination; reliance on treatment guidelines or guidelines 
provided by third-party organizations; and rationales used in selecting 
and adopting certain threshold amounts, professional protocols, and fee 
schedules. Strategies also include the creation and composition of the 
staff or other representatives of a plan or issuer (or the service 
provider of a plan or issuer) that deliberates, or otherwise makes 
decisions, on the design of nonquantitative treatment limitations, 
including the plan's decisions related to the qualifications of staff 
involved, number of staff members allocated, and time allocated; 
breadth of sources and evidence considered; consultations with panels 
of experts in designing the nonquantitative treatment limitation; and 
the composition of the panels used to design a nonquantitative 
treatment limitation.
    Substance use disorder benefits means benefits with respect to 
items or services for substance use disorders, as defined under the 
terms of the group health plan (or health insurance coverage offered by 
an issuer in connection with such a plan) and in accordance with 
applicable Federal and State law, but does not include medical/surgical 
benefits or mental health benefits. Notwithstanding the preceding 
sentence, any disorder defined by the plan or coverage as being or as 
not being a substance use disorder must be defined consistent with 
generally recognized independent standards of current medical practice. 
For the purpose of this definition, to be consistent with generally 
recognized independent standards of current medical practice, the 
definition must include all disorders covered under the plan or 
coverage that fall under any of the diagnostic categories listed as a 
mental or behavioral disorder due to psychoactive substance use (or 
equivalent category) in the mental, behavioral and neurodevelopmental 
disorders chapter (or equivalent chapter) of the most current version 
of the ICD or that are listed as a Substance-Related and Addictive 
Disorder (or equivalent category) in the most current version of the 
DSM. To the extent generally recognized independent standards of 
current medical practice do not address whether a disorder is a 
substance use disorder, plans and issuers may define the disorder in 
accordance with applicable Federal and State law.
    Treatment limitations include limits on benefits based on the 
frequency of treatment, number of visits, days of coverage, days in a 
waiting period, or other similar limits on the scope or duration of 
treatment. Treatment limitations include both quantitative treatment 
limitations, which are expressed numerically (such as 50 outpatient 
visits per year), and nonquantitative treatment limitations, which 
otherwise limit the scope or duration of benefits for treatment under a 
plan or coverage. (See paragraph (c)(4)(iii) of this section for an 
illustrative, non-exhaustive list of nonquantitative treatment 
limitations.) A complete exclusion of all benefits for a particular 
condition or disorder, however, is not a treatment limitation for 
purposes of this definition.
* * * * *
    (c) * * *
    (1) * * *
    (ii) Type of financial requirement or treatment limitation. When 
reference is made in this paragraph (c) to a type of financial 
requirement or treatment limitation, the reference to type means its 
nature. Different types of financial requirements include deductibles, 
copayments, coinsurance, and out-of-pocket maximums. Different types of 
quantitative treatment limitations include annual, episode, and 
lifetime day and visit limits. See paragraph (c)(4)(iii) of this 
section for an illustrative, non-exhaustive list of nonquantitative 
treatment limitations.
* * * * *
    (2) * * *
    (i) General rule. A group health plan (or health insurance coverage 
offered by an issuer in connection with a group health plan) that 
provides both medical/surgical benefits and mental health or substance 
use disorder benefits may not apply any financial requirement or 
treatment limitation to mental health or substance use disorder 
benefits in any classification that is more restrictive than the 
predominant financial requirement or treatment limitation of that type 
applied to substantially all medical/surgical benefits in the same 
classification. Whether a financial requirement or treatment limitation 
is a predominant financial requirement or treatment limitation that 
applies to substantially all medical/surgical benefits in a 
classification is determined separately for each type of financial 
requirement or treatment limitation. A plan or issuer may not impose 
any financial requirement or treatment limitation that is applicable 
only with respect to mental health or substance use disorder benefits 
and not to any medical/surgical benefits in the same benefit 
classification. The application of the rules of this paragraph (c)(2) 
to financial requirements and quantitative treatment limitations is 
addressed in paragraph (c)(3) of this section; the application of the 
rules of this paragraph (c)(2) to nonquantitative treatment limitations 
is addressed in paragraph (c)(4) of this section.
    (ii) * * *
    (A) In general. If a plan (or health insurance coverage) provides 
any benefits for a mental health condition or substance use disorder in 
any classification of benefits described in this paragraph (c)(2)(ii), 
benefits for that mental health condition or substance use disorder 
must be provided in every classification in which medical/surgical 
benefits are provided. For purposes of this paragraph (c)(2)(ii), a 
plan (or health insurance coverage) providing any benefits for a mental 
health condition or substance use disorder in any classification of 
benefits does not provide benefits for the mental health condition or 
substance use disorder in every classification in which medical/

[[Page 51655]]

surgical benefits are provided unless the plan (or health insurance 
coverage) provides meaningful benefits for treatment for that condition 
or disorder in each such classification, as determined in comparison to 
the benefits provided for medical/surgical conditions in the 
classification. In determining the classification in which a particular 
benefit belongs, a plan (or health insurance issuer) must apply the 
same standards to medical/surgical benefits and to mental health or 
substance use disorder benefits. To the extent that a plan (or health 
insurance coverage) provides benefits in a classification and imposes 
any separate financial requirement or treatment limitation (or separate 
level of a financial requirement or treatment limitation) for benefits 
in the classification, the rules of this paragraph (c) apply separately 
with respect to that classification for all financial requirements or 
treatment limitations (illustrated in examples in paragraph 
(c)(2)(ii)(C) of this section). The following classifications of 
benefits are the only classifications used in applying the rules of 
this paragraph (c), in addition to the permissible sub-classifications 
described in paragraph (c)(3)(iii) of this section:
* * * * *
    (C) * * *
    (1) Example 1--(i) Facts. A group health plan offers inpatient and 
outpatient benefits and does not contract with a network of providers. 
The plan imposes a $500 deductible on all benefits. For inpatient 
medical/surgical benefits, the plan imposes a coinsurance requirement. 
For outpatient medical/surgical benefits, the plan imposes copayments. 
The plan imposes no other financial requirements or treatment 
limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(1) (Example 1), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because inpatient, out-of-network medical/surgical 
benefits are subject to separate financial requirements from 
outpatient, out-of-network medical/surgical benefits, the rules of this 
paragraph (c) apply separately with respect to any financial 
requirements and treatment limitations, including the deductible, in 
each classification.
    (2) Example 2--(i) Facts. A plan imposes a $500 deductible on all 
benefits. The plan has no network of providers. The plan generally 
imposes a 20 percent coinsurance requirement with respect to all 
benefits, without distinguishing among inpatient, outpatient, emergency 
care, or prescription drug benefits. The plan imposes no other 
financial requirements or treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(2) (Example 2), 
because the plan does not impose separate financial requirements (or 
treatment limitations) based on classification, the rules of this 
paragraph (c) apply with respect to the deductible and the coinsurance 
across all benefits.
    (3) Example 3--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan 
exempts emergency care benefits from the 20 percent coinsurance 
requirement. The plan imposes no other financial requirements or 
treatment limitations.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(3) (Example 3), 
because the plan imposes separate financial requirements based on 
classifications, the rules of this paragraph (c) apply with respect to 
the deductible and the coinsurance separately for benefits in the 
emergency care classification and all other benefits.
    (4) Example 4--(i) Facts. Same facts as in paragraph 
(c)(2)(ii)(C)(2)(i) of this section (Example 2), except the plan also 
imposes a preauthorization requirement for all inpatient treatment in 
order for benefits to be paid. No such requirement applies to 
outpatient treatment.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(4) (Example 4), 
because the plan has no network of providers, all benefits provided are 
out-of-network. Because the plan imposes a separate treatment 
limitation based on classifications, the rules of this paragraph (c) 
apply with respect to the deductible and coinsurance separately for 
inpatient, out-of-network benefits and all other benefits.
    (5) Example 5--(i) Facts. A plan 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 behavioral analysis (ABA) therapy, when provided on an out-of-
network basis. The plan generally covers the full range of outpatient 
treatments and treatment settings for medical conditions and surgical 
procedures when provided on an out-of-network basis.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(5) (Example 5), 
the plan violates the rules of this paragraph (c)(2)(ii). Because the 
plan only covers one type of benefit for ASD in the outpatient, out-of-
network classification and excludes all other benefits for ASD in the 
classification, but generally covers the full range of medical/surgical 
benefits in the classification, it fails to provide meaningful benefits 
for treatment of ASD in the classification.
    (6) Example 6--(i) Facts. 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/surgical conditions in the outpatient, in-
network classification.
    (ii) Conclusion. In this paragraph (c)(2)(ii)(C)(6) (Example 6), 
the plan violates the rules of this paragraph (c)(2)(ii). 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 medical/surgical 
conditions in the classification.
    (3) * * *
    (i) * * *
    (A) Substantially all. For purposes of this paragraph (c)(3), a 
type of financial requirement or quantitative treatment limitation is 
considered to apply to substantially all medical/surgical benefits in a 
classification of benefits if it applies to at least two-thirds of all 
medical/surgical benefits in that classification. (For purposes of this 
paragraph (c)(3)(i)(A), benefits expressed as subject to a zero level 
of a type of financial requirement are treated as benefits not subject 
to that type of financial requirement, and benefits expressed as 
subject to a quantitative treatment limitation that is unlimited are 
treated as benefits not subject to that type of quantitative treatment 
limitation.) If a type of financial requirement or quantitative 
treatment limitation does not apply to at least two-thirds of all 
medical/surgical benefits in a classification, then that type cannot be 
applied to mental health or substance use disorder benefits in that 
classification.
* * * * *
    (C) Portion based on plan payments. For purposes of this paragraph 
(c)(3), the determination of the portion of medical/surgical benefits 
in a classification of benefits subject to a financial requirement or 
quantitative treatment limitation (or subject to any level of a 
financial requirement or quantitative treatment limitation) is based on 
the dollar amount of all plan

[[Page 51656]]

payments for medical/surgical benefits in the classification expected 
to be paid under the plan for the plan year (or for the portion of the 
plan year after a change in plan benefits that affects the 
applicability of the financial requirement or quantitative treatment 
limitation).
    (D) Clarifications for certain threshold requirements. For any 
deductible, the dollar amount of plan payments includes all plan 
payments with respect to claims that would be subject to the deductible 
if it had not been satisfied. For any out-of-pocket maximum, the dollar 
amount of plan payments includes all plan payments associated with out-
of-pocket payments that are taken into account towards the out-of-
pocket maximum as well as all plan payments associated with out-of-
pocket payments that would have been made towards the out-of-pocket 
maximum if it had not been satisfied. Similar rules apply for any other 
thresholds at which the rate of plan payment changes. (See also PHS Act 
section 2707 and Affordable Care Act section 1302(c), which establish 
annual limitations on out-of-pocket maximums for all non-grandfathered 
health plans.)
* * * * *
    (iii) Special rules. Unless specifically permitted under this 
paragraph (c)(3)(iii), sub-classifications are not permitted when 
applying the rules of paragraph (c)(3) of this section.
    (A) Multi-tiered prescription drug benefits. If a plan (or health 
insurance coverage) applies different levels of financial requirements 
to different tiers of prescription drug benefits based on reasonable 
factors determined in accordance with the rules in paragraph (c)(4) of 
this section (relating to requirements for nonquantitative treatment 
limitations) and without regard to whether a drug is generally 
prescribed with respect to medical/surgical benefits or with respect to 
mental health or substance use disorder benefits, the plan (or health 
insurance coverage) satisfies the parity requirements of this paragraph 
(c) with respect to prescription drug benefits. Reasonable factors 
include cost, efficacy, generic versus brand name, and mail order 
versus pharmacy pick-up.
    (B) Multiple network tiers. If a plan (or health insurance 
coverage) provides benefits through multiple tiers of in-network 
providers (such as an in-network tier of preferred providers with more 
generous cost-sharing to participants than a separate in-network tier 
of participating providers), the plan may divide its benefits furnished 
on an in-network basis into sub-classifications that reflect network 
tiers, if the tiering is based on reasonable factors determined in 
accordance with the rules in paragraph (c)(4) of this section (such as 
quality, performance, and market standards) and without regard to 
whether a provider provides services with respect to medical/surgical 
benefits or mental health or substance use disorder benefits. After the 
sub-classifications are established, the plan or issuer may not impose 
any financial requirement or treatment limitation on mental health or 
substance use disorder benefits in any sub-classification that is more 
restrictive than the predominant financial requirement or treatment 
limitation that applies to substantially all medical/surgical benefits 
in the sub-classification using the methodology set forth in paragraph 
(c)(3)(i) of this section.
* * * * *
    (iv) Examples. The rules of paragraphs (c)(3)(i) through (iii) of 
this section are illustrated by the following examples. In each 
example, the group health plan is subject to the requirements of this 
section and provides both medical/surgical benefits and mental health 
and substance use disorder benefits.
    (A) Example 1--(1) Facts. (i) For inpatient, out-of-network 
medical/surgical benefits, a group health plan imposes five levels of 
coinsurance. Using a reasonable method, the plan projects its payments 
for the upcoming year as follows:

                                                        Table 1 to Paragraph (c)(3)(iv)(A)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coinsurance rate............................              0%                10%                15%                20%                30%           Total
Projected payments..........................           $200x              $100x              $450x              $100x              $150x         $1,000x
Percent of total plan costs.................              20                 10                 45                 10                 15  ..............
Percent subject to coinsurance level........             N/A   12.5 (100x/800x)  56.25 (450x/800x)   12.5 (100x/800x)  18.75 (150x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) The plan projects plan costs of $800x to be subject to 
coinsurance ($100x + $450x + $100x + $150x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to 
coinsurance, and 56.25 percent of the benefits subject to coinsurance 
are projected to be subject to the 15 percent coinsurance level.
    (2) Conclusion. In this paragraph (c)(3)(iv)(A) (Example 1), the 
two-thirds threshold of the substantially all standard is met for 
coinsurance because 80 percent of all inpatient, out-of-network 
medical/surgical benefits are subject to coinsurance. Moreover, the 15 
percent coinsurance is the predominant level because it is applicable 
to more than one-half of inpatient, out-of-network medical/surgical 
benefits subject to the coinsurance requirement. The plan may not 
impose any level of coinsurance with respect to inpatient, out-of-
network mental health or substance use disorder benefits that is more 
restrictive than the 15 percent level of coinsurance.
    (B) Example 2--(1) Facts. (i) For outpatient, in-network medical/
surgical benefits, a plan imposes five different copayment levels. 
Using a reasonable method, the plan projects payments for the upcoming 
year as follows:

                                                        Table 2 to Paragraph (c)(3)(iv)(B)(1)(i)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copayment amount............................              $0                $10                $15                $20                $50           Total
Projected payments..........................           $200x              $200x              $200x              $300x              $100x         $1,000x
Percent of total plan costs.................              20                 20                 20                 30                 10  ..............
Percent subject to copayments...............             N/A     25 (200x/800x)     25 (200x/800x)   37.5 (300x/800x)   12.5 (100x/800x)  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 51657]]

    (ii) The plan projects plan costs of $800x to be subject to 
copayments ($200x + $200x + $300x + $100x = $800x). Thus, 80 percent 
($800x/$1,000x) of the benefits are projected to be subject to a 
copayment.
    (2) Conclusion. In this paragraph (c)(3)(iv)(B) (Example 2), the 
two-thirds threshold of the substantially all standard is met for 
copayments because 80 percent of all outpatient, in-network medical/
surgical benefits are subject to a copayment. Moreover, there is no 
single level that applies to more than one-half of medical/surgical 
benefits in the classification subject to a copayment (for the $10 
copayment, 25%; for the $15 copayment, 25%; for the $20 copayment, 
37.5%; and for the $50 copayment, 12.5%). The plan can combine any 
levels of copayment, including the highest levels, to determine the 
predominant level that can be applied to mental health or substance use 
disorder benefits. If the plan combines the highest levels of 
copayment, the combined projected payments for the two highest 
copayment levels, the $50 copayment and the $20 copayment, are not more 
than one-half of the outpatient, in-network medical/surgical benefits 
subject to a copayment because they are exactly one-half ($300x + $100x 
= $400x; $400x/$800x = 50%). The combined projected payments for the 
three highest copayment levels--the $50 copayment, the $20 copayment, 
and the $15 copayment--are more than one-half of the outpatient, in-
network medical/surgical benefits subject to the copayments ($100x + 
$300x + $200x = $600x; $600x/$800x = 75%). Thus, the plan may not 
impose any copayment on outpatient, in-network mental health or 
substance use disorder benefits that is more restrictive than the least 
restrictive copayment in the combination, the $15 copayment.
    (C) Example 3--(1) Facts. A plan imposes a $250 deductible on all 
medical/surgical benefits for self-only coverage and a $500 deductible 
on all medical/surgical benefits for family coverage. The plan has no 
network of providers. For all medical/surgical benefits, the plan 
imposes a coinsurance requirement. The plan imposes no other financial 
requirements or treatment limitations.
    (2) Conclusion. In this paragraph (c)(3)(iv)(C) (Example 3), 
because the plan has no network of providers, all benefits are provided 
out-of-network. Because self-only and family coverage are subject to 
different deductibles, whether the deductible applies to substantially 
all medical/surgical benefits is determined separately for self-only 
medical/surgical benefits and family medical/surgical benefits. Because 
the coinsurance is applied without regard to coverage units, the 
predominant coinsurance that applies to substantially all medical/
surgical benefits is determined without regard to coverage units.
    (D) Example 4--(1) Facts. A plan applies the following financial 
requirements for prescription drug benefits. The requirements are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits. Moreover, the process for 
certifying a particular drug as ``generic'', ``preferred brand name'', 
``non-preferred brand name'', or ``specialty'' complies with the rules 
of paragraph (c)(4) of this section (relating to requirements for 
nonquantitative treatment limitations).

                                      Table 3 to Paragraph (c)(3)(iv)(D)(1)
----------------------------------------------------------------------------------------------------------------
                                        Tier 1              Tier 2              Tier 3              Tier 4
----------------------------------------------------------------------------------------------------------------
Tier description................  Generic drugs.....  Preferred brand     Non-preferred       Specialty drugs.
                                                       name drugs.         brand name drugs
                                                                           (which may have
                                                                           Tier 1 or Tier 2
                                                                           alternatives).
Percent paid by plan............  90%...............  80%...............  60%...............  50%.
----------------------------------------------------------------------------------------------------------------

    (2) Conclusion. In this paragraph (c)(3)(iv)(D) (Example 4), the 
financial requirements that apply to prescription drug benefits are 
applied without regard to whether a drug is generally prescribed with 
respect to medical/surgical benefits or with respect to mental health 
or substance use disorder benefits; the process for certifying drugs in 
different tiers complies with paragraph (c)(4) of this section; and the 
bases for establishing different levels or types of financial 
requirements are reasonable. The financial requirements applied to 
prescription drug benefits do not violate the parity requirements of 
this paragraph (c)(3).
    (E) Example 5--(1) Facts. A plan has two-tiers of network of 
providers: a preferred provider tier and a participating provider tier. 
Providers are placed in either the preferred tier or participating tier 
based on reasonable factors determined in accordance with the rules in 
paragraph (c)(4) of this section, such as accreditation, quality and 
performance measures (including customer feedback), and relative 
reimbursement rates. Furthermore, provider tier placement is determined 
without regard to whether a provider specializes in the treatment of 
mental health conditions or substance use disorders, or medical/
surgical conditions. The plan divides the in-network classifications 
into two sub-classifications (in-network/preferred and in-network/
participating). The plan does not impose any financial requirement or 
treatment limitation on mental health or substance use disorder 
benefits in either of these sub-classifications that is more 
restrictive than the predominant financial requirement or treatment 
limitation that applies to substantially all medical/surgical benefits 
in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(E) (Example 5), the 
division of in-network benefits into sub-classifications that reflect 
the preferred and participating provider tiers does not violate the 
parity requirements of this paragraph (c)(3).
    (F) Example 6--(1) Facts. With respect to outpatient, in-network 
benefits, a plan imposes a $25 copayment for office visits and a 20 
percent coinsurance requirement for outpatient surgery. The plan 
divides the outpatient, in-network classification into two sub-
classifications (in-network office visits and all other outpatient, in-
network items and services). The plan or issuer does not impose any 
financial requirement or quantitative treatment limitation on mental 
health or substance use disorder benefits in either of these sub-
classifications that is more restrictive than the predominant financial 
requirement or quantitative treatment limitation that applies to 
substantially all medical/surgical benefits in each sub-classification.
    (2) Conclusion. In this paragraph (c)(3)(iv)(F) (Example 6), the 
division of outpatient, in-network benefits into sub-

[[Page 51658]]

classifications for office visits and all other outpatient, in-network 
items and services does not violate the parity requirements of this 
paragraph (c)(3).
    (G) Example 7--(1) Facts. Same facts as in paragraph 
(c)(3)(iv)(F)(1) of this section (Example 6), but for purposes of 
determining parity, the plan divides the outpatient, in-network 
classification into outpatient, in-network generalists and outpatient, 
in-network specialists.
    (2) Conclusion. In this paragraph (c)(3)(iv)(G) (Example 7), the 
division of outpatient, in-network benefits into any sub-
classifications other than office visits and all other outpatient items 
and services violates the requirements of paragraph (c)(3)(iii)(C) of 
this section.
* * * * *
    (4) Nonquantitative treatment limitations. Subject to paragraph 
(c)(4)(v) of this section, a group health plan (or health insurance 
coverage offered by an issuer in connection with a group health plan) 
may not impose a nonquantitative treatment limitation with respect to 
mental health or substance use disorder benefits in a classification 
unless the plan's or coverage's imposition of the limitation meets the 
requirements of paragraphs (c)(4)(i), (ii), and (iv) of this section. 
If a group health plan (or health insurance coverage offered by an 
issuer in connection with a group health plan) fails to meet any of 
these requirements with respect to a nonquantitative treatment 
limitation, the limitation violates section 2726(a)(3)(A)(ii) of the 
PHS Act and may not be imposed by the plan (or health insurance 
coverage).
    (i) Requirement that nonquantitative treatment limitations be no 
more restrictive for mental health benefits and substance use disorder 
benefits. A group health plan (or health insurance issuer offering 
coverage in connection with a group health plan) may not apply any 
nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in any classification that is more 
restrictive, as written or in operation, than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the same classification.
    (A) Restrictive. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is restrictive to the extent it 
imposes conditions, terms, or requirements that limit access to 
benefits under the terms of the plan or coverage. Conditions, terms, or 
requirements include, but are not limited to, those that compel an 
action by or on behalf of a participant or beneficiary to access 
benefits or limit access to the full range of treatment options 
available for a condition or disorder under the plan or coverage.
    (B) Substantially all. For purposes of this paragraph (c)(4)(i), a 
nonquantitative treatment limitation is considered to apply to 
substantially all medical/surgical benefits in a classification if it 
applies to at least two-thirds of all medical/surgical benefits in that 
classification, consistent with paragraph (c)(4)(i)(D) of this section. 
Whether the nonquantitative treatment limitation applies to at least 
two-thirds of all medical/surgical benefits is determined without 
regard to whether the nonquantitative treatment limitation was 
triggered based on a particular factor or evidentiary standard. If a 
nonquantitative treatment limitation does not apply to at least two-
thirds of all medical/surgical benefits in a classification, then that 
limitation cannot be applied to mental health or substance use disorder 
benefits in that classification.
    (C) Predominant. For purposes of this paragraph (c)(4)(i), the term 
predominant means the most common or most frequent variation of the 
nonquantitative treatment limitation within a classification, 
determined in accordance with the method outlined in paragraph 
(c)(4)(i)(D) of this section, to the extent the plan or issuer imposes 
multiple variations of a nonquantitative treatment limitation within 
the classification. For example, multiple variations of inpatient 
concurrent review include review commencing 1 day, 3 days, or 7 days 
after admission, depending on the reason for the stay.
    (D) Portion based on plan payments. For purposes of paragraphs 
(c)(4)(i)(B) and (C) of this section, the determination of the portion 
of medical/surgical benefits in a classification of benefits subject to 
a nonquantitative treatment limitation is based on the dollar amount of 
all plan payments for medical/surgical benefits in the classification 
expected to be paid under the plan or coverage for the plan year (or 
the portion of the plan year after a change in benefits that affects 
the applicability of the nonquantitative treatment limitation). Any 
reasonable method may be used to determine the dollar amount expected 
to be paid under a plan or coverage for medical/surgical benefits.
    (E) Exceptions for independent professional medical or clinical 
standards and standards to detect or prevent and prove fraud, waste, 
and abuse. Notwithstanding paragraphs (c)(4)(i)(A) through (D) of this 
section, a plan or issuer that applies a nonquantitative treatment 
limitation that impartially applies independent professional medical or 
clinical standards or applies standards to detect or prevent and prove 
fraud, waste, and abuse, as described in paragraph (c)(4)(v)(A) or (B) 
of this section, to mental health or substance use disorder benefits in 
any classification will not be considered to violate this paragraph 
(c)(4)(i) with respect to such nonquantitative treatment limitation.
    (ii) Additional requirements related to design and application of 
the nonquantitative treatment limitation--(A) In general. Consistent 
with paragraph (a)(1) of this section, a plan or issuer may not impose 
a nonquantitative treatment limitation with respect to mental health or 
substance use disorder benefits in any classification unless, under the 
terms of the plan (or health insurance coverage) as written and in 
operation, any processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation to mental health or substance use disorder benefits in the 
classification are comparable to, and are applied no more stringently 
than, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the limitation with respect to 
medical/surgical benefits in the classification.
    (B) Prohibition on discriminatory factors and evidentiary 
standards. For purposes of determining comparability and stringency 
under paragraph (c)(4)(ii)(A) of this section, a plan or issuer may not 
rely upon any factor or evidentiary standard if the information, 
evidence, sources, or standards on which the factor or evidentiary 
standard is based discriminates against mental health or substance use 
disorder benefits as compared to medical/surgical benefits. For 
purposes of this paragraph (c)(4)(ii)(B):
    (1) Impartially applied generally recognized independent 
professional medical or clinical standards described in paragraph 
(c)(4)(v)(A) of this section are not considered to discriminate against 
mental health or substance use disorder benefits.
    (2) Standards reasonably designed to detect or prevent and prove 
fraud, waste, and abuse described in paragraph (c)(4)(v)(B) of this 
section are not considered to discriminate against mental health or 
substance use disorder benefits.
    (3) Information is considered to discriminate against mental health 
or substance use disorder benefits if it is biased or not objective, in 
a manner that results in less favorable treatment of

[[Page 51659]]

mental health or substance use disorder benefits, based on all the 
relevant facts and circumstances including, but not limited to, the 
source of the information, the purpose or context of the information, 
and the content of the information.
    (iii) Illustrative, non-exhaustive list of nonquantitative 
treatment limitations. Nonquantitative treatment limitations include--
    (A) Medical management standards (such as prior authorization) 
limiting or excluding benefits based on medical necessity or medical 
appropriateness, or based on whether the treatment is experimental or 
investigative;
    (B) Formulary design for prescription drugs;
    (C) For plans with multiple network tiers (such as preferred 
providers and participating providers), network tier design;
    (D) Standards related to network composition, including but not 
limited to, standards for provider and facility admission to 
participate in a network or for continued network participation, 
including methods for determining reimbursement rates, credentialing 
standards, and procedures for ensuring the network includes an adequate 
number of each category of provider and facility to provide services 
under the plan or coverage;
    (E) Plan or issuer methods for determining out-of-network rates, 
such as allowed amounts; usual, customary, and reasonable charges; or 
application of other external benchmarks for out-of-network rates;
    (F) Refusal to pay for higher-cost therapies until it can be shown 
that a lower-cost therapy is not effective (also known as fail-first 
policies or step therapy protocols);
    (G) Exclusions based on failure to complete a course of treatment; 
and
    (H) Restrictions based on geographic location, facility type, 
provider specialty, and other criteria that limit the scope or duration 
of benefits for services provided under the plan or coverage.
    (iv) Required use of outcomes data--(A) In general. When designing 
and applying a nonquantitative treatment limitation, a plan or issuer 
must collect and evaluate relevant data in a manner reasonably designed 
to assess the impact of the nonquantitative treatment limitation on 
access to mental health and substance use disorder benefits and 
medical/surgical benefits, and consider the impact as part of the 
plan's or issuer's analysis of whether the limitation, in operation, 
complies with paragraphs (c)(4)(i) and (ii) of this section. The 
Secretary, jointly with the Secretary of the Treasury and the Secretary 
of Labor, may specify in guidance the type, form, and manner of 
collection and evaluation for the data required under this paragraph 
(c)(4)(iv)(A).
    (1) For purposes of this paragraph (c)(4)(iv)(A), relevant data 
includes, but is not limited to, the number and percentage of claims 
denials and any other data relevant to the nonquantitative treatment 
limitation required by State law or private accreditation standards.
    (2) In addition to the relevant data set forth in paragraph 
(c)(4)(iv)(A)(1) of this section, relevant data for nonquantitative 
treatment limitations related to network composition standards 
includes, but is not limited to, in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges).
    (B) Material differences. Subject to paragraph (c)(4)(iv)(C) of 
this section, to the extent the relevant data evaluated pursuant to 
paragraph (c)(4)(iv)(A) of this section show material differences in 
access to mental health and substance use disorder benefits as compared 
to medical/surgical benefits, the differences will be considered a 
strong indicator that the plan or issuer violates paragraph (c)(4)(i) 
or (ii) of this section. In such instances, the plan or issuer:
    (1) Must take reasonable action to address the material differences 
in access as necessary to ensure compliance, in operation, with 
paragraphs (c)(4)(i) and (ii) of this section; and
    (2) Must document the action that has been or is being taken by the 
plan or issuer to mitigate any material differences in access to mental 
health and substance use disorder benefits as compared to medical/
surgical benefits, as required by Sec.  146.137(c)(5)(iv).
    (C) Special rule for nonquantitative treatment limitations related 
to network composition. Notwithstanding paragraph (c)(4)(iv)(B) of this 
section, when designing and applying one or more nonquantitative 
treatment limitation(s) related to network composition standards, a 
plan or issuer fails to meet the requirements of paragraphs (c)(4)(i) 
and (ii) of this section, in operation, if the relevant data show 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits in a classification.
    (D) Exception for independent professional medical or clinical 
standards. A plan or issuer designing and applying a nonquantitative 
treatment limitation with respect to mental health or substance use 
disorder benefits in any classification that impartially applies 
independent professional medical or clinical standards, as described in 
paragraph (c)(4)(v)(A) of this section, is not required to comply with 
the requirements of this paragraph (c)(4)(iv) with respect to that 
classification.
    (v) Independent professional medical or clinical standards and 
standards to detect or prevent and prove fraud, waste, and abuse. (A) 
To qualify for the exceptions in paragraphs (c)(4)(i)(E), 
(c)(4)(ii)(B), and (c)(4)(iv)(D) of this section for independent 
professional medical or clinical standards, a nonquantitative treatment 
limitation must impartially apply generally recognized independent 
professional medical or clinical standards (consistent with generally 
accepted standards of care) to medical/surgical benefits and mental 
health or substance use disorder benefits, and may not deviate from 
those standards in any way, such as by imposing additional or different 
requirements.
    (B) To qualify for the exceptions in paragraphs (c)(4)(i)(E) and 
(c)(4)(ii)(B) of this section to detect or prevent and prove fraud, 
waste, and abuse, a nonquantitative treatment limitation must be 
reasonably designed to detect or prevent and prove fraud, waste, and 
abuse, based on indicia of fraud, waste, and abuse that have been 
reliably established through objective and unbiased data, and also be 
narrowly designed to minimize the negative impact on access to 
appropriate mental health and substance use disorder benefits.
    (vi) Prohibition on separate nonquantitative treatment limitations 
applicable only to mental health or substance use disorder benefits. 
Consistent with paragraph (c)(2)(i) of this section, a group health 
plan (or health insurance coverage offered by an issuer in connection 
with such a plan) may not apply any nonquantitative treatment 
limitation that is applicable only with respect to mental health or 
substance use disorder benefits and does not apply with respect to any 
medical/surgical benefits in the same benefit classification.
    (vii) Effect of final determination of noncompliance under Sec.  
146.137. If a group health plan (or health insurance issuer offering 
group health insurance coverage in connection with such a plan) 
receives a final determination

[[Page 51660]]

from the Secretary that the plan or issuer is not in compliance with 
the requirements of Sec.  146.137 with respect to a nonquantitative 
treatment limitation, the nonquantitative treatment limitation violates 
this paragraph (c)(4) and the Secretary may direct the plan or issuer 
not to impose the nonquantitative treatment limitation, unless and 
until the plan or issuer demonstrates to the Secretary compliance with 
the requirements of this section or takes appropriate action to remedy 
the violation.
    (viii) Examples. The rules of this paragraph (c)(4) are illustrated 
by the following examples. In each example, the group health plan is 
subject to the requirements of this section and provides both medical/
surgical benefits and mental health and substance use disorder 
benefits. Additionally, in examples that conclude that the plan or 
issuer violates one provision of this paragraph (c)(4), such examples 
do not necessarily imply compliance with other provisions of this 
paragraph (c)(4), as these examples do not analyze compliance with all 
other provisions of this paragraph (c)(4).
    (A) Example 1 (More restrictive prior authorization requirement in 
operation)--(1) Facts. A plan requires prior authorization from the 
plan's utilization reviewer that a treatment is medically necessary for 
all inpatient, in-network medical/surgical benefits and for all 
inpatient, in-network mental health and substance use disorder 
benefits. While inpatient, in-network benefits for medical/surgical 
conditions are approved for periods of 1, 3, and 7 days, after which a 
treatment plan must be submitted by the patient's attending provider 
and approved by the plan, the approvals for 7 days are most common 
under this plan. For inpatient, in-network mental health and substance 
use disorder benefits, routine approval is most commonly given only for 
one day, after which a treatment plan must be submitted by the 
patient's attending provider and approved by the plan. The difference 
in the duration of approvals is not the result of independent 
professional medical or clinical standards or standards to detect or 
prevent and prove fraud, waste, and abuse, but rather reflects the 
application of a heightened standard to the provision of the mental 
health and substance use disorder benefits in the relevant 
classification.
    (2) Conclusion. In this paragraph (c)(4)(viii)(A) (Example 1), the 
plan violates the rules of paragraph (c)(4)(i) of this section. Under 
the terms of the plan, prior authorization applies to at least two-
thirds of all medical/surgical benefits in the relevant classification 
(inpatient, in-network), since it applies to all benefits in the 
relevant classification. Further, the most common or frequent variation 
of the nonquantitative treatment limitation applied to medical/surgical 
benefits in the relevant classification (the predominant 
nonquantitative treatment limitation) is the routine approval of 
inpatient, in-network benefits for 7 days before the patient's 
attending provider must submit a treatment plan. However, the plan 
routinely approves inpatient, in-network benefits for mental health and 
substance use disorder conditions for only 1 day before the patient's 
attending provider must submit a treatment plan (and, in doing so, does 
not impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section). In operation, therefore, the prior 
authorization requirement imposed on inpatient, in-network mental 
health and substance use disorder benefits is more restrictive than the 
predominant prior authorization requirement applicable to substantially 
all medical/surgical benefits in the inpatient, in-network 
classification because the practice of approving only 1 day of 
inpatient benefits limits access to the full range of treatment options 
available for a condition or disorder under the plan or coverage as 
compared to the routine 7-day approval that is given for inpatient, in-
network medical/surgical benefits. Because the plan violates the rules 
of paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (B) Example 2 (More restrictive peer-to-peer concurrent review 
requirements in operation)--(1) Facts. A plan follows a written process 
for the concurrent review of all medical/surgical benefits and mental 
health and substance use disorder benefits within the inpatient, in-
network classification. Under the process, a first-level review is 
conducted in every instance in which concurrent review applies and an 
authorization request is approved by the first-level reviewer only if 
the clinical information submitted by the facility meets the plan's 
criteria for a continued stay. If the first-level reviewer is unable to 
approve the authorization request because the clinical information 
submitted by the facility does not meet the plan's criteria for a 
continued stay, it is sent to a second-level reviewer who will either 
approve or deny the request. While the written process only requires 
review by the second-level reviewer to either deny or approve the 
request, in operation, second-level reviewers for mental health and 
substance use disorder benefits conduct a peer-to-peer review with a 
provider (acting as the authorized representative of a participant or 
beneficiary) before coverage of the treatment is approved. The peer-to-
peer review requirement is not the result of independent professional 
medical or clinical standards or standards to detect or prevent and 
prove fraud, waste, and abuse. The plan does not impose a peer-to-peer 
review, as written or in operation, as part of the second-level review 
for medical/surgical benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(B) (Example 2), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
concurrent review nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits within the inpatient, 
in-network classification because the plan follows the concurrent 
review process for all medical/surgical benefits. The most common or 
frequent variation of this nonquantitative treatment limitation (the 
predominant nonquantitative treatment limitation) applicable to 
substantially all medical/surgical benefits is that peer-to-peer review 
is not imposed as part of second-level review. The plan does not 
impartially apply independent professional medical or clinical 
standards or apply standards to detect or prevent and prove fraud, 
waste, and abuse that qualify for the exceptions in paragraph 
(c)(4)(i)(E) of this section. As written, the plan's concurrent review 
requirements are the same for medical/surgical benefits and mental 
health and substance use disorder benefits. However, in operation, by 
compelling an additional action (peer-to-peer review as part of second-
level review) to access only mental health or substance use disorder 
benefits, the plan applies the limitation to mental health and 
substance use disorder benefits in a manner that is more restrictive 
than the predominant nonquantitative treatment limitation applied to 
substantially all medical/surgical benefits in the inpatient, in-
network classification. Because the plan violates the rules of 
paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (C) Example 3 (More restrictive peer-to-peer review medical 
necessity standard in operation; deviation from independent 
professional medical and clinical standards)--(1) Facts. A plan

[[Page 51661]]

generally requires that all treatment be medically necessary in the 
inpatient, out-of-network classification. For both medical/surgical 
benefits and mental health and substance use disorder benefits, the 
written medical necessity standards are based on independent 
professional medical or clinical standards that do not require peer-to-
peer review. In operation, the plan covers out-of-network benefits for 
medical/surgical or mental health inpatient treatment outside of a 
hospital if the physician documents medical appropriateness, but for 
out-of-network benefits for substance use disorder inpatient treatment 
outside of a hospital, the plan requires a physician to also complete 
peer-to-peer review.
    (2) Conclusion. In this paragraph (c)(4)(viii)(C) (Example 3), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
medical necessity nonquantitative treatment limitation applies to at 
least two-thirds of all medical/surgical benefits in the inpatient, 
out-of-network classification. The most common or frequent variation of 
the nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) applicable to substantially all 
medical/surgical benefits is the requirement that a physician document 
medical appropriateness without peer-to-peer review. The plan purports 
to impartially apply independent professional medical or clinical 
standards that would otherwise qualify for the exception in paragraph 
(c)(4)(i)(E) of this section, but deviates from those standards by 
imposing the additional requirement to complete peer-to-peer review for 
inpatient, out-of-network benefits for substance use disorder outside 
of a hospital. Therefore, the exception in paragraph (c)(4)(i)(E) of 
this section does not apply. As written, the plan provisions apply the 
nonquantitative treatment limitation to mental health and substance use 
disorder benefits in the inpatient, out-of-network classification in 
the same manner as for medical/surgical benefits. However, in 
operation, the nonquantitative treatment limitation imposed with 
respect to out-of-network substance use disorder benefits for treatment 
outside of a hospital is more restrictive than the predominant 
nonquantitative treatment limitation applied to substantially all 
medical/surgical benefits in the classification because it limits 
access to the full range of treatment options available for a condition 
or disorder under the plan or coverage as compared to medical/surgical 
benefits in the same classification. Because the plan violates the 
rules of paragraph (c)(4)(i) of this section, this example does not 
analyze compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (D) Example 4 (Not comparable and more stringent methods for 
determining reimbursement rates in operation)--(1) Facts. A plan's base 
reimbursement rates for outpatient, in-network providers are determined 
based on a variety of factors, including the providers' required 
training, licensure, and expertise. For purposes of this example, the 
plan's nonquantitative treatment limitations for determining 
reimbursement rates for mental health and substance use disorder 
benefits are not more restrictive than the predominant nonquantitative 
treatment limitation applied to substantially all medical/surgical 
benefits in the classification under paragraph (c)(4)(i) of this 
section. As written, for mental health, substance use disorder, and 
medical/surgical benefits, all reimbursement rates for physicians and 
non-physician practitioners for the same Current Procedural Terminology 
(CPT) code vary based on a combination of factors, such as the nature 
of the service, provider type, number of providers qualified to provide 
the service in a given geographic area, and market need (demand). As a 
result, reimbursement rates for mental health, substance use disorder, 
and medical/surgical benefits furnished by non-physician providers are 
generally less than for physician providers. In operation, the plan 
reduces the reimbursement rate for mental health and substance use 
disorder non-physician providers from that paid to mental health and 
substance use disorder physicians by the same percentage for every CPT 
code but does not apply the same reductions for non-physician medical/
surgical providers.
    (2) Conclusion. In this paragraph (c)(4)(viii)(D) (Example 4), the 
plan violates the rules of paragraph (c)(4)(ii) of this section. 
Because the plan reimburses non-physician providers of mental health 
and substance use disorder services by reducing their reimbursement 
rate from the rate to physician providers by the same percentage for 
every CPT code but does not apply the same reductions to non-physician 
providers of medical/surgical services, in operation, the factors used 
in applying the nonquantitative treatment limitation to mental health 
and substance use disorder benefits are not comparable to, and are 
applied more stringently than, the factors used in applying the 
limitation with respect to medical/surgical benefits. Because the facts 
assume that the plan's methods for determining reimbursement rates 
comply with paragraph (c)(4)(i) of this section and the plan violates 
the rules of paragraph (c)(4)(ii) of this section, this example does 
not analyze compliance with paragraph (c)(4)(iv) of this section.
    (E) Example 5 (Exception for impartially applied generally 
recognized independent professional medical or clinical standards)--(1) 
Facts. A group health plan develops a medical management requirement 
for all inpatient, out-of-network benefits for both medical/surgical 
benefits and mental health and substance use disorder benefits to 
ensure treatment is medically necessary. The medical management 
requirement impartially applies independent professional medical or 
clinical standards in a manner that qualifies for the exception in 
paragraph (c)(4)(i)(E) of this section. The plan does not rely on any 
other factors or evidentiary standards and the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the medical management requirement to mental health and substance use 
disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the requirement with 
respect to medical/surgical benefits. Within the inpatient, out-of-
network classification, the application of the medical management 
requirement results in a higher percentage of denials for mental health 
and substance use disorder claims than medical/surgical claims, because 
the benefits were found to be medically necessary for a lower 
percentage of mental health and substance use disorder claims based on 
the impartial application of the independent professional medical or 
clinical standards by the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(E) (Example 5), the 
plan does not violate the rules of this paragraph (c)(4). The medical 
management nonquantitative treatment limitation imposed on mental 
health and substance use disorder benefits does not violate paragraph 
(c)(4)(i) or (iv) of this section because it impartially applies 
independent professional medical or clinical standards for both 
medical/surgical benefits and mental health and substance use disorder 
benefits in a manner that qualifies for the exceptions in paragraphs 
(c)(4)(i)(E) and (c)(4)(iv)(D) of this section, respectively. Moreover, 
the nonquantitative treatment limitation does not violate paragraph 
(c)(4)(ii) of this section because the independent professional medical 
or

[[Page 51662]]

clinical standards are not considered to be a discriminatory factor or 
evidentiary standard under paragraph (c)(4)(ii)(B) of this section. 
Additionally, as written and in operation, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits in the inpatient, out-of-network classification 
are comparable to, and are applied no more stringently than, the 
processes, strategies, evidentiary standards, and other factors used in 
applying the limitation with respect to medical/surgical benefits in 
the classification, regardless of the fact that the application of the 
nonquantitative treatment limitation resulted in higher percentages of 
claim denials for mental health and substance use disorder benefits as 
compared to medical/surgical benefits.
    (F) Example 6 (More restrictive prior authorization requirement; 
exception for impartially applied generally recognized independent 
professional medical or clinical standards not met)--(1) Facts. The 
provisions of a plan state that it applies independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care) for setting prior authorization requirements for 
both medical/surgical and mental health and substance use disorder 
prescription drugs. The relevant generally recognized independent 
professional medical standard for treatment of opioid use disorder that 
the plan utilizes--in this case, the American Society of Addiction 
Medicine national practice guidelines--does not support prior 
authorization every 30 days for buprenorphine/naloxone. However, in 
operation, the plan requires prior authorization for buprenorphine/
naloxone combination at each refill (every 30 days) for treatment of 
opioid use disorder.
    (2) Conclusion. In this paragraph (c)(4)(viii)(F) (Example 6), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
plan does not qualify for the exception in paragraph (c)(4)(i)(E) of 
this section, because, although the provisions of the plan state that 
it applies independent professional medical and clinical standards, the 
plan deviates from the relevant standards with respect to prescription 
drugs to treat opioid use disorder. The prior authorization 
nonquantitative treatment limitation is applied to at least two-thirds 
of all medical/surgical benefits in the prescription drugs 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation (the predominant nonquantitative 
treatment limitation) applicable to substantially all medical/surgical 
benefits is following generally recognized independent professional 
medical and clinical standards (consistent with generally accepted 
standards of care). The prior authorization requirements imposed on 
substance use disorder benefits are more restrictive than the 
predominant nonquantitative treatment limitation applicable to 
substantially all medical/surgical benefits in the classification, 
because the plan imposes additional requirements on substance use 
disorder benefits that limit access to the full range of treatment 
options available for a condition or disorder under the plan or 
coverage as compared to medical/surgical benefits in the same 
classification. Because the plan violates the rules of paragraph 
(c)(4)(i) of this section, this example does not analyze compliance 
with paragraph (c)(4)(ii) or (iv) of this section.
    (G) Example 7 (Impermissible nonquantitative treatment limitation 
imposed following a final determination of noncompliance and direction 
by the Secretary)--(1) Facts. Following an initial request by the 
Secretary for a plan's comparative analysis of a nonquantitative 
treatment limitation pursuant to Sec.  146.137(d), the plan submits a 
comparative analysis for the nonquantitative treatment limitation. 
After review of the comparative analysis, the Secretary makes an 
initial determination that the comparative analysis fails to 
demonstrate that the processes, strategies, evidentiary standards, and 
other factors used in designing and applying the nonquantitative 
treatment limitation to mental health or substance use disorder 
benefits in the relevant classification are comparable to, and applied 
no more stringently than, those used in designing and applying the 
limitation to medical/surgical benefits in the classification. Pursuant 
to Sec.  146.137(d)(3), the plan submits a corrective action plan and 
additional comparative analyses within 45 calendar days after the 
initial determination, and the Secretary then determines that the 
additional comparative analyses do not demonstrate compliance with the 
requirements of this paragraph (c)(4). The plan receives a final 
determination of noncompliance from the Secretary, which informs the 
plan that it is not in compliance with this paragraph (c)(4) and 
directs the plan not to impose the nonquantitative treatment limitation 
by a certain date, unless and until the plan demonstrates compliance to 
the Secretary or takes appropriate action to remedy the violation. The 
plan makes no changes to its plan terms by that date and continues to 
impose the nonquantitative treatment limitation.
    (2) Conclusion. In this paragraph (c)(4)(viii)(G) (Example 7), the 
plan violates the requirements of this paragraph (c)(4) by imposing the 
nonquantitative treatment limitation after the Secretary directs the 
plan not to impose it, pursuant to paragraph (c)(4)(vii) of this 
section.
    (H) Example 8 (Provider network admission standards not more 
restrictive and compliant with requirements for design and application 
of NQTLs)--(1) Facts. As part of a plan's standards for provider 
admission to its network, in the outpatient, in-network classification, 
any provider seeking to contract with the plan must have a certain 
number of years of supervised clinical experience. As a result of that 
standard, master's level mental health therapists are required to 
obtain supervised clinical experience beyond their licensure, while 
master's level medical/surgical providers, psychiatrists, and Ph.D.-
level psychologists do not require additional experience beyond their 
licensure because their licensure already requires supervised clinical 
experience. The plan collects and evaluates relevant data in a manner 
reasonably designed to assess the impact of the nonquantitative 
treatment limitation. This includes in-network and out-of-network 
utilization rates (including data related to provider claim 
submissions), network adequacy metrics (including time and distance 
data, and data on providers accepting new patients), and provider 
reimbursement rates (including as compared to billed charges). This 
data demonstrates that participants and beneficiaries seeking 
outpatient care are able to access outpatient, in-network mental health 
and substance use disorder providers at the same frequency as 
outpatient, in-network medical/surgical providers, that mental health 
and substance use disorder providers are active in the network and are 
accepting new patients to the same extent as medical/surgical 
providers, and that mental health and substance use disorder providers 
are within similar time and distances to plan participants and 
beneficiaries as are medical/surgical providers. This data also does 
not identify material differences in what the plan or issuer pays 
psychiatrists or non-physician mental health providers, compared to 
physicians or non-physician medical/surgical providers, respectively, 
both for the same reimbursement codes and as compared to Medicare 
rates.

[[Page 51663]]

    (2) Conclusion. In this paragraph (c)(4)(viii)(H) (Example 8), the 
plan does not violate this paragraph (c)(4). The standards for this 
nonquantitative treatment limitation, namely provider admission to the 
plan's network, are applied to at least two-thirds of all medical/
surgical benefits in the outpatient, in-network classification, as it 
applies to all medical/surgical benefits in the classification. The 
most common or frequent variation of this nonquantitative treatment 
limitation (the predominant nonquantitative treatment limitation) that 
applies to substantially all medical/surgical benefits in the 
classification is having a certain number of years of supervised 
clinical experience. The standards for provider admission to the plan's 
network that are imposed with respect to mental health or substance use 
disorder benefits are no more restrictive, as written or in operation, 
than the predominant variation of the nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
the classification, because the standards do not limit access to the 
full range of treatment options available for a condition or disorder 
under the plan or coverage as compared to medical/surgical benefits in 
the same classification. The requirement that providers have a certain 
number of years of supervised clinical experience that the plan relied 
upon to design and apply the nonquantitative treatment limitation is 
not considered to discriminate against mental health or substance use 
disorder benefits, even though this results in the requirement that 
master's level mental health therapists obtain supervised clinical 
experience beyond their licensure, unlike master's level medical/
surgical providers. In addition, as written and in operation, the 
processes, strategies, evidentiary standards, or other factors used in 
applying the nonquantitative treatment limitation to mental health or 
substance use disorder benefits 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 benefits in the 
classification, because the plan applies the same standard to all 
providers in the classification. Finally, the plan or issuer collects 
and evaluates relevant data in a manner reasonably designed to assess 
the impact of the nonquantitative treatment limitation on access to 
mental health and substance use disorder benefits, which does not show 
material differences in access to in-network mental health and 
substance use disorder benefits as compared to in-network medical/
surgical benefits in the classification.
    (I) Example 9 (More restrictive requirement for primary caregiver 
participation applied to ABA therapy)--(1) Facts. A plan generally 
applies medical necessity criteria in adjudicating claims for coverage 
of all outpatient, in-network medical/surgical and mental health and 
substance use disorder benefits, including ABA therapy for the 
treatment of ASD, which is a mental health condition. The plan's 
medical necessity criteria for coverage of ABA therapy requires 
evidence that the participant's or beneficiary's primary caregivers 
actively participate in ABA therapy, as documented by consistent 
attendance in parent, caregiver, or guardian training sessions. In 
adding this requirement, the plan deviates from independent 
professional medical or clinical standards, and there are no similar 
medical necessity criteria requiring evidence of primary caregiver 
participation in order to receive coverage of any medical/surgical 
benefits.
    (2) Conclusion. In this paragraph (c)(4)(viii)(I) (Example 9), the 
plan violates paragraph (c)(4)(i) of this section. The plan applies 
medical necessity criteria to at least two-thirds of all outpatient, 
in-network medical/surgical benefits, as they apply to all medical/
surgical benefits in the classification. The most common or frequent 
variation of this nonquantitative treatment limitation (the predominant 
nonquantitative treatment limitation) that applies to substantially all 
medical/surgical benefits in the classification does not include the 
requirement to provide evidence that the participant's or beneficiary's 
primary caregivers actively participate in the treatment. The plan does 
not qualify for the exception in paragraph (c)(4)(i)(E) of this section 
in applying its restriction on coverage for ABA therapy because the 
plan deviates from the independent professional medical or clinical 
standards by imposing a different requirement. As a result, the 
nonquantitative treatment limitation imposed on mental health and 
substance use disorder benefits is more restrictive than the 
predominant medical necessity requirement imposed on substantially all 
medical/surgical benefits in the classification (which does not include 
the requirement to provide evidence that primary caregivers actively 
participate in treatment). Because the plan violates the rules of 
paragraph (c)(4)(i) of this section, this example does not analyze 
compliance with paragraph (c)(4)(ii) or (iv) of this section.
    (J) Example 10 (More restrictive exclusion for experimental or 
investigative treatment applied to ABA therapy)--(1) Facts. A plan, as 
written, generally excludes coverage for all treatments that are 
experimental or investigative for both medical/surgical benefits and 
mental health and substance use disorder benefits in the outpatient, 
in-network classification. As a result, the plan generally excludes 
experimental treatment of medical conditions and surgical procedures, 
mental health conditions, and substance use disorders when no 
professionally recognized treatment guidelines define clinically 
appropriate standards of care for the condition or disorder and fewer 
than two randomized controlled trials are available to support the 
treatment's use with respect to the given condition or disorder. The 
plan provides benefits for the treatment of ASD, which is a mental 
health condition, but, in operation, the plan excludes coverage for ABA 
therapy to treat children with ASD, deeming it experimental. More than 
one professionally recognized treatment guideline defines clinically 
appropriate standards of care for ASD and more than two randomized 
controlled trials are available to support the use of ABA therapy to 
treat certain children with ASD.
    (2) Conclusion. In this paragraph (c)(4)(viii)(J) (Example 10), the 
plan violates the rules of paragraph (c)(4)(i) of this section. The 
coverage exclusion for experimental or investigative treatment applies 
to at least two-thirds of all medical/surgical benefits, as it applies 
to all medical/surgical benefits in the outpatient, in-network 
classification. The most common or frequent variation of this 
nonquantitative treatment limitation in the classification (the 
predominant nonquantitative treatment limitation) applicable to 
substantially all medical/surgical benefits is the exclusion under the 
plan for coverage of experimental treatment of medical/surgical 
conditions when no professionally recognized treatment guidelines 
define clinically appropriate standards of care for the condition or 
disorder and fewer than two randomized controlled trials are available 
to support the treatment's use with respect to the given condition or 
procedure. In operation, the exclusion for experimental or 
investigative treatment imposed on ABA therapy is more restrictive than 
the predominant variation of the nonquantitative treatment limitation 
for experimental or investigative treatment imposed on

[[Page 51664]]

substantially all medical/surgical benefits in the classification 
because the exclusion limits access to the full range of treatment 
options available for a condition or disorder under the plan or 
coverage as compared to medical/surgical benefits in the same 
classification. Because the plan violates the rules of paragraph 
(c)(4)(i) of this section, this example does not analyze compliance 
with paragraph (c)(4)(ii) or (iv) of this section.
    (K) Example 11 (Separate EAP exhaustion treatment limitation 
applicable only to mental health benefits)--(1) Facts. An employer 
maintains both a major medical plan and an employee assistance program 
(EAP). The EAP provides, among other benefits, a limited number of 
mental health or substance use disorder counseling sessions, which, 
together with other benefits provided by the EAP, are not significant 
benefits in the nature of medical care. Participants are eligible for 
mental health or substance use disorder benefits under the major 
medical plan only after exhausting the counseling sessions provided by 
the EAP. No similar exhaustion requirement applies with respect to 
medical/surgical benefits provided under the major medical plan.
    (2) Conclusion. In this paragraph (c)(4)(viii)(K) (Example 11), 
limiting eligibility for mental health and substance use disorder 
benefits under the major medical plan until EAP benefits are exhausted 
is a nonquantitative treatment limitation subject to the parity 
requirements of this paragraph (c). Because the limitation does not 
apply to medical/surgical benefits, it is a separate nonquantitative 
treatment limitation applicable only to mental health and substance use 
disorder benefits that violates paragraph (c)(4)(vi) of this section. 
Additionally, this EAP would not qualify as excepted benefits under 
Sec.  146.145(b)(3)(vi)(B)(1) because participants in the major medical 
plan are required to use and exhaust benefits under the EAP (making the 
EAP a gatekeeper) before an individual is eligible for benefits under 
the plan.
    (L) Example 12 (Separate residential exclusion treatment limitation 
applicable only to mental health benefits)--(1) Facts. A plan generally 
covers inpatient, in-network and inpatient out-of-network treatment in 
any setting, including skilled nursing facilities and rehabilitation 
hospitals, provided other medical necessity standards are satisfied. 
The plan also has an exclusion for residential treatment, which the 
plan defines as an inpatient benefit, for mental health and substance 
use disorder benefits. This exclusion was not generated through any 
broader nonquantitative treatment limitation (such as medical necessity 
or other clinical guideline).
    (2) Conclusion. In this paragraph (c)(4)(viii)(L) (Example 12), the 
plan violates the rules of paragraph (c)(4)(vi) of this section. 
Because the plan does not apply a comparable exclusion to inpatient 
benefits for medical/surgical conditions, the exclusion of residential 
treatment is a separate nonquantitative treatment limitation applicable 
only to mental health and substance use disorder benefits in the 
inpatient, in-network and inpatient, out-of-network classifications 
that does not apply with respect to any medical/surgical benefits in 
the same benefit classification.
    (M) Example 13 (Standards for provider admission to a network)--(1) 
Facts. A plan applies nonquantitative treatment limitations related to 
network composition in the outpatient in-network and inpatient, in-
network classifications. The plan's networks are constructed by 
separate service providers for medical/surgical benefits and mental 
health and substance use disorder benefits. For purposes of this 
example, these facts assume that these nonquantitative treatment 
limitations related to network composition for mental health and 
substance use disorder benefits are not more restrictive than the 
predominant nonquantitative treatment limitations applied to 
substantially all medical/surgical benefits in the classifications 
under paragraph (c)(4)(i) of this section. The facts also assume that, 
as written and in operation, the processes, strategies, evidentiary 
standards, and other factors used in designing and applying the 
nonquantitative treatment limitations related to network access to 
mental health or substance use disorder benefits in the outpatient in-
network and inpatient in-network classifications are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, and other factors used in designing and applying 
the nonquantitative treatment limitations with respect to medical/
surgical benefits in the classifications, as required under paragraph 
(c)(4)(ii) of this section. The plan collects and evaluates all 
relevant data in a manner reasonably designed to assess the impact of 
the nonquantitative treatment limitations related to network 
composition on access to mental health and substance use disorder 
benefits as compared with access to medical/surgical benefits and 
considers the impact as part of the plan's or issuer's analysis of 
whether the standards, in operation, comply with paragraphs (c)(4)(i) 
and (ii) of this section. The plan determined that the data did not 
reveal any material differences in access. That data included metrics 
relating to the time and distance from plan participants and 
beneficiaries to network providers in rural and urban regions; the 
number of network providers accepting new patients; the proportions of 
mental health and substance use disorder and medical/surgical providers 
and facilities that provide services in rural and urban regions who are 
in the plan's network; provider reimbursement rates; in-network and 
out-of-network utilization rates (including data related to the dollar 
value and number of provider claims submissions); and survey data from 
participants on the extent to which they forgo or pay out-of-pocket for 
treatment because of challenges finding in-network providers. The 
efforts the plan made when designing and applying its nonquantitative 
treatment limitations related to network composition, which ultimately 
led to its outcomes data not revealing any material differences in 
access to benefits for mental health or substance use disorders as 
compared with medical/surgical benefits, included making sure that the 
plan's service providers are making special efforts to enroll available 
providers, including by authorizing greater compensation or other 
inducements to the extent necessary, and expanding telehealth 
arrangements as appropriate to manage regional shortages. The plan also 
notifies participants in clear and prominent language on its website, 
employee brochures, and the summary plan description of a toll-free 
number available to help participants find in-network providers. In 
addition, when plan participants submit bills for out-of-network items 
and services, the plan directs their service providers to reach out to 
the treating providers and facilities to see if they will enroll in the 
network.
    (2) Conclusion. In this paragraph (c)(4)(viii)(M) (Example 13), the 
plan does not violate this paragraph (c)(4). As stated in the Facts 
section, the plan's nonquantitative treatment limitations related to 
network composition comply with the rules of paragraphs (c)(4)(i) and 
(ii) of this section. The plan collects and evaluates relevant data, as 
required under paragraph (c)(4)(iv)(A) of this section, and the data 
does not reveal any material differences in access to mental health and 
substance use disorder benefits as compared to medical/surgical 
benefits, as a result of the

[[Page 51665]]

actions the plan took (as set forth in the facts) when initially 
designing its nonquantitative treatment limitations related to network 
composition. Because the plan takes comparable actions to ensure that 
their mental health and substance use disorder provider network is as 
accessible as their medical/surgical provider network and exercises 
careful oversight over both their service providers and the comparative 
robustness of the networks with an eye to ensuring that network 
composition results in access to in-network benefits for mental health 
and substance use disorder services that is as generous as for medical/
surgical services, plan participants and beneficiaries can access 
covered mental health and substance use disorder services and benefits 
as readily as medical/surgical benefits. This is reflected in the 
plan's carefully designed metrics and assessment of network 
composition.
* * * * *
    (d) * * *
    (3) Provisions of other law. Compliance with the disclosure 
requirements in paragraphs (d)(1) and (2) of this section is not 
determinative of compliance with any other provision of applicable 
Federal or State law. In particular, in addition to those disclosure 
requirements, provisions of other applicable law require disclosure of 
information relevant to medical/surgical, mental health, and substance 
use disorder benefits. For example, Sec.  147.136 of this subchapter 
sets forth rules regarding claims and appeals, including the right of 
claimants (or their authorized representative) upon appeal of an 
adverse benefit determination (or a final internal adverse benefit 
determination) to be provided upon request and free of charge, 
reasonable access to and copies of all documents, records, and other 
information relevant to the claimant's claim for benefits. This 
includes documents with information on medical necessity criteria for 
both medical/surgical benefits and mental health and substance use 
disorder benefits, as well as the processes, strategies, evidentiary 
standards, and other factors used to apply a nonquantitative treatment 
limitation with respect to medical/surgical benefits and mental health 
or substance use disorder benefits under the plan and the comparative 
analyses and other applicable information required by Sec.  146.137.
    (e) * * *
    (4) Coordination with EHB requirements. Nothing in paragraph (f) or 
(g) of this section or Sec.  146.137(g) changes the requirements of 
Sec. Sec.  147.150 and 156.115 of this subchapter, providing that a 
health insurance issuer offering non-grandfathered health insurance 
coverage in the individual or small group market providing mental 
health and substance use disorder services, including behavioral health 
treatment services, as part of essential health benefits required under 
Sec. Sec.  156.110(a)(5) and 156.115(a) of this subchapter, must comply 
with the requirements under section 2726 of the PHS Act and its 
implementing regulations in this subchapter to satisfy the requirement 
to provide coverage for mental health and substance use disorder 
services, including behavioral health treatment, as part of essential 
health benefits.
* * * * *
    (i) * * *
    (1) In general. Except as provided in paragraph (i)(2) of this 
section, this section applies to group health plans and health 
insurance issuers offering group health insurance coverage on the first 
day of the first plan year beginning on or after January 1, 2025. Until 
the applicability date in the preceding sentence, plans and issuers are 
required to continue to comply with 45 CFR 146.136, revised as of 
October 1, 2021.
* * * * *
    (j) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.
0
9. Add Sec.  146.137 to read as follows:


Sec.  146.137  Nonquantitative treatment limitation comparative 
analysis requirements.

    (a) Meaning of terms. Unless otherwise stated in this section, the 
terms of this section have the meanings indicated in Sec.  
146.136(a)(2).
    (b) In general. In the case of a group health plan (or health 
insurance issuer offering group health insurance coverage in connection 
with a group health plan) that provides both medical/surgical benefits 
and mental health or substance use disorder benefits and that imposes 
any nonquantitative treatment limitation on mental health or substance 
use disorder benefits, the plan or issuer must perform and document a 
comparative analysis of the design and application of each 
nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits. Each comparative analysis must comply 
with the content requirements of paragraph (c) of this section and be 
made available to the Secretary, upon request, in the manner required 
by paragraphs (d) and (e) of this section.
    (c) Comparative analysis content requirements. With respect to each 
nonquantitative treatment limitation applicable to mental health or 
substance use disorder benefits under a group health plan (or health 
insurance coverage offered in connection with a group health plan), the 
comparative analysis performed by the plan or issuer must include, at 
minimum, the elements specified in this paragraph (c). In addition to 
the comparative analysis for each nonquantitative treatment limitation, 
each plan or issuer must prepare and make available to the Secretary, 
upon request, a written list of all nonquantitative treatment 
limitations imposed under the plan or coverage and a general 
description of any information considered or relied upon by the plan or 
issuer in preparing the comparative analysis for each nonquantitative 
treatment limitation.
    (1) Description of the nonquantitative treatment limitation. The 
comparative analysis must include, with respect to the nonquantitative 
treatment limitation that is the subject of the comparative analysis:
    (i) Identification of the nonquantitative treatment limitation, 
including the specific terms of the plan or coverage or other relevant 
terms regarding the nonquantitative treatment limitation, the policies 
or guidelines (internal or external) in which the nonquantitative 
treatment limitation appears or is described, and the applicable 
sections of any other relevant documents, such as provider contracts, 
that describe the nonquantitative treatment limitation;
    (ii) Identification of all mental health or substance use disorder 
benefits and medical/surgical benefits to which the nonquantitative 
treatment limitation applies, including a list of which benefits are 
considered mental health or substance use disorder benefits and which 
benefits are considered medical/surgical benefits;
    (iii) A description of which benefits are included in each 
classification set forth in Sec.  146.136(c)(2)(ii)(A); and
    (iv) Identification of the predominant nonquantitative treatment 
limitation applicable to substantially all medical/surgical benefits in 
each classification,

[[Page 51666]]

including an explanation of how the plan or issuer determined which 
variation is the predominant nonquantitative treatment limitation as 
compared to other variations, as well as how the plan identified the 
variations of the nonquantitative treatment limitation.
    (2) Identification and definition of the factors used to design or 
apply the nonquantitative treatment limitation. The comparative 
analysis must include, with respect to every factor considered or 
relied upon to design the nonquantitative treatment limitation or apply 
the nonquantitative treatment limitation to mental health or substance 
use disorder benefits and medical/surgical benefits:
    (i) Identification of all of the factors considered, as well as the 
evidentiary standards considered or relied upon to design or apply each 
factor and the sources from which each evidentiary standard was 
derived, in determining which mental health or substance use disorder 
benefits and which medical/surgical benefits are subject to the 
nonquantitative treatment limitation; and
    (ii) A definition of each factor, including:
    (A) A detailed description of the factor; and
    (B) A description of each evidentiary standard (and the source of 
each evidentiary standard) identified under paragraph (c)(2)(i) of this 
section.
    (3) Description of how factors are used in the design and 
application of the nonquantitative treatment limitation. The 
comparative analysis must include a description of how each factor 
identified and defined pursuant to paragraph (c)(2) of this section is 
used in the design or application of the nonquantitative treatment 
limitation to mental health and substance use disorder benefits and 
medical/surgical benefits in a classification, including:
    (i) A detailed explanation of how each factor identified and 
defined in paragraph (c)(2) of this section is used to determine which 
mental health or substance use disorder benefits and which medical/
surgical benefits are subject to the nonquantitative treatment 
limitation;
    (ii) An explanation of the evidentiary standards or other 
information or sources (if any) considered or relied upon in designing 
or applying the factors or relied upon in designing and applying the 
nonquantitative treatment limitation, including in the determination of 
whether and how mental health or substance use disorder benefits or 
medical/surgical benefits are subject to the nonquantitative treatment 
limitation;
    (iii) If the application of the factor depends on specific 
decisions made in the administration of benefits, the nature of the 
decisions, the timing of the decisions, and the professional 
designation and qualifications of each decision maker;
    (iv) If more than one factor is identified and defined in paragraph 
(c)(2) of this section, an explanation of:
    (A) How all of the factors relate to each other;
    (B) The order in which all the factors are applied, including when 
they are applied;
    (C) Whether and how any factors are given more weight than others; 
and
    (D) The reasons for the ordering or weighting of the factors; and
    (v) Any deviation(s) or variation(s) from a factor, its 
applicability, or its definition (including the evidentiary standards 
used to define the factor and the information or sources from which 
each evidentiary standard was derived), such as how the factor is used 
differently to apply the nonquantitative treatment limitation to mental 
health or substance use disorder benefits as compared to medical/
surgical benefits, and a description of how the plan or issuer 
establishes such deviation(s) or variation(s).
    (4) Demonstration of comparability and stringency as written. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan (or health insurance coverage) as written, 
any processes, strategies, evidentiary standards, or other factors used 
in designing and applying the nonquantitative treatment limitation to 
mental health or substance use disorder benefits are comparable to, and 
are applied no more stringently than, the processes, strategies, 
evidentiary standards, or other factors used in designing and applying 
the nonquantitative treatment limitation with respect to medical/
surgical benefits. The comparative analysis must include, with respect 
to the nonquantitative treatment limitation and the factors used in 
designing and applying the nonquantitative treatment limitation:
    (i) Documentation of each factor identified and defined in 
paragraph (c)(2) of this section that was applied to determine whether 
the nonquantitative treatment limitation applies to mental health or 
substance use disorder benefits and medical/surgical benefits in a 
classification, including, as relevant:
    (A) Quantitative data, calculations, or other analyses showing 
whether, in each classification in which the nonquantitative treatment 
limitation applies, mental health or substance use disorder benefits 
and medical/surgical benefits met or did not meet any applicable 
threshold identified in the relevant evidentiary standard, and the 
evaluation of relevant data as required under Sec.  
146.136(c)(4)(iv)(A), to determine that the nonquantitative treatment 
limitation would or would not apply; and
    (B) Records maintained by the plan or issuer documenting the 
consideration and application of all factors and evidentiary standards, 
as well as the results of their application;
    (ii) In each classification in which the nonquantitative treatment 
limitation applies to mental health or substance use disorder benefits, 
a comparison of how the nonquantitative treatment limitation, as 
written, is applied to mental health or substance use disorder benefits 
and to medical/surgical benefits, including the specific provisions of 
any forms, checklists, procedure manuals, or other documentation used 
in designing and applying the nonquantitative treatment limitation or 
that address the application of the nonquantitative treatment 
limitation;
    (iii) Documentation demonstrating how the factors are comparably 
applied, as written, to mental health or substance use disorder 
benefits and medical/surgical benefits in each classification, to 
determine which benefits are subject to the nonquantitative treatment 
limitation; and
    (iv) An explanation of the reason(s) for any deviation(s) or 
variation(s) in the application of a factor used to apply the 
nonquantitative treatment limitation, or the application of the 
nonquantitative treatment limitation, to mental health or substance use 
disorder benefits as compared to medical/surgical benefits, and how the 
plan or issuer establishes such deviation(s) or variation(s), 
including:
    (A) In the definition of the factors, the evidentiary standards 
used to define the factors, and the sources from which the evidentiary 
standards were derived;
    (B) In the design of the factors or evidentiary standards; or
    (C) In the application or design of the nonquantitative treatment 
limitation.
    (5) Demonstration of comparability and stringency in operation. The 
comparative analysis must evaluate whether, in any classification, 
under the terms of the plan (or health insurance coverage) in 
operation, the processes, strategies, evidentiary standards, or other 
factors used in designing and applying the nonquantitative treatment 
limitation to mental health or substance

[[Page 51667]]

use disorder benefits are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, or 
other factors used in designing and applying the limitation with 
respect to medical/surgical benefits. The comparative analysis must 
include, with respect to the nonquantitative treatment limitation and 
the factors used in designing and applying the nonquantitative 
treatment limitation:
    (i) A comprehensive explanation of how the plan or issuer ensures 
that, in operation, the processes, strategies, evidentiary standards, 
or other factors used in designing and applying the nonquantitative 
treatment limitation to mental health or substance use disorder 
benefits in a classification are comparable to, and are applied no more 
stringently than, the processes, strategies, evidentiary standards, or 
other factors used in designing and applying the nonquantitative 
treatment limitation with respect to medical/surgical benefits, 
including:
    (A) An explanation of any methodology and underlying data used to 
demonstrate the application of the nonquantitative treatment 
limitation, in operation; and
    (B) The sample period, inputs used in any calculations, definitions 
of terms used, and any criteria used to select the mental health or 
substance use disorder benefits and medical/surgical benefits to which 
the nonquantitative treatment limitation is applicable;
    (ii) Identification of the relevant data collected and evaluated as 
required under Sec.  146.136(c)(4)(iv)(A);
    (iii) An evaluation of the outcomes that resulted from the 
application of the nonquantitative treatment limitation to mental 
health or substance use disorder benefits and medical/surgical 
benefits, including the relevant data as required under Sec.  
146.136(c)(4)(iv)(A);
    (iv) A detailed explanation of material differences in outcomes 
evaluated pursuant to paragraph (c)(5)(iii) of this section that are 
not attributable to differences in the comparability or relative 
stringency of the nonquantitative treatment limitation as applied to 
mental health or substance use disorder benefits and medical/surgical 
benefits and the bases for concluding that material differences in 
outcomes are not attributable to differences in the comparability or 
relative stringency of the nonquantitative treatment limitation; and
    (v) A discussion of any measures that have been or are being 
implemented by the plan or issuer to mitigate any material differences 
in access to mental health or substance use disorder benefits as 
compared to medical/surgical benefits, including the actions the plan 
or issuer is taking under Sec.  146.136(c)(4)(iv)(B)(1) to address 
material differences to ensure compliance with Sec.  146.136(c)(4)(i) 
and (ii).
    (6) Findings and conclusions. The comparative analysis must address 
the findings and conclusions as to the comparability of the processes, 
strategies, evidentiary standards, and other factors used in designing 
and applying the nonquantitative treatment limitation to mental health 
or substance use disorder benefits and medical/surgical benefits within 
each classification, and the relative stringency of their application, 
both as written and in operation, and include:
    (i) Any findings or conclusions indicating that the plan or 
coverage is not (or might not be) in compliance with the requirements 
of Sec.  146.136(c)(4), including any actions the plan or issuer has 
taken or intends to take to address any potential areas of concern or 
noncompliance;
    (ii) A reasoned and detailed discussion of the findings and 
conclusions described in paragraph (c)(6)(i) of this section;
    (iii) Citations to any additional specific information not 
otherwise included in the comparative analysis that supports the 
findings and conclusions described in paragraph (c)(6)(i) of this 
section;
    (iv) The date of the analysis and the title and credentials of all 
relevant persons who participated in the performance and documentation 
of the comparative analysis; and
    (v) If the comparative analysis relies upon an evaluation by a 
reviewer or consultant considered by the plan or issuer to be an 
expert, an assessment of each expert's qualifications and the extent to 
which the plan or issuer ultimately relied upon each expert's 
evaluation in performing and documenting the comparative analysis of 
the design and application of each nonquantitative treatment limitation 
applicable to both mental health or substance use disorder benefits and 
medical/surgical benefits.
    (d) Requirements related to submission of comparative analyses to 
the Secretary upon request--(1) Initial request by the Secretary for 
comparative analysis. A group health plan or health insurance issuer 
offering group health insurance coverage must make the comparative 
analysis required by paragraph (b) of this section available and submit 
it to the Secretary within 10 business days of receipt of a request 
from the Secretary (or an additional period of time specified by the 
Secretary).
    (2) Additional information required after a comparative analysis is 
deemed to be insufficient. In instances in which the Secretary 
determines that the plan or issuer has not submitted sufficient 
information under paragraph (d)(1) of this section for the Secretary to 
review the comparative analysis required in paragraph (b) of this 
section, the Secretary will specify to the plan or issuer the 
additional information the plan or issuer must submit to the Secretary 
to be responsive to the request under paragraph (d)(1) of this section. 
Any such information must be provided to the Secretary by the plan or 
issuer within 10 business days after the Secretary specifies the 
additional information to be submitted (or an additional period of time 
specified by the Secretary).
    (3) Initial determination of noncompliance, required action, and 
corrective action plan. In instances in which the Secretary reviewed 
the comparative analysis submitted under paragraph (d)(1) of this 
section and any additional information submitted under paragraph (d)(2) 
of this section, and made an initial determination that the plan or 
issuer is not in compliance with the requirements of Sec.  
146.136(c)(4) or this section, the plan or issuer must respond to the 
Secretary and specify the actions the plan or issuer will take to bring 
the plan or coverage into compliance, and provide to the Secretary 
additional comparative analyses meeting the requirements of paragraph 
(b) of this section that demonstrate compliance with Sec.  
146.136(c)(4) and this section, not later than 45 calendar days after 
the Secretary's initial determination that the plan or issuer is not in 
compliance.
    (4) Requirement to notify participants and beneficiaries of final 
determination of noncompliance--(i) In general. If the Secretary makes 
a final determination of noncompliance, the plan or issuer must notify 
all participants and beneficiaries enrolled in the plan or coverage 
that the plan or issuer has been determined to not be in compliance 
with the requirements of Sec.  146.136(c)(4) or this section with 
respect to such plan or coverage. Such notice must be provided within 7 
calendar days of receipt of the final determination of noncompliance, 
and the plan or issuer must provide a copy of the notice to the 
Secretary, and any service provider involved in the claims process.
    (ii) Content of notice. The notice to participants and 
beneficiaries required in paragraph (d)(4)(i) of this section

[[Page 51668]]

shall be written in a manner calculated to be understood by the average 
plan participant and must include, in plain language, the following 
information in a standalone notice:
    (A) The following statement prominently displayed on the first 
page, in no less than 14-point font: ``Attention! The Department of 
Health and Human Services has determined that [insert the name of group 
health plan or health insurance issuer] is not in compliance with the 
Mental Health Parity and Addiction Equity Act.'';
    (B) A summary of changes the plan or issuer has made as part of its 
corrective action plan specified to the Secretary following the initial 
determination of noncompliance, including an explanation of any 
opportunity for a participant or beneficiary to have a claim for 
benefits reprocessed;
    (C) A summary of the Secretary's final determination that the plan 
or issuer is not in compliance with Sec.  146.136(c)(4) or this 
section, including any provisions or practices identified as being in 
violation of MHPAEA, additional corrective actions identified by the 
Secretary in the final determination notice, and information on how 
participants and beneficiaries can obtain from the plan or issuer a 
copy of the final determination of noncompliance;
    (D) Any additional actions the plan or issuer is taking to come 
into compliance with Sec.  146.136(c)(4) or this section, when the plan 
or issuer will take such actions, and a clear and accurate statement 
explaining whether the Secretary has indicated that those actions, if 
completed, will result in compliance; and
    (E) Contact information for questions and complaints, and a 
statement explaining how participants and beneficiaries can obtain more 
information about the notice, including:
    (1) The plan's or issuer's phone number and an email or web portal 
address; and
    (2) The Center for Medicare and Medicaid Services' phone number and 
email or web portal address.
    (iii) Manner of notice. The plan or issuer must make the notice 
required under paragraph (d)(4)(i) of this section available in paper 
form, or electronically (such as by email or an internet posting) if:
    (A) The format is readily accessible;
    (B) The notice is provided in paper form free of charge upon 
request; and
    (C) In a case in which the electronic form is an internet posting, 
the plan or issuer timely notifies the participant or beneficiary in 
paper form (such as a postcard) or email, that the documents are 
available on the internet, provides the internet address, includes the 
statement required in paragraph (d)(4)(ii)(A) of this section, and 
notifies the participant or beneficiary that the documents are 
available in paper form upon request.
    (e) Requests for a copy of a comparative analysis. In addition to 
making a comparative analysis available upon request to the Secretary, 
a plan or issuer must make available a copy of the comparative analysis 
required by paragraph (b) of this section when requested by:
    (1) Any applicable State authority; and
    (2) A participant or beneficiary (or a provider or other person 
acting as a participant's or beneficiary's authorized representative) 
who has received an adverse benefit determination related to mental 
health or substance use disorder benefits.
    (f) Rule of construction. Nothing in this section or Sec.  146.136 
shall be construed to prevent the Secretary from acting within the 
scope of existing authorities to address violations of Sec.  146.136 or 
this section.
    (g) Applicability. The provisions of this section apply to group 
health plans and health insurance issuers offering group health 
insurance coverage described in Sec.  146.136(e), to the extent the 
plan or issuer is not exempt under Sec.  146.136(f) or (g), for plan 
years beginning on or after January 1, 2025.
    (h) Severability. If any provision of this section is held to be 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, or stayed pending further agency action, the provision 
shall be construed so as to continue to give the maximum effect to the 
provision permitted by law, unless such holding shall be one of 
invalidity or unenforceability, in which event the provision shall be 
severable from this section and shall not affect the remainder thereof 
or the application of the provision to persons not similarly situated 
or to dissimilar circumstances.
0
9. Amend Sec.  146.180 by:
0
a. Revising paragraph (a)(2);
0
b. Redesignating paragraphs (a)(3) through (7) as paragraphs (a)(4) 
through (8);
0
c. Adding new paragraph (a)(3);
0
d. Revising newly redesignated paragraphs (a)(5) and (a)(7)(i) and 
paragraph (f)(1); and
0
e. Adding paragraph (f)(4)(iii).
    The revisions and additions read as follows:


Sec.  146.180  Treatment of non-Federal governmental plans.

    (a) * * *
    (2) General rule. For plans years beginning on or after September 
23, 2010, a sponsor of a non-Federal governmental plan may elect to 
exempt its plan, to the extent the plan is not provided through health 
insurance coverage (that is self-funded), from one or more of the 
requirements described in paragraphs (a)(1)(iv) through (vii) of this 
section, except as provided in paragraphs (a)(3) and (f)(1) of this 
section with respect to the requirements described in paragraph 
(a)(1)(v) of this section.
    (3) Sunset of election option related to parity in mental health 
and substance use disorder benefits. A sponsor of a non-Federal 
governmental plan may not newly elect to exempt its plan(s) from the 
requirements described in paragraph (a)(1)(v) of this section on or 
after December 29, 2022.
* * * * *
    (5) Examples--(i) Example 1. A non-Federal governmental employer 
has elected to exempt its self-funded group health plan from all of the 
requirements described in paragraph (a)(1) of this section. The plan 
year commences September 1 of each year. The plan is not subject to the 
provisions of paragraph (a)(2) of this section until the plan year that 
commences on September 1, 2011. Accordingly, for that plan year and any 
subsequent plan years, the plan sponsor may elect to exempt its plan 
only from the requirements described in paragraphs (a)(1)(iv) through 
(vii) of this section, subject to paragraphs (a)(3) and (f)(1) of this 
section with respect to the requirements described in paragraph 
(a)(1)(v) of this section.
    (ii) Example 2. A non-Federal governmental employer has elected to 
exempt its collectively bargained self-funded plan from all of the 
requirements described in paragraph (a)(1) of this section. The 
collective bargaining agreement applies to 5 plan years, October 1, 
2009 through September 30, 2014. For the plan year that begins on 
October 1, 2014, the plan sponsor is no longer permitted to elect to 
exempt its plan from the requirements described in paragraphs (a)(1)(i) 
through (iii) of this section. Accordingly, for that plan year and any 
subsequent plan years, the plan sponsor may elect to exempt its plan 
only from the requirements described in paragraphs (a)(1)(iv) through 
(vii) of this section, subject to paragraphs (a)(3) and (f)(1) of this 
section with respect to the requirements described in paragraph 
(a)(1)(v) of this section.
* * * * *
    (7) * * *
    (i) Subject to paragraph (a)(7)(ii) of this section, the purchase 
of stop-loss or excess risk coverage by a self-funded

[[Page 51669]]

non-Federal governmental plan does not prevent an election under this 
section.
* * * * *
    (f) * * *
    (1) Election renewal. A plan sponsor may renew an election under 
this section through subsequent elections. Notwithstanding the previous 
sentence and except as provided in paragraph (f)(4)(iii) of this 
section, an election with respect to the requirements described in 
paragraph (a)(1)(v) of this section expiring on or after June 27, 2023, 
may not be renewed. The timeliness standards described in paragraph (c) 
of this section apply to election renewals under paragraph (f) of this 
section.
* * * * *
    (4) * * *
    (iii) In the case of a plan that is subject to multiple collective 
bargaining agreements of varying lengths and that has an election with 
respect to the requirements described in paragraph (a)(1)(v) of this 
section in effect as of December 29, 2022, that expires on or after 
June 27, 2023, the plan may extend such election until the date on 
which the term of the last such agreement expires.
* * * * *

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
10. The authority citation for part 147 continues to read as follows:

    Authority:  42 U.S.C. 300gg through 300gg-63, 300gg-91, 300gg-
92, and 300gg-111 through 300gg-139, as amended, and section 3203, 
Pub. L. 116-136, 134 Stat. 281.

0
11. Revise Sec.  147.160 to read as follows:


Sec.  147.160  Parity in mental health and substance use disorder 
benefits.

    (a) In general. The provisions of Sec. Sec.  146.136 and 146.137 of 
this subchapter apply to individual health insurance coverage offered 
by a health insurance issuer in the same manner and to the same extent 
as such provisions apply to health insurance coverage offered by a 
health insurance issuer in connection with a group health plan in the 
large group market.
    (b) Applicability date. The provisions of this section apply for 
policy years beginning on or after January 1, 2026. Until the 
applicability date in the preceding sentence, issuers are required to 
continue to comply with 45 CFR 147.160, revised as of October 1, 2021. 
This section applies to non-grandfathered and grandfathered health 
plans as defined in Sec.  147.140.

[FR Doc. 2023-15945 Filed 7-31-23; 8:45 am]
BILLING CODE 4510-29-P